Which of the following statements best describes the growth trend of service businesses compared to goods-producing businesses in modern economies?

• A. Service businesses are generally growing faster than goods-producing businesses.
• B. Goods-producing businesses are growing faster than service businesses.
• C. Both service and goods-producing businesses are growing at the same rate.
• D. Neither service nor goods-producing businesses are experiencing growth.

Answer: (A)

Verified step by step guidance

1. Understand the distinction between service businesses and goods-producing businesses: Service businesses provide intangible products such as healthcare, education, and financial services, while goods-producing businesses manufacture tangible products like cars, electronics, and clothing.
2. Recognize the general trend in modern economies, especially developed ones, where there is a shift from manufacturing-based industries to service-based industries due to technological advancements, globalization, and changes in consumer preferences.
3. Analyze economic data and studies that show employment and output growth rates, which typically indicate that service sectors are expanding more rapidly than goods-producing sectors.
4. Consider factors such as automation and outsourcing that have reduced growth or even caused decline in some goods-producing industries, while service industries often require human interaction and customization, supporting their faster growth.
5. Conclude that the statement 'Service businesses are generally growing faster than goods-producing businesses' best describes the growth trend in modern economies.