Economics · Indian Economy
In an economy with high informality, policy transmission through formal institutions may be uneven because:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1a large segment may operate outside formal credit, taxation, social security, and regulatory channels✓
- 2informal firms never hire labour
- 3central banks cannot influence inflation at all
- 4informal activity is always fully captured in national accounts
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a large segment may operate outside formal credit, taxation, social security, and regulatory channels
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