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Business Studies IGCSEPDF 36
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Reasons for changes in the relative importance of the three sectors over time:
1. When sources of some primary products become depleted
2. Developed economies are losing competitiveness to newly industrialised
countries
3. Due to rise in living standards, consumers spend more of their income on
services such as travel and restaurants
A mixed economy has both private and public (state) sectors.
Private Sector: Businesses not owned by the government; main aim is to make
profits.
Public Sector: Owned by the government; main aim is to provide service and
employment.
Privatisation: Selling a public sector business to the private sector.
Advantages of Privatisation
Competition between private sectors
results in standardised products
More efficient use of capital and labour
Costs are controllable as main aim is
profit
Disadvantages of Privatisation
Increased unemployment as main aim of
private sector is profit maximisation
Less likely to focus on social objectives
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Relative importance of economic sectors depends on a country's stage of economic
development.
Usually compared by:
1. Percentage of country’s total number of workers employed in each sector
2. Value of output goods and services and the proportion this is of total national
output