Definition
Calculating the Value
To calculate the value of the goods and services produced, we calculate the total value of the final goods and services. This value, produced in each sector during a particular year provides us the total production of the sector for that year. Intermediate goods are used up in the production of the final product.
Why are values of intermediate goods not counted?;; Because their values are already included in the value of the final product.
GDP
The sum of production from these three sectors is called the Gross Domestic Product. Basically, it is the sum of all the goods and services produced within a country in a particular year. It shows how big the economy is.
Historical Change in the Sectors
In the earlier times, the primary sector was the most important sector. As man and civilisation and technology evolved, factories and industries started growing. To support that, transportation, communication also started evolving. And as a result, today, most of the share is held by the Tertiary sector, as it helps the other two sectors grow.
Rise of the Tertiary Sector
- In a developing country, the need of basic services such as education, hospitals, administration is needed. This is taken care of by the government.
- The development of primary and secondary sector leads to the development of the tertiary sector. (This shows that the sectors are highly interdependent.)
- As income levels rise, people start to seek services such as tourism, shopping, etc. This is more prominent in cities
- As time passes, new technologies like Information Technology, AI have become important. The production of these services are rising rapidly.
Employment
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Flashcards
What is GDP? ? The sum of production from these three sectors is called the Gross Domestic Product. Basically, it is the sum of all the goods and services produced within a country in a particular year. It shows how big the economy is.
Why did the Rise of Tertiary Sector occur? ?
- In a developing country, the need of basic services such as education, hospitals, administration is needed. This is taken care of by the government.
- The development of primary and secondary sector leads to the development of the tertiary sector. (This shows that the sectors are highly interdependent.)
- As income levels rise, people start to seek services such as tourism, shopping, etc. This is more prominent in cities
- As time passes, new technologies like Information Technology, AI have become important. The production of these services are rising rapidly.