What is a depression in economics?
Q: What is a depression in economics?
A: A depression is a prolonged economic downturn marked by high unemployment rates and a decline in economic activity.
Q: How does a depression differ from a recession?
A: A depression is a more severe and longer-lasting downturn than a recession. It often involves higher levels of unemployment and greater disruption to the economy.
Q: What are some of the economic consequences of a depression?
A: Economic consequences of a depression can include falling prices, decreased access to credit, increased bankruptcies, and damage to banks, trade, and manufacturing.
Q: How long can a depression last?
A: A depression can last for several years, as it represents a prolonged and deep economic downturn.
Q: How does a depression impact unemployment?
A: A depression is typically characterized by high levels of unemployment, as many people are unable to find work and businesses may have to lay off workers to cut costs.
Q: Can a depression spread to other countries?
A: Yes, a depression in one country can quickly spread to other countries, particularly if they are closely interconnected through trade or financial markets.
Q: What is the impact of a depression on access to credit?
A: During a depression, access to credit becomes more difficult as banks and financial institutions are less willing to lend money due to the increased risk of defaults and bankruptcies.
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