Impact of Economic Events on Stock Markets MCQs September 11, 2025 by u930973931_answers 50 Score: 0 Attempted: 0/50 Subscribe 1. A sudden increase in inflation generally leads to: (A) Rise in stock prices (B) Fall in stock prices (C) No effect on stock prices (D) Guaranteed growth in all sectors 2. A cut in interest rates by the central bank usually: (A) Boosts stock markets (B) Crashes stock markets (C) Has no effect on stock markets (D) Only affects foreign trade 3. A global recession is most likely to cause: (A) Bull run (B) Bearish trend (C) No change (D) Increase in dividends 4. Which sector benefits the most when crude oil prices fall? (A) Oil marketing companies (B) Airlines and transport (C) Energy producers (D) Gold mining companies 5. A sharp rise in gold prices usually indicates: (A) Investor confidence in markets (B) Market instability or fear (C) Strong bull run (D) Stable interest rates 6. Which event in 2008 led to a global stock market crash? (A) Dot-com bubble burst (B) Lehman Brothers collapse (C) 9/11 attacks (D) Brexit vote 7. The dot-com bubble burst occurred in which year? (A) 1995 (B) 2000 (C) 2003 (D) 2007 8. The COVID-19 pandemic initially caused: (A) Bull run (B) Market crash (C) Stable markets (D) No effect 9. Which country’s debt crisis in 2010–2012 impacted global stock markets? (A) Italy (B) Greece (C) Japan (D) Brazil 10. Stock markets often react negatively to: (A) Lower taxes (B) High fiscal deficit (C) Economic reforms (D) Low interest rates 11. A strong GDP growth rate usually: (A) Boosts stock markets (B) Lowers stock prices (C) Crashes stock markets (D) Has no effect on stocks 12. High unemployment in an economy generally: (A) Increases stock demand (B) Reduces investor confidence (C) Creates bullish momentum (D) Increases exports 13. When the central bank increases repo rate, stock markets usually: (A) Rise sharply (B) Remain stable (C) Decline (D) Increase dividends 14. Which sector is most sensitive to interest rate hikes? (A) IT (B) Banking and Finance (C) FMCG (D) Pharmaceuticals 15. Currency depreciation generally makes stock markets: (A) Bullish in export-oriented sectors (B) Bearish in export-oriented sectors (C) Neutral (D) Bullish in import-heavy sectors 16. Which geopolitical event in 2001 led to a stock market crash? (A) Gulf War (B) 9/11 attacks (C) Brexit (D) Asian Crisis 17. The Asian Financial Crisis took place in: (A) 1987 (B) 1991 (C) 1997 (D) 2001 18. Brexit referendum in 2016 initially caused: (A) Surge in global stock markets (B) Fall in global stock markets (C) No impact (D) Only affected US markets 19. Trade wars between countries often result in: (A) Stock market boom (B) Stock market volatility (C) Investor confidence (D) Increased FDI inflow 20. Stock markets usually view fiscal stimulus as: (A) Positive for growth (B) Negative for growth (C) Neutral (D) Uncertain 21. Which commodity price increase often negatively impacts stock markets in India? (A) Gold (B) Oil (C) Coal (D) Wheat 22. Stock market crashes often lead investors to move towards: (A) Riskier assets (B) Safe havens like gold (C) Penny stocks (D) Crypto only 23. High fiscal deficit generally leads to: (A) Higher inflation (B) Lower inflation (C) No inflation (D) Deflation 24. Strong FII inflows into stock markets cause: (A) Market rally (B) Market crash (C) Neutral effect (D) Only affects bonds 25. Outflow of foreign institutional investment usually results in: (A) Rise in stock indices (B) Fall in stock indices (C) Stability in markets (D) Rise in bond yields only 26. Quantitative easing by central banks generally: (A) Raises stock markets (B) Crashes stock markets (C) Lowers liquidity (D) Increases interest rates 27. High inflation expectations make investors prefer: (A) Equities (B) Bonds (C) Commodities (D) Bank deposits 28. Which market indicator is considered a sign of recession? (A) Rising bond yields (B) Inverted yield curve (C) High corporate earnings (D) Higher GDP growth 29. Stock markets often react positively to: (A) Stable government policies (B) Political uncertainty (C) Natural disasters (D) High unemployment 30. Which event in 2020 caused unprecedented volatility in stock markets? (A) Trade war (B) COVID-19 pandemic (C) Oil crisis (D) Brexit negotiations 31. Economic sanctions on a country usually cause: (A) Stock market growth (B) Stock market decline (C) Stability in markets (D) No effect 32. A higher corporate tax rate generally: (A) Boosts stock market (B) Reduces corporate profits (C) Encourages investment (D) Strengthens dividends 33. A budget announcing infrastructure spending usually benefits: (A) Pharma sector (B) FMCG sector (C) Cement and steel sector (D) IT sector 34. Which global crisis in 1929 caused the Great Depression? (A) Dot-com bubble (B) Wall Street crash (C) Asian financial crisis (D) Oil shock 35. Natural disasters usually cause stock markets to: (A) Rise sharply (B) Show short-term decline (C) Remain stable (D) Increase dividends 36. Higher foreign exchange reserves usually: (A) Boost investor confidence (B) Cause panic in markets (C) Crash banking sector (D) Have no effect 37. Which global event in 1973 caused a major oil crisis? (A) Gulf War (B) OPEC embargo (C) Asian financial crisis (D) Enron scandal 38. The term “Black Monday” in 1987 refers to: (A) Currency crash (B) Stock market crash (C) Oil price crash (D) Banking crisis 39. Rising bond yields often indicate: (A) Strong equity growth (B) Fear of inflation (C) Market stability (D) Bullish trend 40. A stable currency exchange rate usually: (A) Creates volatility in markets (B) Increases investor confidence (C) Reduces corporate earnings (D) Crashes markets 41. High corporate earnings are usually followed by: (A) Stock market rally (B) Stock market crash (C) No effect (D) Increase in inflation 42. Which sector benefits most from lower crude oil prices? (A) Aviation (B) Gold mining (C) Telecom (D) FMCG 43. A pandemic usually causes: (A) Market euphoria (B) Supply chain disruptions (C) Lower inflation (D) Neutral effect 44. Foreign currency appreciation against rupee usually helps: (A) Exporters (B) Importers (C) Domestic consumers (D) FMCG sector 45. High government borrowing often leads to: (A) Lower interest rates (B) Higher interest rates (C) Neutral market effect (D) No inflation 46. Stock markets often react negatively to: (A) Political instability (B) Policy reforms (C) Growth in GDP (D) Lower inflation 47. A trade surplus usually boosts: (A) Stock markets (B) Inflation (C) Unemployment (D) Banking NPAs 48. An economic boom phase is usually accompanied by: (A) Rising stock prices (B) Declining stock prices (C) Bearish trend (D) Reduced corporate earnings 49. When inflation is under control and GDP is growing, stock markets generally: (A) Rise (B) Fall (C) Crash (D) Stay flat 50. Globalization has made stock markets: (A) Less volatile (B) More interconnected (C) Immune to global events (D) Dependent only on domestic policies