UPSC Prelims 2022 · Question 7 of 98
UPSC Prelims 2022 question on Real Sector Activities
- ExamUPSC CSE
- Year2022
- PaperGeneral Studies Paper I
- SubjectIndian Economy
- TopicImportant Economic Concepts
- DifficultyMedium
- TypeStatement
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:
Show answer
Answer: A. 1 and 2 only
Verdict
Correct statements: 1 and 2 → Option (a).
Analysis
The real sector of an economy is the key section as its activities persuade economic output and is represented by economic segments essential for the progress of GDP.
Statement by statement
Statement 1 – CORRECT: Farmers harvesting their crops is a real sector activity — it directly contributes to economic output and GDP.
Statement 2 – CORRECT: Textile mills converting raw cotton into fabrics is a real sector activity — it involves physical production and contributes to GDP.
Statement 3 – INCORRECT: A commercial bank lending money to a trading company constitutes a financial sector activity, not real sector.
Statement 4 – INCORRECT: A corporate body issuing Rupee Denominated Bonds overseas is a financial sector activity.