The bandwagon effect causes investment to be:
A) evenly distributed over time.
B) unevenly distributed over time.
C) more responsive to monetary policy changes during recessions.
D) more responsive to monetary policy changes during expansions.

Question

Quizplus · Accepted Answer

The bandwagon effect, also known as the herding effect, causes investors to follow the actions of others instead of making their own independent decisions. This can result in unevenly distributed investment over time as investors all jump onto the same investment bandwagon at once.

The Bandwagon Effect Causes Investment to Be