While theories on PPP, interest rates, and money supply give often-accurate predictions about long-term movements, investor psychology is regarded as the determinant behind short-term movements.

Question

Quizplus · Accepted Answer

While economic theories provide insight into long-term movements, short-term movements are often influenced by investor psychology and sentiment. This statement is generally accepted in the field of finance and economics. While economic theories can provide insight into long-term trends, short-term fluctuations are often driven by the emotions and behavior of investors.

While Theories on PPP, Interest Rates, and Money Supply Give