Homonym: Depressions (Economic)
A depression is a prolonged period of economic downturn characterized by a significant decline in economic activity. During a depression, businesses may close, unemployment rates rise, and consumer spending decreases. This can lead to a cycle of reduced demand and further economic contraction.
Historically, the most notable example is the Great Depression of the 1930s, which resulted from a stock market crash and led to widespread hardship. Governments often respond to depressions with policies aimed at stimulating the economy, such as increasing public spending or lowering interest rates to encourage borrowing and investment.