The process in which a cycle of falling asset prices and falling prices of goods and services can increase the severity of an economic downturn is called a

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Quizplus · Accepted Answer

The process described in the question is known as the debt-deflation process. It occurs when declining asset prices lead to a reduction in the value of collateral, making it difficult for borrowers to obtain credit. This, in turn, leads to a decrease in spending and a decrease in demand for goods and services, causing prices to fall further. The cycle continues, exacerbating the economic downturn.

The Process in Which a Cycle of Falling Asset Prices