CH 5: Informal Sector
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Questions and Answers

What does the informal sector in South Africa encompass?

  • Technologically advanced businesses
  • Unregistered economic activities not monitored by the government (correct)
  • Small-scale operations with high capital investment
  • Registered economic activities monitored by the government

Which of the following is a characteristic of informal sector employment?

  • High capital investment
  • Access to health insurance benefits
  • Low technological use (correct)
  • Presence of formal credit facilities

What is a common form of casual labor in the informal sector?

  • Accounting
  • Computer programming
  • Engineering
  • Gardening (correct)

What is a key feature of workers in the informal sector?

<p>Self-employment without formal registration (B)</p> Signup and view all the answers

Why is the informal sector considered vulnerable?

<p>Lack of health insurance benefits (A)</p> Signup and view all the answers

What is a common activity in the informal sector related to selling goods?

<p>Street vending (C)</p> Signup and view all the answers

What is a distinguishing characteristic of businesses in the informal sector?

<p>Family-owned operations (D)</p> Signup and view all the answers

Which of the following is true about tax payments in the informal sector?

<p>'Tax evasion' is common practice (B)</p> Signup and view all the answers

What contributes to the informality of the informal sector?

<p>'Absence of formal registration' (B)</p> Signup and view all the answers

What aspect characterizes businesses in the informal sector regarding capital investment?

<p>Low capital investment requirements (D)</p> Signup and view all the answers

What is one of the factors contributing to the prevalence of informal sector employment in South Africa?

<p>High unemployment rates in the formal sector (A)</p> Signup and view all the answers

Why do immigrants in South Africa sometimes turn to the informal sector for employment?

<p>Inability to find legal employment (C)</p> Signup and view all the answers

What is a major challenge faced by the informal sector in South Africa due to lack of legal recognition?

<p>Exclusion from formal economic spaces (C)</p> Signup and view all the answers

What role does the informal sector play in South Africa's economy according to the text?

<p>Contributing significantly to the GDP and economic diversity (D)</p> Signup and view all the answers

Which strategy is suggested in the text to strengthen the informal sector in South Africa?

<p>Facilitating access to credit and banking services (B)</p> Signup and view all the answers

What impact does lack of infrastructure have on the informal sector in South Africa?

<p>Limits access to necessary infrastructure for trading (A)</p> Signup and view all the answers

Why do individuals without formal qualifications struggle to secure formal employment in South Africa?

<p>'Formal jobs require certain educational certifications' (B)</p> Signup and view all the answers

How do fluctuations in demand impact the informal sector in South Africa?

<p>'Create market instability and unreliable income' (C)</p> Signup and view all the answers

What could enhance the livelihoods of waste pickers in Cape Town's Informal Recycling Sector according to the text?

<p>'Formal recognition and support systems' (D)</p> Signup and view all the answers

How does the informal sector provide goods and services differently from the formal sector in South Africa?

<p>'Offers goods and services at accessible locations and prices' (C)</p> Signup and view all the answers

What is a common form of work found in the informal sector in South Africa?

<p>Street vending (C)</p> Signup and view all the answers

Which of the following is a distinguishing characteristic of businesses in the informal sector regarding technology use?

<p>Low technological use (D)</p> Signup and view all the answers

What contributes to the informality of the informal sector employment in South Africa?

<p>Lack of formal registration (C)</p> Signup and view all the answers

Why do workers in the informal sector often face challenges related to social security benefits?

<p>Lack of formal employment contracts (C)</p> Signup and view all the answers

Which of the following is a significant difference between formal and informal sector businesses in South Africa?

<p>Formal registration requirements (D)</p> Signup and view all the answers

What type of labor is common in the informal sector and involves tasks like gardening, painting, and cleaning?

<p>Casual labor (D)</p> Signup and view all the answers

Why do businesses in the informal sector typically lack access to formal credit facilities?

<p>Absence of formal registration (C)</p> Signup and view all the answers

What is one of the factors leading individuals to join the informal sector in South Africa?

<p>Difficulty securing formal employment due to lack of qualifications (C)</p> Signup and view all the answers

Which challenge does the informal sector in South Africa face due to a lack of legal recognition?

<p>Exclusion from formal economic spaces (D)</p> Signup and view all the answers

How does poverty influence individuals' involvement in the informal sector in South Africa?

