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:

Question

Quizplus · Accepted Answer

The debt-deflation process, as identified by economist Irving Fisher, is a phenomenon in which falling prices lead to an increase in the real burden of debt, which in turn leads to further asset price declines and deflation. This cycle can cause a severe economic downturn, as it becomes increasingly difficult for individuals and businesses to repay their debts, leading to defaults and increased financial instability.

The Process in Which a Cycle of Falling Asset Prices