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Economic Collapse

Definition

An economic collapse refers to a sudden breakdown of a national or regional economy. It's characterized by severe disruptions in normal commerce caused by hyperinflation, debt crisis or fall in currency value leading to bankruptcy or unemployment on a large scale.

Analogy

Imagine you're playing Jenga. Each block represents different sectors of an economy such as manufacturing, agriculture etc. If one block (sector) becomes unstable it might affect others causing them to wobble but if too many blocks become unstable at once - boom! The entire tower (economy) collapses!

Related terms

Recession: A period when economic activity slows down but doesn't completely collapse; it's like your Jenga tower wobbling but not falling over yet.

Depression: A long-term downturn in economic activity that affects multiple parts of an economy; imagine several rounds of Jenga where the tower keeps getting more and more unstable.

Hyperinflation: This is when prices increase rapidly as a currency loses its value; it's like trying to play Jenga with blocks that keep shrinking, making the game harder and harder.