<p>It compels them to undertake any available income-generating activity. (C)</p> Signup and view all the answers

Why do immigrants in South Africa sometimes turn to the informal sector for employment?

<p>Due to limited access to legal employment (A)</p> Signup and view all the answers

What role does entrepreneurship play in the informal sector in South Africa?

<p>Encourages entrepreneurial skills and self-reliance among South Africans. (B)</p> Signup and view all the answers

How can the livelihoods of waste pickers in Cape Town's Informal Recycling Sector be enhanced?

<p>Formal recognition and support systems (B)</p> Signup and view all the answers

What contributes to individuals facing challenges like lack of infrastructure in South Africa's informal sector?

<p>Limited access to proper trading facilities and infrastructure (D)</p> Signup and view all the answers

What is a common reason individuals without formal qualifications struggle in South Africa's formal job market?

<p>Challenges securing formal employment opportunities (B)</p> Signup and view all the answers

How does lack of infrastructure impact businesses in South Africa's informal sector?

<p>Contributes to inadequate trading facilities and infrastructure access (C)</p> Signup and view all the answers

What effect does high unemployment rates have on individuals' transition to the informal sector in South Africa?

<p>Pushes individuals into the informal sector due to job losses in the formal sector (D)</p> Signup and view all the answers

What term describes economic activities in South Africa that are unregistered and not monitored by the government?

<p>Informal sector (D)</p> Signup and view all the answers

Which characteristic is typical of businesses in the informal sector regarding capital investment?

<p>Low capital investment (B)</p> Signup and view all the answers

Which feature is common among workers in the informal sector?

<p>Social security benefits (A)</p> Signup and view all the answers

Why do participants in the informal sector typically not pay income tax?

<p>Tax evasion (C)</p> Signup and view all the answers

What type of labor is commonly found in the informal sector and involves tasks like gardening, painting, and cleaning?

<p>Casual labor (D)</p> Signup and view all the answers

Which factor contributes to workers in the informal sector often facing challenges related to social security benefits?

<p>Lack of formal registration (D)</p> Signup and view all the answers

How do businesses in the informal sector tend to differ from formal businesses regarding technology use?

<p>Minimal use of technology (B)</p> Signup and view all the answers

What distinguishes businesses in the informal sector regarding access to formal credit facilities?

<p>'Blacklisted' from credit facilities (B)</p> Signup and view all the answers

Why are workers in the informal sector considered vulnerable according to the text?

<p>'Blacklisted' from social security (B)</p> Signup and view all the answers

What is a common form of casual labor in the informal sector according to the text?

<p>Painting and cleaning tasks (B)</p> Signup and view all the answers

What contributes to the high prevalence of informal sector employment in South Africa?

<p>Formal sector job losses due to factors like mechanization (D)</p> Signup and view all the answers

Why do individuals without formal qualifications struggle to secure formal employment in South Africa?

<p>High competition for formal jobs (B)</p> Signup and view all the answers

What common challenge do immigrants in South Africa face, leading them to turn to the informal sector?

<p>Legal barriers to secure formal employment (A)</p> Signup and view all the answers

How does environmental exposure affect informal businesses in South Africa?

<p>It exposes traders and goods to weather conditions (A)</p> Signup and view all the answers

What impact do fluctuations in demand have on the informal sector in South Africa?

<p>Lead to an unreliable income (D)</p> Signup and view all the answers

Which of the following is a strategy for strengthening the informal sector in South Africa?

<p>Facilitating access to credit and banking services (C)</p> Signup and view all the answers

What role does the informal sector play in South Africa's economy, particularly for lower-income consumers?

<p>Offering goods and services at accessible locations and prices (A)</p> Signup and view all the answers

How does lack of legal recognition impact informal businesses in South Africa?

<p>It leads to exclusion from formal economic spaces and harassment (A)</p> Signup and view all the answers

What contributes to individuals turning to the informal sector for income generation in South Africa?

<p>'The need to survive compels individuals to undertake any available form of income-generating activity' (B)</p> Signup and view all the answers

'Policy support and legalization' is suggested as a strategy for strengthening the informal sector. What would this involve?

<p>'Implementing policies that recognize and support informal businesses' (C)</p> Signup and view all the answers

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