Question

Stock market fluctuations

often go hand in hand with fluctuations in the economy more broadly.

rarely have anything to do with fluctuations in the economy more broadly.

have few, if any, macroeconomic implications.

are attributable to the widespread belief that the efficient markets hypothesis is correct.

Answer 1

Stock market is seen as an indicator of happenings in the country in broader sense.

Political and economic fluctuations influences the stock market and creates fluctuations in the stock market as well.

However, it does not means that stock market will imitate the fluctuations in the narrow sense.

As may factors pull the stock market in opposite directions at one given time, stock market fluctuations often go hand in hand with fluctuations in the economy more broadly.

Hence, the correct answer is the option (1).