Which one of the following is likely to have a negative effect on stock prices?
A) falling interest rates
B) a decrease in the money supply (M2)
C) low inflation
D) a decrease in the unemployment rate

Question

Quizplus · Accepted Answer

A decrease in the money supply (M2) can lead to tighter monetary conditions, potentially slowing economic growth and negatively impacting stock prices. Lower liquidity can make it more expensive for companies to borrow, reducing investments and spending.

Which One of the Following Is Likely to Have a Negative