We have given these Business Studies Class 12 Important Questions Chapter 3 Business Environment to solve different types of questions in the exam. Go through these Business Environment Class 12 Important Questions and Answers & Previous Year Questions to score good marks in the board examination.
Important Questions of Business Environment Class 12 Business Studies Chapter 3
Question 1.
What is meant by business environment? (All India 2015)
Or
Give the meaning of the term ‘business environment’. (Comportment 2013.2012)
Answer:
‘Business environment’ is the totality of all external forces that are affecting the performance of business, viz general forces (economic, social, political, legal and technological) and specific forces (investors, customers, competitors and suppliers).
Question 2.
Define liberalisation as a process of economic reforms. (All India 2015:2011 (C); Delhi 2010)
Answer:
Liberalisation refers to an end of licence, quotas and many more restrictions and controls which were put on industries before 1991.
Question 3.
Why is it said that business environment is uncertain? (Compartment 2014)
Answer:
Business environment is uncertain as it is difficult to predict future happenings when environmental changes are taking place frequently.
Question 4.
What is included in political environment of business? State. (Delhi 2014)
Answer:
The following components are included in political environment of business:
- Constitutional framework
- Political system
- Political structure
- Government interventions in business
- Foreign policy and defence policy of the country
Question 5.
What is included in legal environment of business? State. (All India 2014)
Answer:
Legal environment includes:
- Several acts passed by the government
- Court judgements
- Statutory warnings prescribed under law
- Legislations passed by the government, e.g. essential commodities, etc
Question 6.
What is included in the technological environment of business? State. (Comportment 2014)
Answer:
Technological environment includes scientific improvements and innovations, which provide new ways of producing goods and services. It also includes new methods and techniques of operating a business.
Question 7.
Why is business environment called dynamic? State. (Comportment 2014)
Or
State how business environment is dynamic in nature. (Comportment 2012)
Answer:
Business environment is dynamic as it keeps on changing. It is not static and its components are highly flexible, e.g. technological improvements, increase in competition, etc.
Question 8.
Why is it said that ‘business environment’ is complex? (Comportment 2013)
Answer:
Business environment is complex, as to understand it in totality, e.g. it becomes difficult to know the extent of relative impact of social, economic, political, legal and technological factors on change in demand of a product.
Question 9.
What is meant by ‘globalisation’? (Comportment 2012)
Answer:
Globalisation refers to integrating our economy with the world’s economy. It is the system of interaction among countries of the world in order to develop the global economy.
Question 10.
Business environment includes both specific and general forces. List any four specific forces. (Delhi 2011)
Answer:
Specific forces of business environment are:
- Suppliers
- Investors
- Customers
- Competitors
Question 11.
Business environment includes both specific and general forces. List any four general forces. (All India 2011)
Answer:
General forces of business environment are:
- Social
- Political
- Technological
- Legal
Question 12.
The understanding of business environment helps the managers to identify threats. What is meant by ‘threats’ here? (Delhi 2011)
Answer:
Threats refer to the external environment trends and changes that will hinder a firm’s performance.
Question 13.
The understanding of business environment enables the firm to identify the opportunities. What is meant by ‘opportunities’ here? (All India 2011)
Answer:
Opportunities refer to the positive external trends or changes that will help a firm to improve its performance.
Question 14.
Define privatisation as a process of economic reforms in one sentence. (Delhi (C) 2011; All India 2010)
Answer:
Privatisation refers to giving greater role to private sector and reducing the role of public sector in the nation-building process.
Question 15.
‘Accent Electronics Ltd.’ was operating its business in Malaysia. The company started exporting its products to India when the Prime Minister announced relaxation in import duties on electronic items. The company appointed retailers in India who had direct on-line links with the suppliers to replenish stocks when needed.
Identify and explain the dimensions of business environment discussed in the above case. (Foreign 2016)
Answer:
The dimensions of business environment referred in the above case are:
(i) Political environment It is the outcome of a combination of various ideologies advocated by different political parties. Every political party has a different attitude towards business community. A live example of this can be seen during elections, when there is a fluctuation in the share market.
(ii) Economic environment It consists of economic factors that influence the business in a country. These factors include Gross National Product (GNP), corporate profits, inflation rate, employment, Balance of Payments (BoP), interest rates, consumer income, etc. Economic environment in a country has strong influence on the business in that country.
(iii) Social environment It describes the characteristics of the society in which the organisation exists. Literacy rate, customs, value beliefs, lifestyle, demographic features and mobility of population are the part of the social environment. The trend of change can be predicted well in advance. It is important for managers to notice the direction in which the society is moving and formulate progressive policies according to the changing social scenario.
