Question: Explain in logical terms why values of assets such as homes and stocks may decline during a weak economy. How does this affect your net
Explain in logical terms why values of assets such as homes and stocks may decline during a weak economy. How does this affect your net worth?
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Part
The values of assets decline during a weak economy because:Select the best answer below.
A
consumer demand is low under these conditions and this tends to result in higher prices. For example, the demand for homes declines when demand is low, causing sellers of homes to increase their prices in order to entice potential buyers.
B
consumer demand is low under these conditions and this tends to result in lower prices. For example, the demand for homes increases when demand is low, causing sellers of homes to reduce their prices in order to entice potential buyers.
C
consumer demand is high under these conditions and this tends to result in lower prices. For example, the demand for homes declines when demand is high, causing sellers of homes to reduce their prices in order to entice potential buyers.
D
consumer demand is low under these conditions and this tends to result in lower prices. For example, the demand for homes declines when demand is low, causing sellers of homes to reduce their prices in order to entice potential buyers.
Part
How does this affect your net worth?Select the best answer below.
A
A lower value for your home or stocks will only decrease your net worth if you sell them.
B
A lower value for your home or stocks will decrease your net worth.
C
A higher value for your home or stocks will decrease your net worth.
D
A lower value for your home or stocks will increase your net worth.
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