Question

distinguish between formal and informal sectors of economy

Answer 1

Answer:

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Answer 2

Concept introduction:

An economy is a region where products and services are produced, traded, distributed, and consumed by various agents. According to the definition given in general, it is "a social domain that emphasizes the activities, discourses, and material manifestations linked with the creation, use, and management of scarce resources."

Explanation:

We have to distinguish between formal and informal sectors of economy.

A statement related to this has been given to us.

Formal sector :-

a) This sector is mainly supervised by the RBI.

b) It includes banks and cooperatives.

c) In this collateral is required.

d) It provides loans comparatively at a lower rate.

e) It doesn't lead to debt trap.

Informal sector :-

a) No organization to supervise this sector.

b) These are mainly consists of money lenders friends and relatives traders landowners e.t.c.

c) Collateral is not required.

d) This sector charges higher interest rates.

e) This could lead to death trap .

Final answer:

So, we have written the difference of formal and informal sector and this is our final answer.

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