Question 16.
What is meant by business environment? Explain dynamic nature and uncertainty as features of business environment. (Delhi 2011)
Answer:
Business environment is the sum total of all individuals, institutions and other forces like customers, competitors, suppliers, distributors, industry trends, substitutes, regulations, government activities, social and cultural factors that are outside the control of the business enterprise but may affect its performance.
Features of business environment are:
Dynamic nature Business environment is dynamic as it keeps on changing. It is not static and its components are highly flexible, e.g. technological improvements, increase in competition, etc.
Uncertainty Business environment is uncertain as it is difficult to predict future happenings when environment changes are taking place frequently.
Question 17.
Explain any two impacts of government policy changes on business and industry. (All India 2011; Delhi 2011)
Answer:
Impacts of government policy changes in India are:
- Increasing competition As a result of changes in the rules of industrial licensing, entry of foreign firms creates competition for Indian firms, especially in service industries like telecommunication, airlines, banking, insurance, etc which were earlier placed in the public sector.
- More demanding customers Customers today have become more demanding because they are well informed. Cut-throat competition in the market gives the customers wider choice in purchasing better quality of products and services.
Question 18.
Explain ‘necessity for change’ and ‘need for developing human resources’ as impacts of government policy changes on business and industry. (Foreign 2011)
Answer:
Impacts of government policy changes on business and industry are:
- Necessity for change After 1991, the market forces have become turbulent. As a result, business enterprises have to continuously modify their operations.
- Need for developing human resources The new market conditions require people with higher competence and greater commitment. Hence, there is a need of developing human resources.
Question 19.
Explain any four characteristics of business environment. (Delhi 2019; Compartment 2014)
Or
What is meant by “business environment’? Explain any three features of business environment. (All India 2014; Foreign 2014)
Or
Describe any five features of business environment. (Foreign 2012; All India 2012)
Or
State any five features of business environment. (Delhi 2012, 2012)
Answer:
Business environment is the sum total of all individuals, institutions and other forces like customers, competitors, suppliers, distributors, industry trends, substitutes, regulations, government activities, social and cultural factors that are outside the control of the business enterprise but may affect its performance.
The main features of business environment are:
- Totality of external forces Business environment is the sum total of all external forces outside the control of a business.
- Consists of specific and general forces Specific forces are those, which affect the individual enterprises, viz competitors, customers, investors, and suppliers. Whereas general forces have an impact on all business enterprises. The general forces comprise of social, political, legal, economic and technological forces,
- Complexity Business environment is complex, as to understand it in totality, e.g. it becomes difficult to know the extent of relative impact of social, economic, political, legal and technological factors on change in demand of a product.
- Uncertainty Business environment is largely uncertain, as it is very difficult to predict future happenings, especially when changes takes place at a fast pace.
- Relativity Business environment is relative as it differs from place to place and region to region.
Question 20.
Explain any four features of Demonetisation. (All India 2019)
Answer:
Characteristics of demonetisation are:
- Change in currency It is the act of stripping or discontinuing a currency unit of its legal status by government.
- Contingent Success or failure of demonetisation is dependent upon various factors.
- Objective The objective of demonetisation can be curbing corruption, fake currency, illegal activity and making cashless economy
- Crunches Generally after demonetisation, people face cash crunches for a shorter period.
Question 21.
Explain the following dimensions of business environment.
(a) Pobtical environment
(b) Social environment (All India 2019)
Answer:
(a) Refer to Ans 1 (i) on page 48.
(b) Refer to Ans 1 (iii) on page 48.
Question 22.
Explain any four impacts of government policy changes on business and industry. (All India 2019, Compartment 2012)
Or
The Indian corporate sector has come face-to-face with several challenges due to government policy changes in business and industry. Explain any four such changes. (Compartment 2014)
Or
State any five impacts of government policy changes on business and industry. (Foreign 2012; AH India 2012; Delhi 2012)
Or
Explain, by giving any five reasons, why understanding of business environment is important for managers. (Foreign 2011; All India 2010; Delhi 2010)
Or
Giving any four points, explain the impact of government policy changes of business and industry. (Foreign 2014)
Or
The Indian corporate sector has come face-to-face with several challenges due to government policy change. Explain any four such challenges. (Delhi (c) 2010)
Answer:
Following challenges were faced by the business enterprises:
- Rapidly changing technological environment Increased competition force the firms to develop new ways to survive and grow in the market. Thus, there is a need to adopt the new technologies in order to survive in the long-run.
