Which of the following activities constitute 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:

(a) 1 and 2 only

(b) 2, 3 and 4 only

(d) 1, 2, 3 and 4

APEDIA

UPSC Prelims

2022 • 05 Jun, 2022 • Paper-1

Which of the following activities constitute 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:

Correct Answer

(a) 1 and 2 only

Conceptual Definition: The economy is broadly divided into the 'real sector' (where actual goods and non-financial services are produced) and the 'financial sec......

💡 Analysis & Explanation

Conceptual Definition ▼

The economy is broadly divided into the 'real sector' (where actual goods and non-financial services are produced) and the 'financial sector' (which deals with monetary flows and financial instruments).

Activity Analysis ▼

Harvesting crops (1) and manufacturing textiles (2) directly involve the production of tangible goods, thereby forming the core of the real sector.

Financial Sector Mapping ▼

Bank lending (3) and issuing offshore bonds (4) deal purely with capital allocation and debt instruments. These form part of the financial sector, not the real sector.

Conclusion ▼

Only activities 1 and 2 fall under the real sector.

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