Though it is assumed that people act rationally, in some markets, we have seen volatile prices exacerbated by irrational exuberance. Consumers have been caught up in a market frenzy. Hoping that rising prices will make them richer – and expecting prices to keep rising. Developments in the economy, which has resulted in the emergence of a middle income class, taste of luxury goods, influx of foreign investors and a maturing property market has opened the window for investment opportunities in retail developments, thus leading to rise of shopping malls in the country. This some also argue that it affects the local traditional markets in the country. How relevant is this normative narrative?
Though it is assumed that people act rationally, in some markets, we have seen volatile prices exacerbated by irrational exuberance. Consumers have been caught up in a market frenzy. Hoping that rising prices will make them richer – and expecting prices to keep rising. Developments in the economy, which has resulted in the emergence of a middle income class, taste of luxury goods, influx of foreign investors and a maturing property market has opened the window for investment opportunities in retail developments, thus leading to rise of shopping malls in the country. This some also argue that it affects the local traditional markets in the country. How relevant is this normative narrative?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Though it is assumed that people act rationally, in some markets, we have
seen volatile prices exacerbated by irrational exuberance. Consumers have
been caught up in a market frenzy. Hoping that rising prices will make them
richer – and expecting prices to keep rising. Developments in the economy,
which has resulted in the emergence of a middle income class, taste of luxury goods, influx of foreign investors and a maturing property market has opened the window for investment opportunities in retail developments, thus leading to rise of shopping malls in the country. This some also argue that it affects the local traditional markets in the country. How relevant is this normative narrative?
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