During the 2008-2009 recession,the average P/E ratio of firms in the U.S.stock market reached an extraordinarily high level because ________.

Question

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During a recession, companies typically experience a decrease in earnings due to reduced consumer spending and economic slowdown. As a result, the average P/E ratio, which is the ratio of a company's stock price to its earnings per share, tends to increase. In this case, the high P/E ratio was due to unusually low earnings during the recession.

During the 2008-2009 Recession,the Average P/E Ratio of Firms in the U.S.stock