- Need for developing human resources The new market conditions require people with higher competence and greater commitment. Hence, there is a need of developing human resources.
- Market-orientation The business enterprises start focusing on market-oriented techniques rather than production-oriented techniques.
- Necessity for change After 1991, the market forces have become turbulent. As a result, business enterprises have to continuously modify their operations.
- Increasing Competition With the opening of the economy, globalisation, entry of foreign firms in the country, it has increased competition for domestic players, as they have to compete with them. MNCs are at an advantage due to large financial resources, technological advancement and branded goods, thus posing a serious challenge and threat to domestic players.
Question 23.
Explain the following reforms which had an impact on Indian Business and Industry.
(a) Liberalisation
(b) Globalisation All India 2019
Answer:
(a) Refer to text on page 46.
(b) Refer to text on page 46.
Question 24.
Mahinder Agro Ltd. started a new venture for distribution of harmful and chemical fertilizers free vegetables. They conducted a survey to find out consumer preferences for such vegetables. They found that most of the consumers were concerned about the harmful chemicals being used in growing the vegetables. They found that 90% of the households were searching for its alternatives. The company contacted a group of agriculture experts to lay down the procedure for growing the vegetables by the farmers. They decided to train the farmers in new technology to grow chemical free vegetables according to new innovative methods. The experts also suggested soil management techniques through which farmers would be able to create an abundant and lasting harvest.
Identify and explain the two dimensions of business environment highlighted in the above para. (Delhi 2019)
Answer:
The dimensions of business environment highlighted here are:
- Social environment
- Technological environment
For explanation, refer to text on page 45.
Question 25.
‘Konark Ltd.’ is an electronic goods manufacturing enterprise situated in Shivpuri, Madhya Pradesh. It is earning a very low revenue in comparison to a competing electronic goods manufacturing enterprise, ‘Nova Ltd.’ situated in Mumbai. Both Konark’s and Nova’s operations are affected directly by the investors, customers, competitors and suppliers, which are unique to their respective locations. In addition to this, individuals firms of this field are affected indirectly by the factors like the money supply in the economy, composition of the families, the technological changes, etc.
(a) Identify and state the feature of the concept discussed in the above paragraph.
(b) Also, state any four points of importance of this concept. CBSE 2018
Answer:
(a) The concept discussed here is ‘Business Environment’ and the feature is ‘Relativity’. Relativity Business enviroment is a relative concept as it differ from country-to-country and region-to-region. e.g. Demand for sarees is quite high in India but in foreign countries it has no existence. Similarly, regulations, policies, consumers’ preference, etc all differ from one region to another.
(b) Four points of importance of this concept are:
(i) It enables the firm to identify opportunities and get the first mover advantage Opportunities are the positive trends that help firms to grow. A good knowledge of business environment helps a manager to identify such opportunities earlier to take its benefit, rather than losing it to other competing enterprises. For example, Maruti Udyog was the first automobile company in India to recognise the opportunity to develop small cars, due to which, it is still one of the market leaders in that segment.
(ii) It helps the firm to identify threats and early warning signals Threats refer to the negative trends, which will hinder the performance of the enterprise. The businessmen, who are able to scan and understand the business environment on time get a warning signal to deal with such negative changes.
(iii) It helps in tapping useful resources Environment is a source of various resources for business like finance, machinery, raw materials, etc. Contrary to this, business enterprise supplies goods and services to the society in the form of taxes, products, return on investment, etc. A good understanding of environment helps the firm to convert such resources into output required by the environment and society.
(iv) It helps in coping with rapid changes Business environment is fast changing due to turbulent market conditions, more demanding customers, changing technology and increasing global competition. In order to cope up with such changes and derive benefit from them, managers must examine their environment and develop suitable action.
Question 26.
Narendrachal Networks and Technologies Ltd. is a leatder in technology innovation in U.S.A. creating products and solutions for a connected world. It has a large Research and Development team which invented the first smart watch W-I, which besides showing the time would also monitor few health parameters like heart beat, blood pressure, etc. While in search of markets abroad, the company found that in India, the reform process was underway with the aim of accelerating the pace of economic growth.
The company decided to take advantage of the fact that licensing requirements had been abolished. The company was also aware that there had been increased level of interaction and interdependence among the various nations of the world and India could be made a base for its international trade. It set up its office in Gujarat with a view to capture the Indian market. In a short span of time, the company emerged as a market leader. Success of the company attracted many other players to enter the market. Competition resulted in reduction in prices, thereby benefitting the customers.
