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Economic Sectors

Have you ever had a job? If you have, it's likely you will have worked in one of the global economic sectors. Overall, there are five major economic sectors, all including different forms of work activity. But what exactly is the definition of an economic sector? How do we classify these? What are some examples of different jobs within each sector? So many questions; we're here to answer them. Let's dive in!

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Economic Sectors

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Have you ever had a job? If you have, it's likely you will have worked in one of the global economic sectors. Overall, there are five major economic sectors, all including different forms of work activity. But what exactly is the definition of an economic sector? How do we classify these? What are some examples of different jobs within each sector? So many questions; we're here to answer them. Let's dive in!

Economic Sectors Definition

Imagine some of the different jobs undertaken to make it possible for you to use the electronic device that you are now using. First, miners had to extract minerals from the Earth for many of the parts of the device. Later, these minerals were transformed by factory workers into electronic components such as computer chips. Then, various people employed in services, such as delivery truck drivers, helped get the device to you and other customers. Before your device was even made, people involved in product development at the electronics company designed how your device would work and look. Then there are also the top executives at the company making important and costly decisions. Each type of work just discussed is one example of a job from a different economic sector.

An economic sector is a part of the economy where a particular business activity is undertaken.

Economic Sectors Classification

There are thousands of different jobs performed by people around the world, contributing to the modern global economy. To better make sense of how different types of work contribute to economic development and trade, these jobs can be classified into one of five economic sectors. These sectors are the Primary Sector, Secondary Sector, Tertiary Sector, quaternary sector and quinary sector.

SectorActivity
Primary SectorWork performed in the primary sector produces raw materials and agricultural goods. It includes jobs in farming, mining, fishing, and forestry.
Secondary SectorSecondary sector jobs involve turning raw materials into more valuable, manufactured items. Typically, these jobs are done in factories.
Tertiary SectorTertiary sector jobs do not actually produce anything, but instead, involve people providing services to others. This can be anything from a taxi driver to a nurse.
Quaternary SectorMost of the jobs in this sector are also services but require more education and expertise than tertiary jobs. Included are Information Technology professionals, stockbrokers, and product developers.
Quinary Sector

Within this sector, government officials, top executives at large corporations, and research scientists are typically found, as well as the police, the military, and even non-profit organisations or charities.

Classifying these sectors is part of the process of economic sector classification. The five economic sectors divide up all economic activity based on the type of work performed and the goods and services produced. The number of sectors grew as new types of work developed, and economists defined new sectors. For this reason, you still find many websites and books that only divide economic activity into the first three sectors and do not mention the more recently developed quaternary or quinary sectors. Overall, as places become more economically developed, they move away from primary sector employment to jobs done higher "up the chain". Primary sector jobs are some of the earliest ever done by people, while most quaternary and quinary sector jobs came into existence relatively recently.

Economic Sectors Examples

There are many different examples of the work included in each of the economic sectors. Let's explore this further.

The Primary Sector

Examples of the primary sector include economic activities that involve extracting or producing raw materials directly from the earth. Food production work such as farming, fishing, and ranching are included in the primary sector. Other industries include mining, quarrying, drilling for resources, forestry, harvesting, and hunting.

In general, goods produced in the primary sector are less valuable than manufactured goods (produced in other sectors, but we'll talk about this later). Countries with many people working in the primary sector tend to be the least economically developed. There are some exceptions, though. Countries, where significant amounts of petroleum (oil) and natural gas are extracted, may have a high level of economic development because of the importance of these two primary goods as energy sources, yet still have a primary sector-based economy. Similarly, precious gems, such as diamonds and emeralds, are quite valuable because of their scarcity and demand for them.

Economic Sectors person digging up sulphur StudySmarterFig. 1 - sulphur mining is a form of work in the primary sector.

The Secondary Sector

Secondary sector jobs increased rapidly after the Industrial Revolution. Secondary sector activities are those that involve manufacturing and construction. Factory work that involves the production of goods, such as automobiles, furniture, cloth, and steel, would all be examples of secondary sector activities. Construction is also included; this is essentially the manufacturing of buildings and other structures. Some secondary sector activities produce items used by others also in the secondary sector. For example, steel made in steel mills is then sent to a factory to be used in the production of aeroplanes.

Secondary sector goods vary widely in value, and countries often begin manufacturing simpler, less valuable items before they begin to develop economically. Often the clothing and textile industries first appear in a country before more complex ones, such as automobile or electronics production. A great example of this is Japan, which started off with the textile industry and then moved on to car production.

