Stock market crash

A stock market crash is an event where the value of company stocks experience a fast drop in price. A stock market crash is a normal phenomenon in a capitalist economy, where equities undergo heavy demand while the monetary base that completes the trade contracts. Clear signs of an impending crash can be detected however, by the time signs show up the general public will be in deep euphoria from the seemingly endless rise in prices. Since a stock market crash is a direct result from a contracting monetary base, recessions normally follow and if the economy keeps contracting, it could result in a full blown economic depression.

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