Which statement correctly describes basic and nonbasic sectors in urban economics?

Which statement correctly describes basic and nonbasic sectors in urban economics?

• A. Basic sectors export goods/services outside the city.
• B. Nonbasic sectors serve local residents.
• C. Sectors are unrelated to urban growth.
• D. Nonbasic sectors export goods.

Answer: (A)

In urban economics, basic sectors are the parts of the economy that export goods and services outside the city, bringing income in from outside. This external demand is what fuels urban growth, as money earned from outside circulates through the local economy and supports more jobs and investment (the multiplier effect). Nonbasic sectors, by contrast, mainly serve local residents and businesses rather than attracting outside income. The statement that basic sectors export goods and services outside the city best captures this defining role. It directly describes why they drive growth: they bring new money into the city from beyond its borders. The other options either describe nonbasic sectors in isolation, suggest sectors are unrelated to growth, or misstate where nonbasic sectors operate (local vs export), so they don’t capture the core distinction as cleanly. For example, while nonbasic sectors do serve local consumers, that alone doesn’t define the basic/nonbasic relationship or the growth impact.

In urban economics, basic sectors are the parts of the economy that export goods and services outside the city, bringing income in from outside. This external demand is what fuels urban growth, as money earned from outside circulates through the local economy and supports more jobs and investment (the multiplier effect). Nonbasic sectors, by contrast, mainly serve local residents and businesses rather than attracting outside income.

The statement that basic sectors export goods and services outside the city best captures this defining role. It directly describes why they drive growth: they bring new money into the city from beyond its borders. The other options either describe nonbasic sectors in isolation, suggest sectors are unrelated to growth, or misstate where nonbasic sectors operate (local vs export), so they don’t capture the core distinction as cleanly. For example, while nonbasic sectors do serve local consumers, that alone doesn’t define the basic/nonbasic relationship or the growth impact.