What Is the Likely Chain of Events If Asset Prices

question 279

Multiple Choice

What is the likely chain of events if asset prices rise?

• A) People feel poorer, so their spending falls and their saving rises, causing interest rates to fall.
• B) People feel wealthier, so their spending falls and their saving rises, causing interest rates to fall.
• C) People feel wealthier, so their spending rises and their saving rises, causing interest rates to fall.
• D) People feel wealthier, so their spending rises and their saving falls, causing interest rates to rise.

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