The Informal Sector Can Be a Significant Drag on the Economies

question 87

Multiple Choice

The informal sector can be a significant drag on the economies of developing countries because the firms in the informal sector

• A)produce goods and services no one wants.
• B)sell their goods and services to citizens in other countries.
• C)do not pay taxes to the government.
• D)employ illegal immigrants from other countries.
• E)are better able to produce goods and services in high demand.

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Definitions:

Income from Operations

The profit realized from a business's ongoing operations, calculated before taxes and interests, reflecting the efficiency of the core business activities.

Service Department Charges

These are the costs allocated to the production departments from service departments within a company, assisting in accurately assessing the cost of production.

Income from Operations

An alternative term for Operating Income, highlighting earnings generated from a company's regular business activities.

Gross Profit

The income a company retains after subtracting the costs directly associated with production but before deducting operating expenses.