When Stock Prices Fall

question 41

Multiple Choice

When stock prices fall

• A)an individual's wealth is not affected nor is their willingness to spend.
• B)a business firm will be more likely to sell stock to finance investment spending.
• C)an individual's wealth may decrease but their willingness to spend is not affected.
• D)an individual's wealth may decrease and their willingness to spend may decrease.

---

Definitions:

Supply Curve

A graph that shows the relationship between the price of a good and the quantity supplied.

Price Ceiling

A government-imposed limit on the maximum price that can be charged for a product or service.

Government-Imposed

pertains to regulations, restrictions, or conditions set by public authorities that affect individuals, businesses, or activities within a jurisdiction.

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a given price in a given period.