At the Initial Stage of an Economic Recovery

question 37

Multiple Choice

At the initial stage of an economic recovery,

• A) Financial stocks rise on expectations of increases in loan demand, housing constructions and security offerings.
• B) Consumer durable stocks rise on expectations of rising consumer confidence and personal income.
• C) Capital goods stocks rise on expectation of increases in business capital spending.
• D) Basic materials stocks rise on expectation of rising profit margins.
• E) Consumer staple stocks rise on expectations that consumers will continue to spend on necessities.

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Definitions:

Personal Use

Refers to the use of property or services primarily for individual or household purposes, not for business or income-producing activities.

Schedule E

A tax form used by landlords, S-corporation, partnerships, and other entities to report income and expenses from rental real estate, royalties, partnerships, S corporations, trusts, and residual interests in REMICs.

Rental Income

Income received from renting out property, such as buildings or land, which is usually subject to income tax.

Primarily Personal

Indicates the use of property or resource predominantly for the owner's personal purposes and enjoyment rather than for business or rental.