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When the economy grows, the market grows, most likely because
more investors are willing to take risks.
the government has decreased spending.
the government has increased taxation.
investors have a greater desire for profits.
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More investors are willing to take risks.
Explanation: Economic growth raises incomes and confidence, increasing investment and risk appetite, which expands the market. Decreased government spending or higher taxes would tend to slow growth, and "desire for profits" is constant — it's the willingness to act on opportunities (risk-taking) that drives market growth.
Explanation: Economic growth raises incomes and confidence, increasing investment and risk appetite, which expands the market. Decreased government spending or higher taxes would tend to slow growth, and "desire for profits" is constant — it's the willingness to act on opportunities (risk-taking) that drives market growth.
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