Economics · Fei-Ranis Dual Economy Model
Consider the following statements regarding the Fei-Ranis Dual Economy Model: Statement 1: As an extension of the W. Arthur Lewis framework, the Fei-Ranis model posits that the pace of industrialisation depends entirely on the industrial sector itself, rendering the generation of an agricultural surplus unnecessary. Statement 2: During Phase 1 (Disguised Unemployment) of the model, the marginal product of agricultural labour is strictly greater than zero, meaning that transferring workers to industry immediately reduces agricultural output and triggers food inflation. Which of the following options is correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Statement 1 is false, but Statement 2 is true.
- 2Statement 1 is true, but Statement 2 is false.
- 3Both statements are false.✓
- 4Both statements are true.
Correct answer
Both statements are false.
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