What is an underground economy?

Question

this is an economics question

Answer 1

Underground Economy :

The underground economy or black market is a market consisting of all commerce on which applicable taxes and/or regulations of trade are being avoided. The term is also often known as the underdog, shadow economy, black economy or parallel economy.

In modern societies the underground economy covers a vast array of activities. It is generally smallest in countries where economic freedom is greatest, and becomes progressively larger in those areas where corruption, regulation, or legal monopolies restrict legitimate economic activity.

Pricing

Goods acquired illegally can take one of two price levels:

    * They may be less expensive than legal market prices, as the supplier does not incur the normal production costs or pay the usual taxes. This is usually the case in the underground market for stolen goods.

    * Alternatively, illegally supplied goods may be more expensive than normal prices, as the product in question is difficult to acquire or produce, dangerous to deal with or may hardly be available legally. This is usually the case in the underground market for goods that are illegal to purchase, sell or possess.

Answer 2

black market.

Answer 3

The underground economy or black market is a market consisting of all commerce on which applicable taxes and/or regulations of trade are being avoided. The term is also often known as the underdog, shadow economy, black economy or parallel economy.

In modern societies the underground economy covers a vast array of activities. It is generally smallest in countries where economic freedom is greatest, and becomes progressively larger in those areas where corruption, regulation, or legal monopolies restrict legitimate economic activity.