Final answer:
The movement of productive factors and resources from one sector to another, accompanied by a shift from self-sufficiency to free trade, is known as economic transition or structural change.
Step-by-step explanation:
The movement of productive factors and resources from one sector to another, accompanied by a shift from self-sufficiency to free trade, is known as economic transition or structural change. This process is often seen in nations experiencing a shift in labor, where surplus agricultural labor is absorbed into the manufacturing or service sectors.
For example, in China, as people leave rural areas and migrate to cities or manufacturing zones, the country has undergone significant economic transformation. However, economists are still debating whether China has reached the Lewis turning point, where surplus labor is fully absorbed, and wages in both agricultural and manufacturing sectors begin to rise sustainably.
This transition can have both positive and negative impacts, such as lower production costs and increased trade volumes, but also unemployment and disruptions in certain sectors. However, overall, the shift toward free trade and globalization has brought economic gains and improved the quality of life for many people.