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Eduncle posted an MCQ
October 20, 2019 • 16:48 pm 0 points
  • UGC NET
  • Economics

According to Fisher-Clark thesis which one of the following is the correct sequence of structural shift in the process of development ?

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    Eduncle Best Answer

    Fisher & Clark proposed that every economy will go through 3 stages of production
    1. First stage is agriculture. Related to the activities of extracting raw materials through mining, forestry, fishing & agriculture. This is the main economic activity for low-income countries
    2. Second stage is industrial. Related to construction & manufacturing sectors. This is the main economy of middle-income countries. As economies develop, income will rise. Since agriculture goods have low YED, demand for them will increase but at less than proportionate of income. Compared to manufacturing goods, relatively it has higher YED. Therefore as income increases, demand for it will also increase at a higher rate. This will lead to rapid industrialisation, thus the shrinking size of agriculture sector
    3. Third stage is services. Related to provision of services such as education, health, international travel, banking etc. This is the core economic activity of high-income countries. Logically, as people feel even much richer, they will now demand for more services e.g. giving their child good education, greater concern for health & travelling internationally. Tertiary sector has very high YED (could be more than 1)

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