What is sectoral composition of an economy? Is it necessary that the service sector should contribute maximum to GDP of an economy? Comment.
What is sectoral composition of an economy? Is it necessary that the service sector should contribute maximum to GDP of an economy? Comment.
The sectoral composition of an economy is the proportionate contribution of different sectors to the Gross Domestic Product (GDP) of an economy during a year. It gives the share of agricultural sector, industrial sector and service sector in GDP. It is necessary that at the later stages of development, the service sector should contribute the maximum to the total GDP.
There exists a phenomenon called structural transformation which implies that as a country develops, gradually the country's dependence on the agricultural sector will shift from the maximum to minimum and at the same time, the share of industrial and service sector in the total GDP will increase. In more developed countries, the share of the service sector is the maximum.
Therefore, to ensure that a country is economically developed, the share of service sector should be the maximum.
The sectoral composition of an economy is the proportionate contribution of different sectors to the Gross Domestic Product (GDP) of an economy during a year. It gives the share of agricultural sector, industrial sector and service sector in GDP. It is necessary that at the later stages of development, the service sector should contribute the maximum to the total GDP.
There exists a phenomenon called structural transformation which implies that as a country develops, gradually the country's dependence on the agricultural sector will shift from the maximum to minimum and at the same time, the share of industrial and service sector in the total GDP will increase. In more developed countries, the share of the service sector is the maximum.
Therefore, to ensure that a country is economically developed, the share of service sector should be the maximum.
