Imagine yourself as a business owner just before an economic event such as a recession or depression. What impact would a sudden lack of income have on the price of the goods you sell?

An economic depression is a long-term downturn in economic activity that is more severe than an economic recession. An economic recession is the slowing of business activities during a normal business cycle whereas the depression is unusual and an extreme form of a recession.

If an economic recession or depression is coming, and a sudden lack of income is happening all over, then the price of goods you sell will probably need to drop to accomidate the lack of income people are receiving. As a business owner, you want to make sure you are creating profit for yourself but also selling the items you have and not being stuck with them during a time where no one is spending money. If you are aware of the recession or depression happening, then you are also loosing funds for your personal items that are needed.

An economic depression is when the price of the goods in the market is decreasing. Your income will be less as the prices of the goods are low