Which of the Following Is Not True Regarding the Informal

question 225

Multiple Choice

Which of the following is not true regarding the informal economy?

• A) Informal market activities tend to be paid under the table.
• B) Informal market activities are not reported to the government for tax purposes.
• C) Informal market activities do not contribute to the standard of living of citizens.
• D) Countries with large informal economies have total output that is less than their official GDP statistics.

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Definitions:

Market Rate

The interest rate available in the marketplace for similar transactions.

Times Interest Earned Ratio

A financial metric that evaluates how well a company can cover its interest expenses with its earnings before interest and taxes.

Net Income

Net income, also known as net profit, is the total profit of a company after all revenues, costs, and expenses have been deducted.