Economics · Economic Growth and Development
Which of the following statements hold true for the Arthur Lewis model of economic development with unlimited supplies of labour? (A) There is an unlimited supply of labour available at a subsistence wage. (B) The marginal productivity of labour in the subsistence sector is equal to, or less than, the subsistence wage. (C) It features a dual economy composed of a modern capitalist sector and a traditional subsistence sector. (D) The agricultural sector is characterized by continuously increasing returns to scale. (E) The model explains the crucial role of capitalist surplus reinvestment in the development process. Choose the correct answer from the options given below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1(A), (C), (D), and (E) only
- 2(B), (C), (D), and (E) only
- 3(A), (B), (C), and (E) only✓
- 4(C), (D), and (E) only
Correct answer
(A), (B), (C), and (E) only
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