New IRDAI 2024 Notification Out - 2 Lac+ Salary - Enroll Now!!

    Register

    Question

    In the Lewis model, what will cause an expansion in modern sector employment?

    A A reinvestment of profits by capitalists that allows production to expand Correct Answer Incorrect Answer
    B Interventions by the State to expand employment Correct Answer Incorrect Answer
    C An increase in technology Correct Answer Incorrect Answer
    D An increase in the surplus labor Correct Answer Incorrect Answer

    Solution

    Lewis's model explains the growth of a developing economy in terms of a labour transition between two sectors, the capitalist sector and the subsistence sector. Reinvestment of profits by capitalist will cause expansion in modern sector employment as it allows production to expand.

    Practice Next