Economics · Development Economics
What is the central mechanism of structural transformation in the Lewis Model of economic development?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Foreign direct investment creating manufacturing jobs and absorbing unemployed rural workers
- 2Technological progress in agriculture releasing workers who migrate to cities
- 3Surplus labour transferred from low-productivity agriculture to modern industry, generating profits that are reinvested to expand the capitalist sector✓
- 4Government-led industrialisation through five-year planning
Correct answer
Surplus labour transferred from low-productivity agriculture to modern industry, generating profits that are reinvested to expand the capitalist sector
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