Why is the service industry important in the modern economy?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. It plays a key role in the provision of activities that aid economic development.
The service industry is vital in the modern economy because it provides essential supporting activities such as banking, education, healthcare, transportation, information technology, and communication. These services help other sectors—like agriculture and manufacturing—function efficiently and grow. Instead of producing goods, the service industry enhances productivity, improves living standards, and generates employment. It also contributes significantly to GDP and encourages innovation and globalisation. Thus, its importance lies in aiding overall economic development, not in producing raw materials or goods.