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Financial panic begins & leads to an economic depression. True or False

User Anoosh
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Answer: false

Step-by-step explanation:

A financial panic is when depositors in banks try to withdraw their money and investors try to sell their financial assets. It usually occurs when their is a loss of trust in the financial system. The loss of trust could be as a result of bank failures or stock market crash.

Depression is when recession exists for a long period of time.

Although, financial panics have predated economic depression in history, this doesn't have to be the case if the financial panic there's a quick intervention and proper management of the panic.

User Mario Trucco
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