Question
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
Explanation
The real sector covers agents directly producing goods and non-financial services — so farmers harvesting crops and mills turning cotton into fabric both qualify. A bank lending money and a company issuing overseas bonds are both financial-sector activities (movement of monetary claims, not production of real goods), so only options 1 and 2 belong to the real sector.