How do fluctuations in stock prices affect the economy

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1. How do fluctuations in stock prices affect the economy?

2. A student makes the following observation: "The Dow Jones Industrial Average currently has a value of 10,900, while the S&P 500 has a value of 1,200. Therefore, the prices of the stocks in the DJIA are almost five times as high as the price of the stocks in the S&P 500." Briefly explain whether you agree with the student's reasoning.

Reference no: EM131305354

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