A drop in stock prices will __________ net wealth and __________ consumption.
A)reduce; increase
B)reduce; decrease
C)reduce; not change
D)increase; increase
E)increase; decrease

Question

Quizplus · Accepted Answer

A drop in stock prices will reduce net wealth because the value of the stocks owned by individuals will decrease. This reduction in net wealth will result in a decrease in consumption because people will have less disposable income to spend.

A Drop in Stock Prices Will __________ Net Wealth and __________

A Drop in Stock Prices Will Net Wealth and