7 Classification of business

Question 1

Define primary sector

Answer 1

Production involving the extraction of raw materials from the earth (agriculture, fishing, forestry, mining)

Question 2

Define secondary sector

Answer 2

Production involving the conversion of raw materials into finished or semi-finished goods (textile production, food processing)

Question 3

Define tertiary sector

Answer 3

Production of services in the economy (commercial services, financial services, household services, leisure services, proffessional services, transport)

Question 4

Define interdependence

Answer 4

When different sectors rely on each other

Question 5

Define de-industrialisation

Answer 5

Decline in macufacturing

Question 6

Why has manufacturing declined (deindustrialisation) in developed countries while services have grown?

Answer 6

1. People may prefer to spend their income on services rather than manufactured goods
2. Fierce competition in production for manufactured goods in developing countries (such as India, China, and Brazil)
3. As countries develop, the public sector grows (and since the public sector mainly consists of services, this adds to the tertiary sector)
4. Advances in technology mean that employment in manufacturing falls because machines replace people