What is meant by Four Sector Economy?

1.	What is meant by Four Sector Economy?
Answer» In a Four – sector economy, in addition to household, firms and government, a fourth sector namely, external sector is included. In real life, only four – sector economy exists. This model is composed of four sectors namely, Households Firms Government External sector In four – sector economy, expenditure for the entire economy include domestic expenditure (C + I + G) and net exports (X – M).

Answer»

In a Four – sector economy, in addition to household, firms and government, a fourth sector namely, external sector is included.
In real life, only four – sector economy exists. This model is composed of four sectors namely,
Households
Firms
Government
External sector
In four – sector economy, expenditure for the entire economy include domestic expenditure (C + I + G) and net exports (X – M).

Discussion