Economics - Herd Behavior MCQ Test 5

1. How does fear of missing out (FOMO) contribute to herd behavior in economic decision-making?

2. How can policymakers address the negative impact of herd behavior in economic systems?

3. What is the primary psychological mechanism underlying herd behavior?

4. How can herd behavior impact investment decisions?

5. In the context of herd behavior, what term describes the situation where investors rush to exit a declining market simultaneously?

6. What distinguishes herd behavior from rational decision-making in financial markets?

7. Which statement best describes the implications of herd behavior?

8. How does herd behavior influence financial markets?

9. What factor can intensify the effects of herd behavior in financial markets?

10. Which economic theory emphasizes the role of herd behavior in asset price bubbles?