The financial instability hypothesis attempts to explain
A)The long-term decline of the U.S. economy that became apparent in the 1990s.
B)how the mixture of hedge, speculative, and Ponzi spending units determines the overall health of the economy.
C)why there is a natural tendency for the economy not to experience long term boom-crisis cycles.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

The financial instability hypothesis explains how the combination of different spending units - hedge, speculative, and Ponzi - affects the overall stability of the economy. It does not explain the long-term decline of the U.S. economy or suggest that there is a natural tendency for the economy to avoid boom-crisis cycles.

The Financial Instability Hypothesis Attempts to Explain