When they guess correctly about price movements, speculators:
A) move goods from periods of low-use value to periods of high-use value, making society better off.
B) cause a misallocation of resources by taking resources away from consumers who value them the most.
C) profit at the expense of society, making everyone worse off.
D) cause high price volatility.

Question

Quizplus · Accepted Answer

When speculators guess correctly about price movements, they are able to move goods from periods of low-use value to periods of high-use value, which can make society better off. For example, if a speculator buys up a commodity during a period of low demand and then sells it during a period of high demand, they are able to provide the commodity to those who need it most, while also making a profit for themselves. This helps to ensure that resources are allocated efficiently and that goods are available when they are needed most.

When They Guess Correctly About Price Movements, Speculators