Practice question · Sort into groups
Formal or informal economy? Sort each activity.
Groups: Formal economy · Informal economy
- A registered freelance designer invoicing clients
- Undeclared cash-in-hand house cleaning
- Off-the-books tutoring paid in cash
- A salaried nurse with a contract and payroll taxes
- Unlicensed street vending
Hints
- The line is regulation and measurement, not legality of the product.
- Anything invisible to tax offices and statistics belongs to one side.
Show the answer
Formal economy: A salaried nurse with a contract and payroll taxes, A registered freelance designer invoicing clients
Informal economy: Undeclared cash-in-hand house cleaning, Unlicensed street vending, Off-the-books tutoring paid in cash
Why
The line is regulation and statistics, not legality of the product: the informal economy is invisible to tax offices and GDP alike, yet in some countries employs the majority.
Practise Work and Economy
The app has 6 more questions on this lesson, and keeps your place in the course. Business I is free to start.
More questions on Work and Economy
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