A stock market crash which causes stock prices to fall should cause
A)a decrease in consumption spending.
B)an increase in consumption spending.
C)an increase in wealth.
D)no change in consumption spending.

Question

Quizplus · Accepted Answer

A stock market crash typically leads to a decline in overall economic confidence and a decrease in household wealth as stocks lose value. This makes individuals and businesses more cautious about their spending, and as a result, consumption spending is likely to decrease.

A Stock Market Crash Which Causes Stock Prices to Fall