The size of the underground economy is probably large when:
A) the cost of doing business legally is low.
B) bribes are often necessary to cut through bureaucratic red tape.
C) taxes are low.
D) All of these statements are true.

Question

Quizplus · Accepted Answer

Bribes are often necessary in order to avoid bureaucratic red tape, which can make it difficult for businesses to operate legally. This can lead to the growth of an underground economy where businesses operate outside the legal system. Low taxes and low costs of doing business legally can also contribute to the size of the underground economy, but they are not the primary factors.

The Size of the Underground Economy Is Probably Large When