If they're the stock market has a big boom, then people's general level of income is going to increase, and that is going to cause this increase in demand for Rembrandt paintings
What would happen to the demand of Rembrandt paintings?
The demand for Rembrandt paintings would increase because of the increase in people's wealth.
What will happen to interest rates if the public suddenly expects a large increase in stock prices?
Predict what will happen to interest rates if the public suddenly expects a large increase in stock prices? Interest rates will rise. The expected increase in stock prices raises the expected return on stocks relative to bonds and so the demand for bonds falls.
What would happen if interest rates went up?
When Fed rate hikes make borrowing money more expensive, the cost of doing business rises for public (and private) companies. Over time, higher costs and less business could mean lower revenues and earnings for public firms, potentially impacting their growth rate and their stock values.Apr 5, 2022
What would happen if the interest rate increases?
When interest rates are rising, both businesses and consumers will cut back on spending. This will cause earnings to fall and stock prices to drop. On the other hand, when interest rates have fallen significantly, consumers and businesses will increase spending, causing stock prices to rise.
How do stock prices affect people?
Fluctuations in stock prices affect the size of people's wealth and as a result may affect their willingness to spend. As they feel more wealthy, they tend to increase their spending. As the price of stocks held by consumers increases: consumer wealth and spending both increase.
Why are financial markets important?
These markets are critical for producing an efficient allocation of capital, which contributes to higher production and efficiency for the overall economy.
When did mortgage lenders require inspections?
Prior to 2008, mortgage lenders required a house inspection to assess its value, and often used the same one or two inspection companies in the same geographical market. Following the collapse of the housing market in 2008, mortgage lenders required a house inspection, but this was arranged through a third party.