The stock market is a barometer of business expectations regarding future investment, but because it has no tangible impact on interest rates it likely does not influence employment, growth and the general health of the economy.

Question

Quizplus · Accepted Answer

The stock market can influence the economy in various ways, including affecting consumer and business confidence, impacting investment decisions, and through the wealth effect, potentially influencing spending and investment by individuals and companies. Changes in stock market conditions can also affect interest rates indirectly through monetary policy decisions.

The Stock Market Is a Barometer of Business Expectations Regarding