ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Market inefficiencies exist due to information asymmetries, transaction costs, market psychology, and human emotion, among other reasons. As a result, some assets may be over-or under-valued in the market, creating opportunities for excess profits.

Detailed explanation-2: -Monetarists associated inflation to the monetary causes and suggested monetary measures to control it. On the other hand, structuralists believed that the inflation occurs because of the unbalanced economic system and they used both monetary and fiscal measures together for sorting out economic problems.

Detailed explanation-3: -Examples of market inefficiencies in the past The dotcom bubble, also known as the dotcom boom as well as the Internet bubble, was basically a stock market bubble.

Detailed explanation-4: -In an efficient stocks market, the price of a share shows the true value of all publicly available information of such a company. Whereas, in an inefficient stocks market, there are no publicly available information (or a limited number), thus making it possible to bargain prices with the company.