Traders at a Stock Exchange Notice That Five Traders on the Floor

Multiple Choice

Traders at a stock exchange notice that five traders on the floor seem to be selling more yen and purchasing more euros because of an expected decline in the yen. As a result, all other traders started to do the same. This is an example of the ________ that creates a self-fulfilling prophecy when the yen does decline in value.

A) spot exchange rate
B) arbitration process
C) bandwagon effect
D) difference principle
E) tragedy of the commons