Question:
The informal economy refers to
(1) activities that are illegal and hidden from the government.
(2) economic activities that are not monitored or regulated by the government.
(3) all economic activities conducted by small businesses.
(4) economic transactions that occur among large corporations and non-profit making institutions.
(5) the subsistence agricultural sector of the economy.
Correct Answer:
(2)
Answer Explanation:
The informal economy (or shadow economy) consists of legally permissible economic activities that are hidden from state authorities, meaning they are unrecorded, untaxed, and unregulated. Examples include street vendors, unregistered day laborers, and cash-in-hand trades.
Topic: National Income Year: 2024
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