Explain how the 3 sectors of the economy are dependant on each other? |
The three sectors of economy are interdependent upon each other in the following ways:
- The primary sector provides the base for all economic activities as it involves production at the most basic level, i.e. through exploitation of natural resources. This includes agriculture, horticulture, fisheries, forestry, mining, etc.
- The goods that are produced are converted into processed forms through manufacturing. It is the secondary sector of the economy. This sector depends upon primary sector for raw materials and in turn, provides a market for the producers of primary sector.
- The tertiary or service sector provides support to the process of production. It includes transportation, storage, marketing and sale of products. Other services include communication and banking. These sectors are necessary to aid production while themselves deriving their sustenance from it.
Thus, it can be concluded that all three sectors of the economy are interdependent upon each other.