If economic conditions deteriorate, stock prices are likely to
A) increase.
B) decrease.
C) stay the same.
D) not be directly affected by changes in economic conditions.

Question

Quizplus · Accepted Answer

When economic conditions deteriorate, it generally leads to a decrease in corporate profits and consumer spending, which negatively affects stock prices. Investors often react to poor economic indicators by selling off stocks, leading to a decrease in stock prices.

If Economic Conditions Deteriorate, Stock Prices Are Likely to