The Stock Market Just Crashed; the Dow Jones Industrial Average

question 27

Multiple Choice

The stock market just crashed; the Dow Jones Industrial Average fell by 750 points.You would expect the effect on aggregate consumption to be the largest if which of the following facts was true?

• A)The crash had been preceded by a large run-up in the price of stocks.
• B)Most stocks were owned by insurance companies.
• C)Most stocks were owned by pension funds that invested in the market.
• D)Many individuals had invested in the stock market immediately prior to the crash.

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