From the course: Economics for Everyone: Understanding a Recession
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Stock market
From the course: Economics for Everyone: Understanding a Recession
Stock market
- One of the most important things people tend to look at when they're worried about recession is the stock market. But the stock market is not the economy. Sometimes, the stock market's a little bit ahead of the economy, sometimes it's a little bit behind, and we could debate which happens more often. But what we generally probably will agree on is that if the economy's in recession, the stock market's likely to be under pressure, stocks are losing money. And if the economy's doing well, stock prices are usually up. Those two things are pretty consistent. Now, the way people talk about the stock market tends to be in two ways, they talk about bear markets and they talk about bull markets. When the economy's in recession, very often, in what's called a bear market. The reason it's called a bear market is because when a bear attacks you, it falls on you, and the stock market goes down. This is different than a bull…
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