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A Financial Bubble Starts to Inflate When

Question 11

Multiple Choice

A financial bubble starts to inflate when:


A) investors become irrationally optimistic that an asset's price will continue to rise.
B) investors become irrationally pessimistic that an asset needs to be sold immediately.
C) a good experiences a rise in demand that is unexplained,increasing its price.
D) inflation begins to accelerate,and monetary and fiscal policy are ineffective at slowing its growth.

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