Which One of the Following Is Likely to Have a Negative

question 22

Multiple Choice

Which one of the following is likely to have a negative effect on stock prices?

• A) falling interest rates
• B) a decrease in the money supply (M2)
• C) low inflation
• D) a decrease in the unemployment rate

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Definitions:

Monetary Policy

The actions undertaken by a central bank, such as the Federal Reserve, to control the supply of money and interest rates in order to achieve macroeconomic goals.

1990's

A decade characterized by major global events, technological advancements, and cultural shifts, lasting from 1990 to 1999.

High Saving Rate

A high saving rate indicates a significant portion of an economy's income is not spent on current consumption but saved for future use, potentially impacting economic growth and investment.

Aggregate Demand

Sum total of the requirement for goods and services across an economy, based on a particular price level over a defined period.