Chapter-2: Classification of businesses

Question 1

What is the primary sector?

Answer 1

The industry which extracts and uses the natural resources of the Earth to produce raw materials which are then used by other businesses.

Question 2

What is the secondary sector?

Answer 2

The industry which manufactures goods using the raw materials which are provided by the primary sector.

Question 3

What is the tertiary sector?

Answer 3

The industry that provides services to consumers and other sectors of industry.

Question 4

What is a mixed economy?

Answer 4

It is an economy which has both the private and a public sector.

Question 5

What is deindustrialization? When does it occur?

Answer 5

The decline in the manufacturing or secondary sector of industry is called deindustrialization and it occurs when there is a decline in the importance of the secondary sector in a country.

Question 6

**What is the private sector?

Answer 6

Businesses and organizations which the government do not own. They make independent decisions on what to produce, how it produced and the prices which are to be charged for the products.

Question 7

**What is the public sector?

Answer 7

Businesses and organizations which the government own. The government or any other public sector authority makes the decisions on what to produce and the prices which are to be charged for the products.

Question 8

**What is capital?

Answer 8

The money invested into a business by the owners.