From 1997 to 2003, stock prices based on the Standard and Poor's index and the share of investment spending as a component of GDP tended to
A) move in opposite directions.
B) move in the same direction.
C) both remain relatively unchanged.
D) be unrelated to each other.

Question

Quizplus · Accepted Answer

During the period from 1997 to 2003, the stock market, as measured by the Standard and Poor's index, generally experienced growth, especially during the late 1990s. This period is often associated with the dot-com bubble. As stock prices increased, investor confidence typically rose, leading to more investment spending. Investment spending as a component of GDP tends to increase when the stock market is performing well because businesses and investors are more likely to spend on new projects and expansions when they feel confident about the economic outlook. Therefore, stock prices and the share of investment spending as a component of GDP moved in the same direction during this time.

From 1997 to 2003, Stock Prices Based on the Standard