Where’s the money going during recessions?

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It vice versa where’s it coming from when the economy is booming?

When the economy is bad, it feels like there’s not enough money to go around, but when it’s good there’s plenty.

In: Economics

13 Answers

Anonymous 0 Comments

It’s still there, it’s just not being spent as often. “The economy” is people trading things for other things, like dollars, bananas, and foot massages. If I spend a dollar for a banana, the fruit seller can then spend that dollar for a foot massage, and the foot masseuse can give that same dollar to me when I beg on the bus. Three “dollars” spent but it’s one dollar. Then if we do the same thing again it’s six dollars, etc. It’s less about how much money there is and it’s more about how much money is moving around.

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