Economics

Question 1

What does the informal sector consist of?

Answer 1

The informal sector includes independent, household unincorporated enterprises, and self-employed small-scale producers distributors of goods and services.

Question 2

The informal sector is recognized as a normal source of income.

True or False

Answer 2

False

Question 3

The informal sector is also known as __________.

Answer 3

the underground economy

Question 4

What are activities that fall under the informal sector?

Answer 4

Activities such as single proprietorships, partnerships, domestic helpers, professional services (that don’t meet specific criteria), and farms managed by cooperatives are part of the informal economy.

Question 5

What are the reasons for the increasing number of informal economic activities?

Answer 5

Various factors such as unequal opportunities and existing wage gap between the formal and informal sector as well as gender inequality in lower-income countries.