A Stock Market Boom Which Causes Stock Prices to Rise

question 32

Multiple Choice

A stock market boom which causes stock prices to rise should cause

• A)a decrease in consumption spending.
• B)an increase in consumption spending.
• C)a decrease in wealth.
• D)a decrease in net export spending.
• E)an increase in government spending.

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Definitions:

Present Discounted Value

The present worth of a future amount of money or series of cash inflows, discounted at a given rate of return.

Interest Rate

The cost of borrowing money or the payment made for the use of money, typically expressed as a percentage of the principal amount annually.

Interest Rate

The percentage at which interest is paid by a borrower for the use of money they borrow from a lender.

Indifferent

A state of having no preference or being neutral between two or more options as they provide the same level of utility or satisfaction.