Speculators' Impact on Market Efficiency

Answered using GPT-4o mini by AI Answer Generator

Question:

When speculators are right, they make society better off.

False

True

Answer:

True

When speculators are right, they can contribute to market efficiency by providing liquidity, helping to price assets accurately, and facilitating risk management. This can lead to better allocation of resources and overall improvements in economic welfare. However, it's important to note that speculation can also have negative effects if it leads to excessive volatility or market bubbles.