Which of the following statements is true?
A)Credit-driven asset bubbles are particularly dangerous. When asset prices fall, the deleveraging of credit markets reduces economic activity.
B)Bubbles driven solely by irrational exuberance lead to a failure of financial institutions.
C)Both A and B are correct.
D)Neither A nor B is correct.

Question

Quizplus · Accepted Answer

Credit-driven asset bubbles are particularly dangerous because when asset prices fall, the deleveraging of credit markets reduces economic activity.

Which of the Following Statements Is True