Economic Crisis

Definition

An economic crisis refers to a severe downturn in the economy characterized by high unemployment rates, declining GDP, financial instability, and negative impacts on businesses and households. It often leads to widespread hardship for individuals and may require significant government intervention.

Related terms

Hyperinflation: Hyperinflation occurs when prices rise rapidly within an economy, often spiraling out of control. It can lead to a loss of confidence in the currency and severely impact people's purchasing power.

Austerity Measures: Austerity measures refer to policies implemented by governments during an economic crisis to reduce spending and increase taxes. These measures are aimed at improving fiscal discipline but can also have negative effects on public services and welfare programs.

Debt Default: Debt default happens when a country is unable to repay its debts, leading to a failure to meet financial obligations. This can result in further economic instability and damage the country's credit rating.