Question

what conditions can an economic bubble arise?

What do you think is happening in the world economy today?

How can you avoid being dragged into an economic bubble with a new business venture

Answer 1

Economic bubble arises when, too much money chases too few goods(assets) and the price of assets goes far beyond their value and gets excessively high. This sunrises mainly in the condition of hyperinflation when the value of money devalues badly.

The demand of consumers are rising day by day, and resources are few, hence the supply isn't sufficient to satisfy all. Hence, inflation arises leading to formation of the economic bubble.

Economic bubble could be avoided by diversifying ventures in order to avoided being trapped in a bubble wholly, without any escape