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| WORD/TERM | DEFINITION |
| Underground Economy |
The underground economy or shadow economy consists of all commerce that is not taxed. This market includes not only legally-prohibited commerce (for example, drugs, prostitution, and gambling are illegal in some locales), but trade in legal goods and services because some income is not reported and consequently taxation is avoided, through money laundering, payment in cash (which almost never can be traced), or other means. The underground economy also includes transactions that governments may allow to be free of taxation, either by legal sanction or by simply choosing to refrain from enforcement of tax laws in certain markets. |