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From course:

Economics A Level (DONEEEEEEE)

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Question:

What are Market Bubbles?

Author: eric_galvao



Answer:

-When the level of Speculation is High, then: -Investors will keep Expecting the Price to rise to Unrealistic Realms - like Internet Stocks in the Late 1990s -When the Confidence goes down, even by a bit, the Bubble can 'pop' and make the Prices of these Assets crash down. This can be a cause of a Financial Crisis.


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