The Tertiary Sector

Many of the service jobs that are in abundance in economically developed countries are examples of tertiary sector economic activity. Most people you interact with every day are employed in the tertiary sector. Bus drivers, restaurant workers, salespeople, and pharmacists all work in the tertiary sector. We'll go into more detail about the tertiary sector later on.

The Quaternary Sector

The quaternary sector was defined more recently as new types of jobs became increasingly based on the knowledge people can provide to others. For quaternary sector economic activities, the specialised knowledge of the worker is the product. For the most part, these are jobs that seem similar to tertiary sector jobs, so differentiating between the two sectors can be difficult. Someone working in a shoe store clearly has knowledge about the shoes being sold, but this knowledge isn't what is actually being sold. This person works in the tertiary sector. On the other hand, a person who helped to design the shoe is mainly providing their knowledge and performing work in the quaternary sector. Jobs in fields such as IT programming, consulting and financial services are also examples of quaternary sector economic activities. Most jobs in the quaternary sector require high levels of formal education at universities and graduate schools. The quaternary sector grows in economically developed countries where access to these educational institutions is readily available.

The Quinary Sector

The quinary sector is a further advancement of the tertiary sector or a further breakdown of the quaternary sector. Theorists say this sector is dedicated to the highest level of certain services or parts of the knowledge economy, such as the government, universities, and healthcare. These are also typically the services that are non-profit, meaning they aren't existing to make money but instead are there to serve the public good, such as the military, police, fire departments etc. This sector can also include non-profit organisations, like NGOs or other smaller-scale charities. Other activities included in the quinary sector are things like childcare, nursing homes or housekeeping.

Tertiary Economic Sector

Employment in the tertiary sector tends to grow after countries have industrialised and experienced more economic development. Service jobs replace jobs in the secondary sector as places experience deindustrialisation or jobs in factories move to other countries. Some jobs in services do not require much formal education, but most do require people to be more literate and have a wider range of skills than in the secondary sector. As countries introduce universal education, the growth of service jobs tends to follow.

Deindustrialisation is when industrial activity goes down.

The percentage of people working in service jobs grew rapidly during the twentieth century, especially in more economically developed countries that had industrialised the earliest. As a country develops further, the tertiary sector will typically grow whilst the primary sector reduces. Most people you know will work in the tertiary sector; whether you've gone to get your hair cut or you're undergoing a medical procedure, you're being served by the tertiary sector.

The tertiary sector can be both profit and non-profit. Profitable services include those which are paid for by a consumer, such as financial services, hotels, haircuts etc. Non-profit services include things like public education provided by the state (not private education). In 2020, the service sector contributed a huge 65.73% to the global Gross Domestic Product (GDP).1

Economic Sectors employment by economic sector in the US graph StudySmarterFig. 2 - in the US, between 1840 and 2015, agriculture and manufacturing contribute significantly less to the employment statistics than the service sector. This sector has rapidly increased since 1840.

Five Economic Sectors

So, time for a memory refresh! Economic sectors are parts of the global economy where different types of work are undertaken. There are five main economic sectors.

  • Primary Sector - raw materials.
  • Secondary Sector - manufacturing.
  • Tertiary Sector - services.
  • Quaternary Sector - knowledge.
  • Quinary Sector - an extension of the tertiary/quaternary sector.

Typically, more developed countries have less economic activity (people employed) in primary or secondary sectors. Take a look at the model below. It shows that over time (and we can assume as a country develops), primary activities go down, whilst tertiary activities go up. When deindustrialisation hits, secondary activities reduce too. Quaternary sectors begin to develop later in time.

Economic Sectors clark sector model StudySmarterFig. 3 - a model showing the changing economic sectors over time

Economic Sectors - Key takeaways

  • Economic sectors are parts of the economy where different jobs take place.
  • There are 5 main sectors of the economy, categorised by the economic sector classification.
  • The 5 sectors are: primary, secondary, tertiary, quaternary, and quinary,
  • Primary activities are typically found in less developed countries or those which export valuable products like oil.
  • As a country develops, it's typically seen that primary and secondary sectors go down, whilst tertiary and eventually quaternary sectors increase.
  • The tertiary industry is the largest sector worldwide, accruing the highest global GDP in 2020.


