In 1988 services moved ahead of manufacturing as the main product of the United States economy. But what is meant by "services"? Some economists define a service as something that is produced and consumed simultaneously, for example, a haircut. The broader, classical definition is that a service is an intangible something that cannot be touched or stored. Yet electric utilities can store energy, and computer programmers save information electronically. Thus, the classical definition is hard to sustain.

The United States government's definition is more practical: services are the residual category that includes everything that is not agriculture or industry. Under this definition, services includes activities as diverse as engineering and driving a bus. However, besides lacking a strong conceptual framework, this definition fails to recognize the distinction between service industries and service occupations. It categorizes workers based on their company's final product rather than on the actual work the employees perform. Thus, the many service workers employed by manufacturers—bookkeepers or janitors, for example—would fall under the industrial rather than the services category. Such ambiguities reveal the arbitrariness of this definition and suggest that, although practical for government purposes, it does not accurately reflect the composition of the current United States economy.

The author of the passage mentions which of the following as one disadvantage of the United States government's definition of services?

It is less useful than the other definitions mentioned in the passage.

It is narrower in scope than the other definitions mentioned in the passage.

It is based on the final product produced rather than on the type of work performed.

It does not recognize the diversity of occupations within the service industries.

It misclassifies many workers who are employed in service industries.


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