UPSC CSE Prelims
Question 47
Which of the following activities constitute real sector in the economy ?
- Farmers harvesting their crops
- Textile mills converting raw cotton into fabrics
- A commercial bank lending money to a trading company
- A corporate body issuing Rupee Denominated Bonds overseas
Select the correct answer using the code given below :
View correct answer and explanation
Correct answer: A
Correct Option: A (1 and 2 only)
Explanation: The real sector concerns production of goods and non-financial services; banking credit and securities issuance are activities of the financial sector.
Statement / Pair / Item-wise Analysis:
1. True / qualifies - Harvesting crops is primary real-sector production.
2. True / qualifies - Making textiles from cotton is real-sector manufacturing.
3. False / does not qualify - A bank making a loan is financial intermediation, not real-sector output in this exam’s classification.
4. False / does not qualify - Issuing rupee-denominated bonds abroad raises finance rather than producing goods/services.
Option-wise Analysis:
A. Correct-selects exactly the correct statements/items identified above.
B. Incorrect-includes 3 even though A bank making a loan is financial intermediation, not real-sector output in this exam’s classification.; includes 4 even though Issuing rupee-denominated bonds abroad raises finance rather than producing goods/services.; omits 1 even though Harvesting crops is primary real-sector production.
C. Incorrect-includes 3 even though A bank making a loan is financial intermediation, not real-sector output in this exam’s classification.; includes 4 even though Issuing rupee-denominated bonds abroad raises finance rather than producing goods/services.; omits 2 even though Making textiles from cotton is real-sector manufacturing.
D. Incorrect-includes 3 even though A bank making a loan is financial intermediation, not real-sector output in this exam’s classification.; includes 4 even though Issuing rupee-denominated bonds abroad raises finance rather than producing goods/services.