If the Fed is worried about inflation, you would expect stock prices to , and if it is worried about falling earnings, you might expect stock prices to .
A)rise; rise
B)fall; rise
C)rise; fall
D)stay the same; rise

Question

Quizplus · Accepted Answer

If the Fed is worried about inflation, it might raise interest rates, which typically leads to a decrease in stock prices. Conversely, if it is worried about falling earnings, it might lower interest rates or take measures to stimulate the economy, potentially leading to an increase in stock prices.

If the Fed Is Worried About Inflation, You Would Expect