Question

In many developing countries, the informal sector is ________ because taxes are ________ and government regulations are ___________.

A) large,low,minimal.
B) large,high,extensive.
C) small,low,minimal.
D) small,low,extensive.

Answer 1

The informal sector in many developing countries is large, with low taxes and minimal government regulations.

Step-by-step explanation:

The correct answer is A) large, low, minimal.

In many developing countries, the informal sector is large because taxes are low and government regulations are minimal.

This means that a significant portion of economic activity takes place outside of the formal economy, and many people work in jobs that are not protected by labor laws or government regulations.

Examples of the informal sector include unlicensed street vendors, under-the-table domestic workers, and people running businesses from their homes.

For instance, in the United States, the informal economy includes activities like working as an unlicensed taxi driver or selling goods without a permit. It is estimated that the informal economy makes up around 10 percent of the overall U.S. economy.

However, in developing countries, the size and importance of the informal sector are much greater, accounting for a large portion of nonagricultural work.