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If Speculators Expect the Future Price of a Commodity to Rise

Question 149

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If speculators expect the future price of a commodity to rise, they may decide to use the ―buy low, sell high‖ strategy where they buy the commodity at a low price today in order that they may sell it later when prices rise. How might their actions actually cause a self-fulfilling prophecy in the short run? Use a demand and supply graph in your answer.

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