Multiple Choice
Suppose households unexpectedly increase consumption. Which of the following will occur as a result of this consumer optimism?
A) An ambiguous effect on stock prices.
B) An increase in stock prices.
C) A decrease in stock prices.
D) Stock prices increase only if goods prices increase.
E) No change in stock prices.
Correct Answer:

Verified
Correct Answer:
Verified
Q46: Explain what the term structure of interest
Q48: A share of stock will pay a
Q49: Assume that the RBA is expected to
Q50: Why do investors demand an equity premium
Q52: Suppose that financial market participants now expect
Q55: Suppose the RBA implements monetary contraction that
Q56: Assume that the current one- year rate
Q57: Suppose the central bank implements monetary expansion
Q58: Assume that the RBA is expected to
Q69: Suppose a cut in government spending occurs