Which term describes an economy focused on services and knowledge-based tasks?

• A. Knowledge based economy
• B. Service based work
• C. Industrial Economy
• D. Agricultural Economy

Answer: (A)

The main idea tested is how modern economies grow by relying on knowledge and services rather than just physical goods. A knowledge-based economy is defined by its emphasis on information, expertise, innovation, and skilled labor, with growth driven by activities like software development, finance, research and development, education, healthcare, and other knowledge-intensive services. This makes it different from an agricultural economy, which centers on farming and raw materials, and from an industrial economy, which focuses on manufacturing and heavy production. A term describing a shift toward valuing ideas, information, and professional services best captures this transformation, where the driving force is the creation and application of knowledge rather than just physical goods.