The Services Sector Has Been Steadily Rising in Relative Importance

question 22

Essay

The Services sector has been steadily rising in relative importance in GDP of the United States, as well as elsewhere around the world. Since "services" have been identified as "non-tradables" (e.g., it is difficult to export haircuts), it may be argued that this trend will likely slow the rapid growth in international trade. Discuss.

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Definitions:

Conversion Costs

The total cost of converting raw materials into finished goods, including both direct labor and manufacturing overhead.

Work in Process

Inventory that is in the production process and is not yet completed.

Equivalent Units

Equivalent units are a concept used in cost accounting to express the amount of work done on partially finished goods in terms of fully completed units.

Bottling Department

A segment of a manufacturing facility where products, typically liquids, are placed into bottles for distribution.