If the stock market collapses,consumption will:
A) not be affected.
B) increase because stocks can now be purchased cheaply.
C) decrease because people feel less wealthy.
D) mildly increase.

Question

Quizplus · Accepted Answer

If the stock market collapses, people's investments will be worth less, making them feel less wealthy. As a result, they may reduce their spending and consumption, which will lead to a decrease in overall consumption. Option A and B are incorrect because a collapse in the stock market will have an impact on people's wealth, and it won't be business as usual. Option D is also incorrect because the collapse of the stock market may cause uncertainty and instability in the economy, leading people to be cautious about their spending and consumption.

If the Stock Market Collapses,consumption Will