The underground economy consists of ?
Correct answer: C. legal transactions not declared for tax and illegal activities
- A. legal transactions
- B. part of the rail network
- C. legal transactions not declared for tax and illegal activities
- D. the water distribution system
Explanation
The underground economy covers both lawful transactions hidden from tax authorities and unlawful activities. Thus, it is broader than tax evasion alone and is unrelated to physical infrastructure such as railways or water systems.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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