the firms selected to be in the index. The Dow Jones Industrial Average is the price weighted average of 30

industrial stocks tracked on the New York Stock Exchange.

When the Dow Jones average rises from 5,000 to 10,000, you know that the average price of the stocks in that

index has roughly doubled. Figure 17.6 shows that stock prices did not rise much in the 1970s, but then

started a steady climb in the 1980s. From 2000 to 2013, stock prices bounced up and down, but ended up at

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about the same level.

17.2 • How Households Supply Financial Capital 419

FIGURE 17.6 The Dow Jones Industrial Index and the Standard & Poor’s 500, 1965–2021 Stock prices rose

dramatically from the 1980s up to about 2000. From 2000 to 2013, stock prices bounced up and down, but ended

up at about the same level. Since 2009, both indexes have for the most part increased.
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