How can a recession see a drop in profits and a rise in poverty? Where does all the money go, if not to the businesses or people?

Question

How can a recession see a drop in profits and a rise in poverty? Where does all the money go, if not to the businesses or people?

In: 6

Answer 1

Money isn’t the issue. Money is how we hold things of value we have bought, sold, or created. It’s the creation part that slows down in a recession. People lose their jobs and businesses do less business, both creating less wealth. There’s less new money being earned.