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Many people are familiar with the concept of a service economy, but few are aware of the fact that not all service activities are included in the service economy. The service economy is made up of activities that involve the exchange of goods and services between individuals. These activities include retail, hospitality, finance, educational, and health care services.
In addition to these activities, there are many activities that are part of the informal economy. These activities do not necessarily involve the exchange of goods or services and are not classified as part of the formal service economy. In the informal economy, people often do odd jobs, such as repairing cars, washing windows, or providing babysitting services. They are not typically considered part of the formal service economy because they are typically paid in cash and no exchange of goods and services occurs.
The informal economy has grown in recent years due to increasing poverty, low wages, and unemployment. It has become a way for many to supplement their meager incomes and even make ends meet. Although the informal economy is not part of the official statistics of a countrys economic performance, it is estimated to make up a significant portion of a countrys gross domestic product.
In conclusion, the service economy is made up of activities that involve the exchange of goods and services between individuals, while the informal economy is made up of activities that do not involve formal transactions or exchanges and may not be included in the official economic statistics of a given country. Although the informal economy has grown in recent years due to various social and economic factors, it still remains an important component of many countries economies.