Which of the Following Is Evidence of Irrationality in Financial

question 47

Multiple Choice

Which of the following is evidence of irrationality in financial markets?

• A) random walk
• B) high volatility
• C) bubbles
• D) none of the above

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Definitions:

Tax Shifting

Occurs when households can alter their behavior and do something to avoid paying a tax.

Avoid Paying

Strategies or actions taken to minimize or evade expenses, taxes, or other financial obligations.

Luxury Tax

A tax imposed on expensive goods and services, often considered non-essential, as a means of raising government revenues without placing the burden on essential items.

Tax Incidence

The distribution of the economic burden of a tax between buyers and sellers, depending on the elasticity of demand and supply.