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

Economies are reciprocal. My expenses are your income, and vice-versa. So a recession is a reduction of the rate of those exchanges. People spend less, and therefore they earn less.