Question

Name the sectors into which an economy is classified on the basis of the nature of economic activities

Answer 1

Typically,an economy can be classified into primary,secondary and tertiary or service sector based on the nature of economic activities.

Explanation:

The primary sector of an economy is basically associated with the production of raw materials and factors or inputs of production used by other economic sectors for production purposes.Some of the industries included in the primary sector commonly include agriculture and farming,fishing,mining,animal husbandry and so forth.Statistically,the developing and underdeveloped countries relies significantly on primary sector which is primarily an important sector for economic growth in these countries.

Secondary sector in the economy is sequentially dependent on the primary sector for raw material and factor inputs.The secondary sector basically uses the raw materials and factors/inputs of production supplied by the primary goods to produce the final goods and services or output and sell them in the final market to consumers or buyers.One of the main goals of the secondary sector is to ensure economic efficiency in the production process.An example of the secondary sector industry is manufacturing industry which uses various factors/inputs of production and raw materials such as labor,capital,physical inputs etc. to produce or manufacture various goods and services in the economy.

The tertiary or the service sector in the economy implies the production of intangible goods which cannot be physically touched,sensed or felt such as doctor,professors or faculties,lawyers,hospitality and tourism,restaurant services,insurance,banking and so forth.These intangible products are commonly known as "service" in Economics since they offer some kind of commercial or economic service to the general people,and not any tangible good or product.

Answer 2

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Classification of economic sectors on the basis of nature of activities are as follows:

(i) Primary sector:

When we produce goods by exploiting natural resources, it is an activity of the primary sector, such as agriculture, dairy farming, fishing, forestry.

(ii) Secondary sector:

In this, natural products are changed into other forms through manufacturing that we associate with industrial activity. The product is not produced by nature but has to be made and therefore, some process of manufacturing is essential. For example, using cotton fibre from the plant we spin, yarn and weave cloth.

(iii) Tertiary sector:

It helps in the development of the primary and secondary sectors. They provide aid or a support for the production process. Transport, storage, communication, banking, trade are some examples of tertiary activities