Economic Bubbles Quiz

What is Tulip Mania?

• A famous painting by Vincent van Gogh

• A type of flower

• A historical economic event in the Netherlands

• A popular tourist attraction in Amsterdam

What is the first stage of an economic bubble according to economists?

• Displacement

• Euphoria

• Price boom

• Profit-taking

What caused the surge in tulip prices in the Netherlands in the 1600s?

• Booming international trade

• Discovery of new tulip species

• Increased demand for tulip seeds

• Government intervention

What is the second stage of an economic bubble?

• Euphoria

• Displacement

• Price boom

• Profit-taking

What is the main factor that causes prices to go up during a price boom?

• Limited supply and high demand

• Increased supply

• Decreased demand

• Government subsidies

What did Dutch buyers do to bet on the future price of tulip bulbs?

• Invest in gold

• Purchase government bonds

• Buy tulip futures contracts

• Invest in real estate

What is the third stage of an economic bubble?

• Displacement

• Profit-taking

• Panic

• Euphoria

What is the profit-taking phase in an economic bubble?

• When prices start to plummet

• When investors start selling and cashing out

• When investors realize the actual value of a product isn't in line with what they paid

• When investors start buying more assets

What caused the burst of the housing bubble in 2008?

• Surge in international trade

• Subprime mortgage crisis

• Increased government subsidies

• Investor panic

What is the final stage of an economic bubble?

• Displacement

• Profit-taking

• Panic

• Euphoria