Questions and Answers
What does the primary sector do?
What is the role of the secondary sector?
What does the tertiary sector provide?
What factors determine the importance of the primary, secondary, and tertiary sectors?
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What are some reasons for the changing importance of the three sectors?
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What is meant by capital in a business context?
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What is de-industrialization?
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What is a mixed economy?
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What constitutes the public sector?
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What defines the private sector?
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Which of the following areas does the government control?
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What is privatization?
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What is interdependence in the context of business sectors?
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Study Notes
Classification of Businesses
- Primary Sector: Engages in extraction of natural resources; produces raw materials such as crude oil, iron ore, and agricultural products.
- Secondary Sector: Involves manufacturing; transforms raw materials into finished or semi-finished goods.
- Tertiary Sector: Focuses on services rather than goods; provides support to consumers and other industries.
Importance of Business Sectors
- Sector importance is measured by:
- Percentage of total workforce employed in each sector.
- Value of output as a share of total national production.
Changing Importance of Sectors
- Primary sector may decline due to resource depletion.
- Manufacturing competitiveness can decrease with emergence of countries like China.
- Rising living standards shift consumer spending towards services, reducing demand for manufactured goods.
Key Economic Concepts
- Capital: Refers to investment funds provided by owners to support business operations.
- De-industrialization: Represents a decline in the secondary sector's role within the economy.
Types of Economies
- Mixed Economy: Combines both public and private sector activities; integrates government and privatized enterprises.
Public vs Private Sector
- Public Sector: Comprises businesses owned or managed by the government, which determines production, pricing, and distribution of some services (e.g., healthcare and education) funded by taxes.
- Private Sector: Consists of independently owned businesses that operate primarily for profit, responding to market demands.
Government-Controlled Businesses
- Key areas under government control include health, education, defense, public transport, water supply, and electricity supply.
Privatization
- Process of transferring ownership of public sector enterprises to private investors; aims to enhance efficiency and increase investment capital.
Interdependence among Sectors
- Sectors are interlinked, with reliance on each other for various functions; for example, primary and secondary sectors depend on the tertiary sector for financial services.
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Description
This quiz focuses on the classification of businesses into primary, secondary, and tertiary sectors. Each sector is defined with examples showcasing their role in the economy. Perfect for IGCSE students to test their understanding of business sectors.