UPSC Prelims 2022 · GS Paper I
Question 7: Economy and Social Development
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 :
AnswerUPSC’s answer is (a).
The real sector covers activities that produce goods and services: agriculture, mining, manufacturing and the like. Harvesting crops and mills turning cotton into fabric are production. A bank lending to a trader and a company issuing rupee-denominated bonds overseas are financial-sector activities, since they move money and claims rather than make output. So only 1 and 2 belong to the real sector.
- 1. Harvesting is primary production of goods.
- 2. Converting cotton into fabric is manufacturing.
- 3. Bank lending is a financial-sector activity.
- 4. Issuing bonds abroad is a financial-market transaction.
How you could have got this
- If you were sure statement 3 is not correct, (b), (c) and (d) go: each of them includes 3.
What you needed to know: Bank lending is a financial-sector activity.
Only (a) is left. You didn’t need statements 1, 2 or 4.
Which options go is worked out from UPSC’s key and the options, not by a model.
Why each option is right or wrong
- (a) Correct. Farming and textile manufacturing are real-sector production.
- (b) Wrong. Bank lending and bond issue are financial-sector activities.
- (c) Wrong. Statements 3 and 4 are financial, and statement 2 is missing.
- (d) Wrong. Statements 3 and 4 do not produce goods or services.
Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2022, General Studies Paper I, Series A. The paper on upsc.gov.in.