A stock market boom which causes stock prices to rise should cause
A)a decrease in consumption spending.
B)an increase in consumption spending.
C)a decrease in wealth.
D)a decrease in net export spending.
E)an increase in government spending.

Question

Quizplus · Accepted Answer

When stock prices rise, people tend to feel wealthier due to the increased value of their investments. As a result, they may be more likely to increase their consumption spending, believing that they have more money available to spend.

A Stock Market Boom Which Causes Stock Prices to Rise