Question

Why do you suppose that some economists have suggested that "irrational exuberance"-unjustified optimism about future economic performance can contribute to business expansions?

Short answer

Any unjustified positive thinking about a future financial execution can cause money managers to go with hopeful choices prompting development in business exercises.

Step-by-step solution

Introduction

The inborn inclination that people and money managers have about future financial occasions the term animal spirit was introduced.

Explanation

• Through this hypothesis that very much like creatures become ready on the expectation of a strange yet innocuous commotion, outlandish stresses over future occasions can cause money managers to pursue cynical choices prompting a decline in the business action.
• It is due to this reason that some economists have suggested that "irrational exuberance"-unjustified optimism about future economic performance can contribute to business expansions.