Bust

DEFINITION of 'Bust'

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

BREAKING DOWN 'Bust'

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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RELATED FAQS
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    Read about the fundamental causes of the economic boom-bust cycle, why some recessions are necessary and why asset bubbles ... Read Answer >>
  4. What is the average length of the boom and bust cycle in the U.S. economy?

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  5. What causes negative inflation or deflation?

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