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    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.

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