Question

Why is the 'income approach' often used for the informal or unorganized sectors?

• A. It's difficult to track production and expenditure data for these sectors.
• B. The income approach offers a more direct and accurate measure of individual economic contributions.
• C. It simplifies government taxation and regulatory processes for unregistered businesses.
• D. These sectors are characterized by low capital investment, making income generation the primary economic activity to measure.

Answer 1

Answer:

A. It's difficult to track production and expenditure data for these sectors.

• Data on production and expenditure for the unorganized sector is often unavailable, making the income approach (estimating income from wages, etc.) a more feasible method.