What is a Depression?
A depression is a sustained downturn in economic activity characterized by high unemployment, decreased output and reduced levels of trade.
How Does a Depression Work?
Low levels of consumer confidence during times of depression generally result in a severe drop in consumer demand and spending. This leads companies to cut costs by reducing their workforces, resulting in high unemployment and even lower consumer confidence and spending. Prices and wages spiral downward, causing more turmoil.
The Great Depression of the 1930s is the best example of the far-reaching economic and social impact a depression can have.
Why Does a Depression Matter?
A depression can have devastating social and economic effects. It is generally accepted that dramatic government intervention is required in order to move an economy from depression to recovery.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
TreasuryDirect is the first and only financial services website that lets investors buy and...Read More →
By their names, these options strategies sound intriguing. Iron Butterfly. Iron Condor. Most investors, regardless of skill level, probably don't what these options strategies are about, but they...Read More →