Which of the following is NOT true with respect to macroeconomic problems and their effect on...

Which of the following is NOT true with respect to macroeconomic problems and their effect on the stock market?

A. Falling productivity drives earnings and stock prices down and inflation up

B. The slower the rate of economic growth, the worse the stock market will do.

C. Rising inflationary pressures are likely to compel the Federal Reserve to decrease interest rates.

D. Corporate earnings fall in a recession and drag down stock prices.

Solutions

Expert Solution

When there will be rising inflationary pressure, then, the Federal Reserve will be trying to increased interest rate in order to cut down the inflation because rising interest rate will lower the demand in the economy.

All the other options are true in respect to macroeconomic condition and share market.

Correct answer will be option (C) Rising inflation pressure are likely to compel the Federal Reserve to decrease the interest rates.

jeff jeffy answered 1 year ago

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