Question

The act of converting raw material into finished products is called _____.
A)Production
B)Manufacturing
C)Service
D)None of these

Answer 1

Hint: Economy of a country is divided into three sectors. Primary sector involves agriculture , fishing while the secondary sector involves producing finished goods. The third sector is the tertiary sector which is concerned with providing services.

Complete answer: The three sectors of the economy contribute differently to our Gross Domestic Product.
Let us look at the options given to us-
Option A - Production is the process through which various material and immaterial inputs are combined to make something consumable. Production could involve an output that is either a good or a service. Production usually involves making something at large scale.
Option B - Manufacturing is the process of converting raw material into finished products. Through manufacturing, natural products are changed into merchandise that can be sold in the market. Industrial processes are used in manufacturing. This adds value to raw material.
Production and manufacturing are different as production involves tangible and intangible outputs, while manufacturing is only concerned with tangible outputs.
Option C - Service sector is involved in supporting the other two sectors. They are not directly involved in manufacturing or exploiting raw materials but provide services like banking, transport etc that help the other two sectors.

Therefore the correct option is option B.

Note: In India the Agriculture contributes around 15% to the Gross Domestic Product (GDP). Industrial sector contributes around 25% to the GDP and the service sector contributes around 50% to the GDP.