Which of the following would be considered part of the underground economy?
A)tips reported to the IRS by a waitress
B)a barber giving a person a haircut in exchange for a meal
C)income earned through selling shares of stock
D)the portion of a professional athlete's salary that is economic rent
E)donations received by a local church in their collection plate on Sunday morning

Question

Quizplus · Accepted Answer

The underground economy involves transactions that are not reported to the government, and receiving a haircut in exchange for a meal would not be reported as income. A is not part of the underground economy as tips are reported to the IRS. C and E are not part of the underground economy as they are legal transactions that are reported to the government. D is a bit ambiguous as economic rent can sometimes be associated with illicit activities, but without more context it is not clear whether this portion of the athlete's salary is part of the underground economy.

Which of the Following Would Be Considered Part of the Underground