2. Information and market returns [LO 13.3] Suppose the government announces that, based on a just-completed survey, the growth rate in the economy is likely to be 2 per cent in the coming year, as compared to 5 per cent for the past year. Will security prices increase, decrease or stay the same following this announcement? Does it make any difference whether the 2 per cent figure was anticipated by the market?

Explain.