Suppose you are considering buying stock in the stock market, and your objective is to maximise your net worth.Furthermore, your study of the market reveals that the economy will be slowing down over the next several months.Under these conditions, it would be best to purchase stock in companies that produce________.
A)normal goods.
B)luxury goods.
C)inferior goods.
D)price elastic goods.

Question

Quizplus · Accepted Answer

When the economy is slowing down, people tend to reduce their spending, and in such cases, they mostly go for inferior goods, i.e. low-cost products, which are essential for their daily needs. As a result, companies that produce such goods are likely to see a rise in their profits, and hence, investing in such firms can be profitable. Hence, choice C is the best option in this case.

Suppose You Are Considering Buying Stock in the Stock Market