Why are monetary authorities concerned about stock market booms?
A) because the booms decrease consumption spending
B) because the booms decrease investment spending
C) because the booms increase consumption spending
D) because the booms increase government deficit

Question

Quizplus · Accepted Answer

Stock market booms can lead to increased consumption spending as individuals feel wealthier (the wealth effect) and may spend more, potentially leading to inflation or economic imbalances.

Why Are Monetary Authorities Concerned About Stock Market Booms