Cambridge International as and a level Economics Ebook

Primary sector: 
industries involved in farming and 
extracting natural resources.
Secondary sector: 
industries that manufacture products.
Tertiary sector: 
industries that produce services.
Quaternary sector: 
industries involved in providing 
knowledge-based services.
KEY TERMS
Low income
US$1,035
Middle income
US$1,036 to US$4,085 (lower middle)
US$4,086 to US$12,615 (upper middle)
High income
US$12,616
Table 9.4 
Classification of economies, GNI per head, 2013
Low
incomes
Low
investment
Low
savings
Low
productivity
Low
incomes
Low
levels of
human capital
Low levels of
education
and health care
Low
economic
growth
Figure 9.10 
Poverty cycles
234
Cambridge International A Level Economics

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Developing economies typically have a high dependence 
on the primary sector. A high dependency on agricultural 
output makes developing economies vulnerable to the 
forces of nature. In those developing economies that are 
dependent upon agricultural output for subsistence, a 
drought can swift ly lead to famine. In those developing 
economies that are dependent upon agricultural products 
for their exports, a drought can wipe out their foreign 
currency earnings.
As an economy develops, the contribution to GDP 
of the primary sector tends to decline. Th
e secondary 
sector becomes the major contributor and as the 
economy develops further, the tertiary sector usually 
makes the largest contribution to output. Resources 
also move into the secondary and tertiary sectors and 
away from the primary sector. A smaller proportion 
of the economy’s labour force is employed in the 
primary sector but, given higher labour and capital 
productivity, the total value of the sector’s output 
may increase.
Table 9.5
 compares the economic structure of some 
developed, emerging and developing economies.