Which of the following activities constitute real sector in the economy? 1. Farmers harvesting their crops.…
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:
1 and 2 only
2, 3 and 4 only
1, 3 and 4 only
1, 2, 3 and 4
Solution
Real sector consists of activities producing actual goods and services (agriculture, manufacturing). Financial sector activities like bank lending or bond issuance belong to the financial sector. Only 1 and 2 are real sector activities.