Which of the following factors would contribute to an increase in stock prices?

Question

Quizplus · Accepted Answer

Low inflation would usually mean that economic growth is stable, which would make investors more confident in the market and willing to invest more, resulting in an increase in stock prices.

Option B, high interest rates, would typically lead to a decrease in stock prices as higher interest rates would lead to a decrease in borrowing and potentially a slowing of economic growth.

Option C, fiscal policy to increase tax rates, would decrease the amount of disposable income consumers have to spend and invest, causing a decrease in stock prices.

Option D, inflationary monetary policy, would lead to an increase in prices and potentially cause inflation, resulting in investors being more conservative with their investments and would lead to a decrease in stock prices.

Which of the Following Factors Would Contribute to an Increase