QUESTION 8 According to survey data summarized by Banerjee and Duflo (2007), which of the following characterizes the consumption spending patterns of the poor? O A. The poor tend to spend huge portions of their income on food, leaving little for education, health, or leisure spending. Q B, The poor often do not consume enough calories, leaving them underweight and malnourished. They could spend less on festivals, alcohol, and tobacco, but they choose not to. O c. The poor should be making better choices. They should stop spending money on new cell phones and should instead spend more on health care for their families. O D.The poor are frequently working as full time employees of large, formal sector firms. QUESTION 9 Which of the following theories best explains the size and persistence of the informal sector in many developing economies, according to La Porta and Shleifer (2014)? O A. Informal rms rationally exit the formal sector because the benets of formality are low. Q B. Excessive red tape and formalization frictions prevent informal rms from registering with the government. O C. Informal rms sell low quality products to low-income consumers, while formalsector rms sell high quality products to highincome consumers. O D. Formal firms often rely on informal rms for intermediate inputs, reducing their labor and input costs