What does the term shadow economy mean? Shadow economy can be explained as revenue that's generated by providing goods and services but not reported. Most of the payment is paid in cash. How does the shadow economy affect GDP in different countries? Depending on the country, the shadow economy can be up to 50% of a country's GDP. What are the main factors influencing the shadow economy? There can be many factors that influence the shadow economy. It is believed that the shadow economy is made up of illegal activities. These crimes can generate profit for the sellers and encourage the shadow economy to flourish. Other influences can be high tax rates of a location can cause people who are struggling to enter the economy. Why is the shadow economy a challenge for governments? It's challenging since there is no way to correct the revenue that is transacted in the shadow economy. There is also a risk that follows since it is mainly illegal activities that can bring other types of crimes associated to drugs and trafficking. Reflectionthe students should include a paragraph in the initial response in their own words, using macroeconomic terminology,reflecting on what they learned from the assignment and how they think they could apply what they learned in the workplace or everyday life I've learned a good bit during this week's assignment. I've never given it much thought of how exactly one would think about when thinking of economics. short reply to this discussion