In an Asset Bubble

question 45

Multiple Choice

In an asset bubble:

• A)depositors withdraw their deposits from banks until the bank fails.
• B)the price of an asset is pushed to an unreasonably high level because of expectations of further price gains.
• C)the price of an asset falls because demand for the asset is so high.
• D)savers and investors engage in maturity transformation by long-term borrowing and making short-term loans to take advantage of interest rate increases.

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Definitions:

Secondary Appraisal

The process of evaluating one's ability to cope or manage the consequences of a potentially stressful event after initially assessing its significance.

Lazarus

Refers to the psychologist Richard Lazarus, known for his theory on emotion and stress which emphasizes the importance of cognitive appraisal.

Social Health

An individual's capacity to form satisfying interpersonal relationships with others and to adapt comfortably to different social situations.

Fight-or-Flight

A physiological response to perceived danger or threat, preparing the body to fight or flee from the threatening situation.