An examination of the relationship between stock prices and the economy has shown that the relationship is
A) Weak, and that stock prices turn after the economy does.
B) Nonexistent.
C) Strong, and that stock prices turn after the economy does.
D) Strong, and that stock prices turn before the economy does.
E) Weak, and that stock prices turn before the economy does.

Question

Quizplus · Accepted Answer

Stock prices are often considered a leading indicator of the economy, meaning they tend to turn before the economy does, reflecting investor expectations about future economic conditions.

An Examination of the Relationship Between Stock Prices and the Economy