Question

Using complete sentences, give at least three reasons why tracking the informal sector of an economy is difficult.

Answer 1

Tracking the informal sector of an economy is difficult because governments have a hard time tracking things they don't regulate. Informal jobs are often temporary, seasonal, and unstable. Additionally, people in the informal sector often don't want to talk about what they do to make money.

Step-by-step explanation:

Answer 2

Lack of an identification system that helps keep records of an informal economy and a lack of informal business registration might result to difficulties in tracking and determining the informal sector of an economy.

Also, the contribution of the informal sector to the gross domestic product might be hard to track and determine.

It also becomes very difficult to use direct approaches such as surveys, tax audits and other tax compliance methods to determine, track, measure, and compare the informal sector with other countries.