Standard life-cycle analysis predicts that a stock market crash that suddenly reduces the sale value of stocks ________ consumption expenditures.
A) reduces
B) increases
C) has no effect on
D) all of the above are possible with a market crash.

Question

Quizplus · Accepted Answer

A stock market crash would likely reduce the value of investments, causing individuals to have less wealth and potentially reducing their willingness and ability to spend money on consumption. Therefore, consumption expenditures would likely be reduced.

Standard Life-Cycle Analysis Predicts That a Stock Market Crash That