An asset-price bubble entails ________.

Question

Quizplus · Accepted Answer

An asset-price bubble is characterized by an increase in the prices of assets that exceeds their fundamental economic value. This can lead to a situation where prices become unsustainable and eventually crash, leading to significant economic losses. A is incorrect as asset prices may rise due to factors other than liability losses. C is incorrect as the number of participants in a market may not necessarily be related to the existence of a bubble. D is incorrect as an economic skins game is not directly related to the concept of an asset-price bubble.

An Asset-Price Bubble Entails ________