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

Turns out the money was never there to begin with. Debt = money, when people fail to pay debt it’s less money in circulation. Less money is burrowed because its riskier and more expensive, that means overall there is less money moving around, the economy is smaller, people and businesses go bankrupt.