An economic crisis is a situation where the economy experiences a sudden downturn, leading to significant financial instability. This can result from various factors, such as high unemployment rates, declining consumer confidence, or a collapse in the stock market. During these times, businesses may struggle to survive, and individuals can face job losses and reduced income. Economic crises can also lead to government intervention, such as stimulus packages or changes in monetary policy by central banks like the Federal Reserve. These measures aim to stabilize the economy, restore confidence, and promote recovery, helping to prevent further damage to the financial system.