References

  1. Aaron O'Neill, Share of economic sectors in the global gross domestic product from 2011 to 2021. Statista. 2022.
  2. Fig. 1: sulphur mining (https://commons.wikimedia.org/wiki/File:Sulphur_Mining_at_Kawah_Ijen_3.jpg), by Aditya Suseno, Licensed by CC0 (https://creativecommons.org/publicdomain/zero/1.0/deed.en).
  3. Fig. 2: graph of employment by economic sector in the US (https://ourworldindata.org/grapher/employment-by-economic-sector), by Our World in Data (https://ourworldindata.org/), Licensed by CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/deed.en_US).

Frequently Asked Questions about Economic Sectors

An economic sector is a part of the economy where certain business activities occur.

An example of a sector can be the primary sector. In this sector, work is centred around extracting raw materials or agricultural activities. 

All sectors are important for the economy they are supporting, e.g. the primary economy is important for developing countries. 

The primary sector is where agriculture or raw material extraction takes place. The secondary sector is where raw materials are turned into manufactured items.

The tertiary sector is the service sector. This can be anything from bus drivers to nurses.

Final Economic Sectors Quiz

Economic Sectors Quiz - Teste dein Wissen

Question

The mining of coal is an example of work from which economic sector? 

Show answer

Answer

Primary Sector 

Show question

Question

A team designing a new model of car is an example of work from which economic sector? 

Show answer

Answer

Quaternary Sector.

Show question

Question

Building a table is an example of work from which economic sector? 

Show answer

Answer

Secondary Sector.

Show question

Question

Which economic sector is most associated with manufacturing? 

Show answer

Answer

Secondary sector.

Show question

Question

As places develop economically, employment in which sector tends to rapidly decrease?

Show answer

Answer

Primary Sector.

Show question

Question

The primary sector is concerned with: 

Show answer

Answer

Collection of natural/raw resources.

Show question

Question

Which of the following are considered natural resources? Select ALL that apply. 

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Answer

Water.

Show question

Question

True or False: Farming is not part of the primary sector because it is not a natural activity.

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Answer

False.

Show question

Question

Which of the following activities are part of the primary sector? Select ALL that apply. 

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Answer

Logging. 

Show question

Question

What is the relationship between the primary sector and the secondary sector?

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Answer

The primary sector provides raw resources for the secondary sector to process.

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Question

The primary sector is most prominent in which stage of socioeconomic development? 

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Answer

Least developed.

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Question

How might industrialisation affect primary sector activity?

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Answer

In order to support secondary sector manufacturing, industrialising countries are likely to expand the scope and scale of the primary sector. 

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Question

True or False: Countries without widespread access to economically desirable natural resources can never industrialise because they cannot expand their primary sector. 

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Answer

False.

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Question

True or False: Singapore was able to industrialise because it had a significant homegrown primary sector. 

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Answer

False. 

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Question

How does Belgium acquire most of its natural resources?

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Answer

Import.

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Question

The secondary sector revolves around: 

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Answer

Manufacturing and construction.

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Question

Which of the following activities are part of the secondary sector?

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Answer

Assembling a smartphone in a factory.

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Question

How does the secondary sector relate to the primary sector?

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Answer

The primary sector provides the raw goods needed for secondary sector activity to take place.

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Question

True or False: The secondary sector is actually synonymous with the tertiary sector; it just depends on what economic model you're using. 

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Answer

False! The tertiary sector involves using the items created in the secondary sector. 

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Question

Which of the following activities are part of the secondary sector?

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Answer

Constructing steel screws. 

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Question

True or False: Countries that are industrialising are likely to expand their secondary sector. 

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Answer

True.

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Question

Which of the following socioeconomic categories is most closely correlated with the secondary sector?

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Answer

Developing.

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Question

The secondary sector can also be called:

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Answer

The manufacturing sector.

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Question

Why might a business move its secondary sector activity overseas? Why might a developing country welcome a foreign business?

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Answer

Businesses may move secondary sector activity overseas to take advantage of cheaper labour and resources. Countries might welcome this as the jobs can create new sources of income. 

Show question

Question

Which of the following is an example of a secondary sector activity in the context of the world system?

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Answer

Trading manufactured products internationally.

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Question

Which of the following activities is part of the tertiary sector? 

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Answer

Selling a video game to a customer at a retail store.

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Question

Which of the following activities is part of the tertiary sector? 

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Answer

Purchasing a box of copy paper from your local department store. 

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Question

The tertiary sector is the sector of the economy associated with: 

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Answer

Retail and service.

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Question

The tertiary sector is MOST associated with what level of economic development? 

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Answer

Developed.

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Question

Which of the following businesses are part of the service sector? Select all that apply.

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Answer

Banking. 

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Question

True or False: Countries can only access the tertiary sector of the economy after they are 'fully developed.'

