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  2. Business
  3. Economics Study Set 4
  4. Quiz 23: Aggregate Expenditure and Output in the Short Run

A Stock Market Boom Which Causes Stock Prices to Rise

Question 42
Multiple Choice

A stock market boom which causes stock prices to rise should cause A) a decrease in consumption spending. B) an increase in consumption spending. C) a decrease in wealth. D) a decrease in net export spending.

Related questions
Q 43
Housing wealth is equal to A) the market value of a house minus the value of loans people have taken out to pay for the house. B) the actual price paid for a house minus the current value of the house. C) the actual price paid for a house minus the value of any outstanding loans taken out to pay for the house. D) the current market value of the house should that house be sold within the next 30 days.
Q 44
Increases in housing prices A) decrease consumption in direct proportion to the housing price increases. B) directly increase consumption, as this increases household wealth. C) have no independent effect on consumption. D) decrease consumption only when the overall price level decreases in the economy.
Q 45
An increase in the real interest rate will A) cause consumers to spend more and save less. B) most likely lower consumers' purchases of durable goods. C) most likely lower the reward to savings. D) most likely lower the cost of borrowing.
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