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) nothing about the business cycle because stock prices can fall for many reasons
D) that the economy is about to enter a recession because low stock prices mean that corporations have had low profits in the past