Which of the following activities constitute a real sector in the economy?
1. Farmers harvesting their crops
2

Question

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:

Accepted Answer

The real sector of an economy pertains to the production of goods and services. Activities like farming and manufacturing directly contribute to the creation or transformation of tangible output. Financial sector activities, such as lending by banks or issuing bonds, facilitate the flow of money and credit but do not directly produce goods or services themselves. Therefore, only activities involving the physical production of goods are considered part of the real sector.