A boom in the stock market affects the economy because
A) wealth of households grow as the stock market booms.
B) brokers make a lot of money.
C) the Fed feels it can increase the money supply without worry.
D) the stock market boom takes pressure off social security.

Question

Quizplus · Accepted Answer

A stock market boom increases the value of financial assets, which typically make up a significant portion of households' wealth. As a result, household wealth grows and they may feel more confident in their financial situation, leading to increased spending and economic growth.

A Boom in the Stock Market Affects the Economy Because