A financial bubble inflates when:
A) investors become irrationally optimistic that an asset's price will continue to rise.
B) investors become irrationally pessimistic and desire to sell off an asset immediately.
C) investors apply the efficient market hypothesis to a financial product for the first time.
D) inflation begins to accelerate, and monetary and fiscal policy are ineffective at slowing its growth.
Correct Answer:
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A)
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