Circuit breakers will shut down the market for a period of time if a dramatic drop in stock prices occurs.

Question

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Circuit breakers are put in place by stock exchanges to prevent extreme volatility in the market. If a certain threshold for a drop in stock prices is reached, trading will be halted temporarily to allow for investors to reassess and prevent panic selling. This is intended to prevent a complete market collapse.

Circuit Breakers Will Shut Down the Market for a Period