how does the economy operate around “dirty” money that has yet to be laundered. Does it effect it because it’s not technically “in circulation”
In: 5
The economy works based on all the money that is flowing, dirty or not. The money you earned from a summer job that you have stashed in your room, as far as the economy is concerned, doesn’t exist, because it’s not being spent or invested. The “dirty” money that the local drug dealer spends on groceries or gas is impacting the economy, even though it’s “dirty” and hasn’t been laundered. However, the money they have buried in their yard doesn’t affect the economy, because, like your stash, the money isn’t being invested or spent.
“Dirty” money IS in the economy and IS in circulation. It just doesn’t pay taxes, i.e. it is concealed to the government, but it used to purchase things, it changes hands, etc.
Latest Answers