How Does a Stock Market Boom Affect Household Spending, and How

Multiple Choice

How does a stock market boom affect household spending, and how would the Bank of Canada offset the effects on the price level and real GDP?

A) household spending increases; the Bank of Canada would increase the money supply
B) household spending increases; the Bank of Canada would decrease the money supply
C) household spending decreases; the Bank of Canada would increase the money supply
D) household spending decreases; the Bank of Canada would decrease the money supply