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:

The real sector comprises activities that produce tangible goods and services, such as agriculture (Statement 1) and manufacturing (Statement 2), which directly contribute to the economy's physical output. Statements 3 and 4 are incorrect because they involve financial intermediation and debt instruments, which constitute the financial sector rather than the real sector. The core concept being tested is the fundamental distinction between the **Real Sector** (production-based) and the **Financial Sector** (monetary and credit-based) of an economy.