What Does a General, Persistent Decline in Stock Prices Signal

Multiple Choice

What does a general, persistent decline in stock prices signal about an economy?

A) that the economy is about to enter a boom period because people will be able to buy stock for less money
B) that the economy is about to enter a recession because low stock prices may mean that people are expecting low corporate profits
C) that the economy is about to enter a boom because people expect prices of stock to rise
D) that the economy is about to enter a recession because low stock prices mean that corporations have had low profits in the past