Question

What is a major difference between formal and informal economic sectors?A. the dress code required of workers B. whether jobs deal with raw materials or finished products C. government regulation and oversight D. whether or not the nation has a comparative advantage

Answer 1

C would be the best choice

Answer 2

The answer is C: government regulation and oversight.

Formal sectors of the economy are characterized by being regulated and checked by government agencies, most notably the office in charge of taxation. Informal sectors, on the other hand, refer to the kind of labor that is not regulated by government and that, as such, is not object of taxation. Informal economic sectors, because they are overlooked by government regulation, do not contribute to the GDP of a country.