Bust

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DEFINITION

A period of time during which economic growth decreases rapidly. In the stock market, busts are usually associated with bear markets.

INVESTOPEDIA EXPLAINS

During busts, inflation decreases and in extreme cases can cause deflation. In addition, unemployment rises, income falls, and demand decreases. Because of the cyclical nature of the economy, a bust usually follows a boom in what is called the "boom and bust" cycle.


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