Stock market crash

The stock market is made up of stocks that investors already own in public companies. Changes in shareholdings could also symbolize a reflection of the current state of the economy.

When the stock market crashes, it could be a clear indicator of investors’ declining confidence in the current economy.

Rapid decrease in manufacturing orders

A business usually flourishes on how demanded are their products and services. However, when manufacturing orders show a decline, especially for a longer period of time, it might lead to a sudden recession or, even worse, an economic depression.

Control of prices and wages

Price controls already happened once while former U.S. President Richard Nixon was in the Oval Office. Back then, prices just kept going higher and higher.

Also, when wages are fully controlled by the government and companies are unable to lower them, businesses might be obliged to lay off employees just to stay afloat.

Deflation

Deflation means lowering consumer prices over time. Even though it might seem like a positive thing, as people would finally be able to afford more commodities, in reality, it means that there has been a drastic decline in demand.