Why Do Economies Crash Like Dominoes?

Economies are like a row of dominoes: one falls, and the rest follow. When people lose their jobs or money, they stop spending, and that makes businesses struggle, then more people lose jobs, and so on until the whole economy feels like it’s crashing.

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Examples

A baker loses their job, so they can’t buy bread anymore, the grocery store now has less business.
A car company lays off workers, who then can’t afford new cars, the car company makes even less money.
When a bank fails, it affects everyone who used that bank to get loans.

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Categories: Economics · economic crash· financial crisis· economy· domino effect· economic theory