Chapter 7 Flashcards
output sectors
divisions of a macroeconomy based on what is being produced.
primary sector
the sector of the economy that involves the harvesting and extraction of natural resources and
simple processing of these raw materials into products that are generally sold to manufacturers as inputs.
secondary sector
the sector of the economy that involves converting the outputs of the primary sector into products suitable for use or consumption. It includes manufacturing, construction, and utilities.
manufacturing productivity
an index of the value of the goods produced per hour of labor in the manufacturing
sector
financial institution
any institution that collects money and holds it as financial assets.
financial assets
a variety of holdings in which wealth can be invested with an expectation of future return
financialization
a process in which the financial sector of the economy is increasingly able to generate and
circulate profits that are not closely related to the real economy
The harvesting of forest products would be a component of the __________ sector
Primary
Whereas the extraction of oil would fall under the ________ sector, the refining of petroleum would fall
under the __________ sector
Primary, Secondary
Utilities, such as electricity production, are a component of the __________ sector
Secondary
Marketing and retailing are a component of the ______ sector.
Tertiary
The tertiary sector is also called the ____ sector.
Service
The sector that dominates the U.S. economy, comprising 75% of all output, is the _____________ sector.
Tertiary
While the U.S. has less than ______ % of the world’s population, it uses about ________ % of the world’s
energy
5% World, 25% Worlds Energy
By 2012, the U.S. imported ________ % of its oil, most of it from the countries of _________, _________,
and _____________.
40% of Its Oil, Canada / Saudi Arabia/ and Mexico
Stocks, bonds, and money mutual funds are examples of _____________ assets
Financial
The sector that dominates the U.S. economy, comprising 75% of all output, is the ____ sector
Tertiary
T/F: The rudimentary processing of raw materials would fall under manufacturing in the secondary sector
False. It would fall under the primary sector.
T/F The products produced in the primary sector are generally sold to consumers in households.
False. They are generally sold as inputs to manufacturers
T/F The primary sector is no longer of great importance to the U.S. economy, given that it represents only
about 3% of the U.S. private economy and employs only 1% of U.S. workers.
False. The primary sector still plays an important role in the economy.
T/F About 60% of the U.S. fishery stocks are being harvested at or over the maximum sustainable level
True
T/F The absolute number of manufacturing jobs peaked years ago in virtually all industrial countries.
True
Briefly define the primary, secondary, and tertiary sectors
The primary sector involves the extraction and simple processing of raw materials which are sold as inputs into the production process. The secondary sector transforms these inputs into final products to consumers. The tertiary sector involves the provision of services, rather than tangible goods
How have the shares of the U.S. private economy attributed to each of the three sectors in the U.S. changed over the last few decades of the 20th century?
While the tertiary sector’s share of the private economy has grown over the last decades of the 20th century, both the
primary and secondary sectors have declined.
How have employment patterns in these three sectors changed since the 1960s?
-Since the 1960s, employment in the secondary sector started to decline, as employment in the primary sector continued
its decline. Employment in the tertiary sector increased.
What factor(s) explains the relative decline of the primary sector in the U.S.?
-Primarily it has been due to technological improvements, which has allowed the products of the primary sector to be obtained with fewer workers.
What are the current threats to agricultural productivity in the U.S.?
-The threats include: the depletion of groundwater supplies, and soil depletion.
How does agriculture, an activity primarily in the primary sector, spill over into the secondary and tertiary sectors?
Much of the processing of food is a manufacturing activity in the secondary sector. The marketing, retailing, and provisioning of food in restaurants are service sector activities in the tertiary sector.
Where does the U.S. get its oil from (as of 2012)?
As of 2012, the U.S. imports about 60% of its oil from: Canada, Saudi Arabia, Mexico, Venezuela, and Russia.
Why is the manufacturing sector in the U.S. losing jobs?
-The U.S. manufacturing sector is losing jobs for two reasons: manufactured products can be produced more cheaply abroad, and productivity advances (automation) are reducing the overall employment in manufacturing.
