I saw this term on the news when discussing the economy and current inflation going on. What does this mean?
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“Financial” shock refers to the financial sector of the economy. Think banks, insurance companies, investment folks, etc. Meaning these institutions are getting a shake up and readjusting like the rest of us.
For example: Banks make money by lending money. Now that interest rates are high, people are discouraged from taking loans from a bank. Less credit being lended and less money being made by the bank.
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