In the 1970s and 1980s most of the developed world transitioned from a primarily industrial economy to a service-based economy. This had many benefits for the people of the developed world, such as higher wages and safer working conditions, but also brought with it many difficulties. The demand for unspecialized and factory-based labor declined rapidly and dramatically, as those jobs were transitioned overseas. Many workers were too old, or too deprived of any higher education, to transition smoothly into a new working environment, and unemployment and social unrest were rife throughout the developed world as a result.

During the past half-century much of the developed world has experienced a process known as deindustrialization -factories and manufacturing centers have closed down in the United States of America, Western Europe, and Japan and those jobs have been outsourced to the developing world. This has led to the rise of “service-based economies” in the developed world. A “service-based economy” is an economy in which most of the workers are involved in providing services such as research, marketing, telecommunications, innovation, teaching, and so on.

The Core-Periphery Model is used by geographers to describe the division of the world into three segments. The “core,” places like most of Europe and North America, where standards of living are high and most of the world’s products are consumed; the “semi-periphery,” where most manufacturing centers are and where standards of living are extremely variable; and the “periphery,” where most raw resources are harvested and people are extremely poor.

In the poorest parts of the world the vast majority of the population is engaged in primary economic activities like farming, fishing, hunting, and mining. Although there might be some elements of secondary and tertiary economic activities in these countries, the bulk of secondary economic activities are undertaken by countries in the semi-developed world - like Mexico, China, Brazil, and regions of India.

In wealthy countries as much as three-quarters (in a few cases close to a hundred percent) of the population is engaged in tertiary and quaternary economic activities. Due to the nature of the global economy the wealthiest countries can rely on the poorest countries to provide the bulk of their primary economic activities and the semi-developed countries to provide the bulk of their secondary economic activities.

Countries in the “semi-periphery” are countries that have a standard of living lower than those in the “core,” but much higher than those in the “periphery.” They are almost exclusively centers of manufacturing and exporting. Of these countries, only Vietnam does not qualify as a country in the “semi-periphery.” It is considered to be in the “periphery” due to its low standard of living.

The “back-wash effect” refers to a phenomenon that has been observed on numerous occasions during the process of deindustrialization. It states that as one region of a state flourishes economically it does not necessarily improve the economy of another region, but instead, conversely, diminishes the significance and strength of another region. A classic example of this that is mentioned often is the “Rust Belt” experience of the Midwest.

The “fast world,” as distinct from the “slow world,” is defined by high-level telecommunication and transportation technology. Although the other answer choices might be generally true of the differences between “fast world” countries and “slow world” countries they are not as close to the exact definition as the correct answer.

While India is the second most populous nation in the world, the rate of economic development is much lower compared to nations like the United States (third most populous nation), Japan (tenth most populous nation), and Australia. Nations with high population density tend to be poverty-stricken as well, due to too many people in a given area competing for resources (agricultural, financial, etc). 

Economic restructuring is a phenomenon that has accelerated in the last part of the twentieth century and into the twenty-first century. Economic restructuring is the process in which economies move from a blue-collar industrial base, especially around heavy industry and factories, into more of a white-collar service sector. This process is typical in most major American cities, which has produced a thinner middle class and more menial jobs.