If the stock market crashes, the so-called reverse wealth effect will cause consumer spending to
decrease.

Name: If the stock market crashes, the so-called reverse wealth effect will cause consumer spending to decrease.
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Question

Quizplus · Accepted Answer

When the stock market crashes, people feel less wealthy as the value of their investments decreases. As a result, they may be less likely to spend money, causing a decrease in consumer spending. This phenomenon is known as the reverse wealth effect.

If the Stock Market Crashes, the So-Called Reverse Wealth Effect