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Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383

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BuyFindarrow_forward

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383
Textbook Problem

Speculation (on prices) leads to gains for the speculator and losses for others. Do you agree or disagree? Explain your answer.

To determine

The impact of speculation on the speculators and others.

Explanation

Yes, the speculators’ act violating the general consumer behavior. When the speculators expect an increase in the price of a commodity, they would increase the current consumption to gain a future profit by reselling the products at a higher future price. However, when the speculators buy the commodity in large quantities, it would lead to a shortage for the commodity in the current period...

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