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Answer

False.

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Question

Which of the following would be the MOST likely to bypass the secondary sector when investing in the tertiary sector? 

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Answer

An island country with high potential for tourism.

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Question

True or False: Because waste disposal is a 'blue-collar job,' it cannot be part of the tertiary sector.

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Answer

False. Waste disposal is a service, so it is part of the tertiary sector. 

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Question

True or False: Tertiary sector activity can have a negative effect on the environment due to consumer waste and transportation emissions.

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Answer

True.

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Question

True or False: Some developed countries depend on tertiary sector activity to keep public services functioninig.

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Answer

True.

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Question

What is the Quaternary sector and its role in the economy?

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Answer

The Quaternary sector is an economic sector focused on knowledge-based activities and services, such as research and development, information technology, education, and consulting. It drives innovation, growth, and competitiveness in modern economies.

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Question

What are the main industries within the Quaternary sector of the economy?

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Answer

Main industries within the Quaternary sector include research and development, information technology, education, consultancy services, scientific research, medical services, and creative industries.

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Question

How does the Quaternary sector compare to other economic sectors?

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Answer

The Quaternary sector focuses on knowledge-based services and activities, with a workforce of highly skilled professionals. In contrast, primary and secondary sectors focus on raw materials extraction and processing, while the tertiary sector is centered on providing services.

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Question

What are some prominent job types in the Quaternary sector?

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Answer

Researchers and scientists, IT specialists, educators and trainers, consultants and advisors, data analysts and statisticians, medical and healthcare professionals, creators and innovators in the creative industries.

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Question

What are some essential skills and qualifications needed for Quaternary sector careers?

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Answer

Formal education in relevant fields, specialised domain skills, strong analytical abilities, excellent communication skills, adaptability, professional certifications, and creativity and innovation.

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Question

What is the significance of continuous learning in the Quaternary sector?

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Answer

Continuous learning is essential to staying up-to-date with technological advancements, industry trends, and scientific discoveries, thus contributing to professional growth and career success in the Quaternary sector.

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Question

What are some examples of companies in the Quaternary sector across various industries?

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Answer

Information Technology: Google and Apple; Education: Harvard and Oxford; Research Institutions: CERN and NASA; Healthcare: Pfizer and AstraZeneca; Consulting: McKinsey & Company and Boston Consulting Group; Financial Services: Bloomberg and Moody's Analytics; Creative and Cultural Industries: Netflix and Spotify.

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Question

What is one of the main benefits of a strong quaternary sector?

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Answer

Job creation, particularly for highly skilled and educated professionals, leading to increased employment and reduced unemployment rates.

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Question

Which potential disadvantage entails a widening income gap due to the high salaries in the quaternary sector?

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Answer

Inequality, as high-skilled workers in the quaternary sector often earn more than those in other sectors, leading to increased economic and social inequality.

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Question

What challenge is posed by the rise of automation, artificial intelligence, and other advanced technologies in the quaternary sector?

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Answer

Job displacement, where lower-skilled workers face unemployment and upheavals in the labour market due to advanced technologies taking over their roles.

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Question

What is an essential first step towards pursuing a career in the Quaternary sector?

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Answer

Earning an undergraduate degree, such as a Bachelor's, in a relevant field of study.

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Question

Which of the following can enhance career prospects in the Quaternary sector?

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Answer

Obtaining professional certifications recognised within a specific industry.

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Question

What is an essential trait for a successful career in the dynamic quaternary sector?

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Answer

Embracing lifelong learning and adapting to changing market requirements.

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Question

What is the main goal of the Least Cost Theory?

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Answer

To explain the optimal location of industries to minimize their inputs such as transport, labour, and agglomeration costs.

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Question

What are the three primary components of the Least Cost Theory model?

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Answer

Transportation, Labour, and Agglomeration.

Show question

Test your knowledge with multiple choice flashcards

The mining of coal is an example of work from which economic sector? 

A team designing a new model of car is an example of work from which economic sector? 

Building a table is an example of work from which economic sector? 

Next

Flashcards in Economic Sectors60

Start learning

The mining of coal is an example of work from which economic sector? 

Primary Sector 

A team designing a new model of car is an example of work from which economic sector? 

Quaternary Sector.

Building a table is an example of work from which economic sector? 

Secondary Sector.

Which economic sector is most associated with manufacturing? 

Secondary sector.

As places develop economically, employment in which sector tends to rapidly decrease?

Primary Sector.

The primary sector is concerned with: 

Collection of natural/raw resources.

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