Mary is interested in investing in the stock market, but having studied the Great Depression in school, she is afraid she could lose all of her money. She reads through the finance pages of the newspaper and sees that unemployment has dropped to the lowest level it has been in the past ten years, new businesses are opening, housing sales are up because interest rates are level, and the national debt is decreasing. If the economy is her only concern about buying stock, should she buy stock?
A) The level of unemployment, the rise in new business starts, the increase in housing sales, and the decrease in national debt indicate that the economy is growing so it would be a good time to buy stock.B) In spite of all of the positive indicators, it is never a good time to buy stock.C) The stock market works independent of unemployment, business starts, housing sales, and the level of the national debt so these things will not influence the rise or fall of the market.D) Mary should not base her decision to buy stock on the factors indicated, she should base it solely on the consumer price index.

A) The level of unemployment, the rise in new business starts, the increase in housing sales, and the decrease in national debt indicate that the economy is growing so it would be a good time to buy stock.

Explanation:

Mary should definitely buy stock. All the economic indicators that are doing well according to the financial paper are what is known as leading indicators: indicators whose tendency more or less predicts the tendency of the general economy in the short-term.

In other words, all the signs are indicating that the economy will continue to be strong for a good amount of time, time that Mary can use not only to buy stock, but also to reap the benefits from the stock.