What Is an Informational Cascade

question 157

Multiple Choice

What is an informational cascade?

• A) An excess flow of market information that makes it difficult for an investor to form a rational decision.
• B) A continual decline in the quality of market information from public sources due to sequential budget cuts.
• C) A continual increase in the quality of market information from public sources due to broader use of the internet by market participants.
• D) A sequence of decisions based on the actions of others rather than fundamental information.

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Definitions:

Bottom 90 Percent

Refers to the vast majority of a population that is not within the top 10% in terms of wealth or income, often emphasizing disparities in wealth distribution.

Middle Class

Social class composed primarily of white collar workers with a broad range of education and incomes; they constitute about 30 percent of the U.S. population.

Blue-Collar Workers

Employees who perform manual labor, often in industries involving physical work such as manufacturing, construction, and maintenance.

Meritocracy

A societal system where advancement in society is based on an individual's capabilities and merit rather than on family, wealth, or social class.