Suppose households unexpectedly increase consumption

Reference no: EM13694600

Suppose households unexpectedly increase consumption and the central bank keeps the interest rate fixed. Which of the following will occur as a result of this consumer optimism?

A. an ambiguous effect on stock prices

B. no change in stock prices

C. stocks prices increase only if goods prices increase

D. a decrease in stock prices

E. an increase in stock prices

Reference no: EM13694600

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