Answer :
The effect on the S&P 500, given the annual rate of growth in GDP and the actual rate of growth is The S&P 500 will decrease.
What happens when GDP grows slower than predicted?
When the Gross Domestic Product grows at a rate that is slower than what economists predicted as the annual rate of growth, it means that the economy of the country grew less than it should have. This is because the GDP stands for Gross Domestic Product and shows the amount of output that was produced in a country in a given year.
The reason that the Gross Domestic Product would have grown slower than was predicted is that companies did not produce as much as they were expected to. When this happens, the stock prices of the companies will decrease because people would now expect less return. As the S&P 500 shows the stock value of several companies, it will decrease when the annual rate of GDP growth is less than expected.
Full question is:
Economists expected GDP to grow at an annual rate of 3%. It was recently annouced that GDP grew at an annual rate of 2%. What do you expect to happen to the S&P 500?
Find out more on GDP growth at https://brainly.com/question/1690575
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