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. government regulation and oversight

The formal sector consists of registered, regulated businesses that pay taxes and follow labor laws; the informal sector is unregulated, often untaxed, and outside formal oversight (e.g., street vendors, casual labor).