Q7.
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:
Answer
A
Explanation
The real sector of an economy comprises activities that persuade economic output and progress of GDP — such as farmers harvesting crops or textile mills converting raw cotton into fabrics. A commercial bank lending money and a corporate body issuing bonds overseas are financial sector activities, not real sector activities. The financial sector generates revenue from loans, mortgages, and financial instruments.