Final answer:
The term 'service sector' refers to the part of the economy where organizations and individuals primarily provide services, such as tourism, which can bring national wealth despite not producing physical goods.
Step-by-step explanation:
The term service sector refers to organizations and individuals involved in delivering service as a primary product. This sector is also referred to as the tertiary and quaternary sectors of the economy. Organizations in the service sector, sometimes referred to as businesses or firms, are integral components of the Circular Flow Model, which outlines the production of goods and services in the economy. These businesses demand resources, such as labor, from households in the Resource Market and sell goods and services in the Product Market. The production process in these businesses involves making decisions that define the behavior of firms and includes a host of activities such as transportation, distribution, wholesale, and retail sales, each creating value in the economy.
Further illustrating the concept, in the U.S. economy, most individuals perform specialized tasks to earn money, which they then use to trade for goods and services provided by others with different specialties, exemplifying a system of organic solidarity. For instance, even though activities like tourism do not produce physical products, they are a part of the service sector and can bring in national wealth, especially when tourists come from outside the country.