Which of the following activities constitute a real sector in the economy? 1. Farmers harvesting their crops 2. Textile mills converting raw cotton into fabrics 3. A commercial bank lending money to a trading company 4. A corporate body issuing Rupee Denominated Bonds overseas. Select the correct answer using the code given below.

Question

YESPYQ · Accepted Answer

Correct answer: 1 and 2 only. The real sector refers to the segment of the economy that is involved in the production and consumption of tangible goods and services. It includes industries such as agriculture, manufacturing, construction, mining, and services like health- care, education, and transportation. Statements 1 and 2 are correct :  Farmers harvesting their crops : This is a primary sector activity directly contributing to the production of goods (agricultural produce).  Textile mills converting raw cotton into fabrics : This is a manufacturing activity, part of the secondary sector, which also belongs to the real sector. Statements 3 and 4 are incorrect :  A commercial bank lending money to a trading company: This is a financial sector activity, involving monetary transactions rather than the production of tangible goods or services. UPSC GS Paper-I PYQs 320  A corporate body issuing Rupee Denominated Bonds overseas : This relates to the financial sector and capital markets, as it involves raising funds rather than producing goods or services. 305

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