During 1982-1997, stock prices increased substantially. Which of the following helped to boost stock prices during this period?
A) higher interest rates and rapid growth of corporate profits
B) lower interest rates and rapid growth of corporate profits
C) higher interest rates and slow growth of corporate profits
D) lower interest rates and slow growth of corporate profits

Question

Quizplus · Accepted Answer

Lower interest rates reduce the cost of borrowing, encouraging investment and spending, while rapid growth of corporate profits increases investor confidence and stock valuations, both contributing to higher stock prices.

During 1982-1997, Stock Prices Increased Substantially