Critics of the service sector complain that service jobs pay poorly. Is this true?
Yes, on average the pay of service sector jobs are lower than manufacturing, for instance. However, some service sector
workers (such as doctors and lawyers) are paid very well.
(In Appendix) What are the four categories of the tertiary sector in the alternative categorization developed by the authors of the textbook? What kinds of activities are included in each?
The four categories are: ownership transactions (e.g. home ownership and activities involved in ownership transfers such as: transportation, warehousing, wholesale and retail trade, and real-estate rental and leasing) managing the
system (information, finance and insurance, and professional, scientific, and technical services, etc.), private social services (education, health care, and social services), and entertainment (which includes accommodation and food
services).
Why have services become such a significant part of the U.S. economy?
As our economy has become so much more complex, the service sector has grown to organize and
manage this huge complex system, e.g. making connections between buyers and sellers, collect and processing information, etc.
How large is the U.S. economy?
The largest in the world.
Which of the following would be a primary sector activity?
A household growing food in their garden
Which of the following would not be an activity in the primary sector?
The food processing industry
Maria is a farm worker. Jose is a medical doctor. Robin is a construction worker. Which of them works in
the secondary sector?
Robin
Which of the following would not be an activity of the secondary sector?
Transportation of goods to market
Sami works on an oil rig. Luis works at an oil refinery. Indira works as a gas station attendant. Which
of them works in the tertiary sector?
Indira
Which of the following would not be an activity of the tertiary sector?
Home construction and renovation
Which of the following best characterizes the historical trends of the secondary sector and its share of
the U.S. private economy?
The share of the secondary sector started to decline in the late 1960s.
Which of the following best captures how “value added” is distributed among the sectors?
3% in the primary sector, 64% in the tertiary sector.
Which of the following is not one of the trends in agriculture in the U.S.?
The average farm size has decreased.
Which of the following is not one of the characteristics of agriculture in the U.S.?
Almost all farm receipts come from selling crops
Which of the following about energy in the U.S. is false?
The U.S. has one of the highest energy efficiency rates (energy used per dollar of GDP) in the world.
Which of the following accurately describes energy consumption in the United States?
Over 80% of energy consumed in the U.S. comes from fossil fuels.
“Fracking” is …
none of the below: a. a non-toxic technique used to boost oil and gas production using water.
b. a relatively new technology that has the potential to dramatically boost biomass production.
c. a cutting-edge technology under development in places like France to reduce their dependence on
foreign oil.
d. only useful for extracting oil and gas deposits relatively close to the surface.
Which of the following regarding trends in manufacturing is true?
All of the below: a. The value of manufacturing output has remained fairly constant since 1960.
b. Employment in manufacturing has declined by about 30% since 1980, employing about 10% of all
workers today.
c. The number of workers in manufacturing declined from about 20 million in 1980 to about 14 million
today.
Which of the following explanations for the decline in employment in U.S.
manufacturing is true?
b. Americans are demanding more manufactured goods produced abroad. c. Advances in productivity have enabled more output to be produced by fewer workers.
What factor helped boost employment in U.S. automobile manufacturing, after the
employment decline in the 1970s?
All of the below: a. Foreign producers have a cost disadvantage of shipping their products to the U.S.
b. The greater productivity of skilled workers enabled U.S. workers to compete
against lower skilled low wage workers abroad.
c. Foreign companies increasingly located production facilities in the U.S.
d. Falling gas prices after the 1970s oil price shocks shifted demand back to larger U.S. made vehicles.
Which of the following about the service sector is false?
Service sector jobs are more homogeneous than jobs in manufacturing
Which of the following services is a U.S. export?
A German tourist comes to Disneyland for summer entertainment.
Which of the following is not a financial asset as identified in the chapter?
All of these are identified as financial assets in the chapter:
a. Stocks
b. Bonds
c. Foreign currencies
d. Certificates of deposit
tertiary sector -
the sector of the economy that involves the provision of services rather than of tangible goods
