What does a general, persistent decline in stock prices signal about an economy?
A) that the economy is about to enter a boom period because people will be able to buy stock for less money
B) that the economy is about to enter a recession because low stock prices may mean that people are expecting low corporate profits
C) that the economy is about to enter a boom because people expect prices of stock to rise
D) that the economy is about to enter a recession because low stock prices mean that corporations have had low profits in the past

Question

Quizplus · Accepted Answer

A persistent decline in stock prices may indicate that investors are expecting lower corporate profits, which can be a sign of an economic slowdown or recession. This can lead to decreased consumer confidence and reduced spending, further contributing to economic challenges.

What Does a General, Persistent Decline in Stock Prices Signal