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

It would be better to look at the velocity of money. During a recession, money doesn’t move around as fast, meaning less goods and services are consumed/produced.