Suppose you are considering buying stock in the stock market, and your objective is to maximize 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 slows down, consumers tend to cut back on their spending, which often leads to an increase in demand for inferior goods, which are less expensive substitutes for normal goods. Therefore, purchasing stock in companies that produce inferior goods is likely to be the best option for maximizing net worth in this situation.

Suppose You Are Considering Buying Stock in the Stock Market