(i) In the above paragraph, two major concepts related to government policy have been discussed. Identify and explain those concepts.
(ii) Also, explain briefly any three impacts of these concepts on Indian business and industry. (All Indio 2017; Delhi 2017)
Answer:
(i) The two major concepts related to government policy are:
- Liberalisation It refers to an end of licence, quota and many more restrictions and controls which were put on industries before 1991. The reforms aimed at deregulation and reduction of government controls, greater autonomy of private investment and less dependence on public sector.
- Globalisation It refers to integrating our economy with the world’s economy. It is the system of interaction among countries of the world in order to develop the global economy. Physical geographical gap or political boundaries no longer remain barriers for a business enterprise to serve in a distant geographical market.
(ii) Three impacts of these reforms on Indian business and industry are:
- Technological environment: Increased competition force the firms to develop new ways to survive and grow in the market. Thus, there is a need to adopt the new technologies in order to survive in the long-run.
- Need for developing human resources: The new market conditions require people with higher competence and greater commitment. Hence, there is a need of developing human resources.
- Market-orientation The business enterprises start focusing on market-oriented techniques rather than production-oriented techniques.
Question 27.
A recent rate cut in the interest on loans announced by the banks encouraged Amit, a science student of Progressive School to take a loan from State Bank of India to experiment and develop cars to be powered by fuel produced from garbage. He developed such a car and exhibited it in the Science Fair organised by Directorate of Education. He was awarded first prize for his invention. Identify and explain the dimensions of business environment discussed in the above case. Delhi 2016
Answer:
Business environment consists of factors that influences many enterprises at the same time. These are called dimensions of business environment. These factors are categorised as social, economic, political, legal and technological environment which are considered relevant for decision-making and improving the performance of an enterprise, The dimensions of business environment discussed in the above case are:
(i) Economic environment Refer to ans no. 1 on page 48.
(ii) Technological environment It refers to the change, taking place in the method of production and use of equipment to improve the quality of product. In other words, we can say technological environment includes forces relating to scientific improvements and innovations, which provide new ways of producing goods and services and methods and techniques of operating a business.
(iii) Political environment Refer to ans no. 1 on page 48.
Question 28.
With change in the consumption habits of people, Neelesh, who was running a sweets shop shifted to chocolate business. On the eve of Diwali, he offered chocolates in attractive packages at reasonable prices. He anticipated huge demand and created a website ‘chocolove.com’ for taking orders online. He got lot of orders online and earned huge profit by selling chocolates.
Identify and explain the dimensions of business environment discussed in the above case. (All India 2016)
Answer:
Business environment consists of factors that influences many enterprises at the same time. These are called dimensions of business environment. These factors are categorised as social, economic, political, legal and technological environment which are considered relevant for decision-making and improving the performance of an enterprise.
The dimensions of business environment discussed in the above case are
- Economic environment Refer to ans no. 1 on page 48.
- Social environment Refer to ans no. 1 on page 48.
- Technological environment Refer to ans , no. 9 on page 52.
Question 29.
How does the understanding of business environment help the management in the following
(i) Identification of threats and early warning signals and
(ii) Improving performance (Comportment 2015)
Or
What is meant by business environment ? State any three points of its importance. (Delhi 2015)
Or
How does understanding of business environment help the managers? Explain with the help of any five points. (Delhi 2014, 2012)
Or
Understanding of environment by I business managers enables them not only to identify and evaluate, but also to react to the forces external to their firms? In the light of the statement, explain any four points of importance of business environment. (compartment 2014)
Or
Explain any four points of importance of business environment. (Compartment 2014; All India 2011; Delhi 2011)
Or
Explain by giving any four points, why in the present day competitive market, it is essential for a business to remain alert and aware of its environment? (All Indio 2010: Delhi (C) 2010)
Answer:
In the present day of competitive market, it is essential for a business to remain alert and aware of its environment, because of the following points:
(i) Identify opportunities and getting the first mover advantage Awareness of environment helps an enterprise to identify the opportunities prevailing in the market and they can make strategies to capitalise such opportunities at the earliest, e.g. Maruti Udyog became the leader in the small car market because it was the first company who recognised the need for small cars in the environment.
(ii) Identify threats and early warning signals Environmental awareness helps an enterprise in identifying possible threats in future, so that the enterprise can take timely measures to minimise the threats and its adverse effects, if any, e.g. when the new firms entered in the mid segment cars (threat), Maruti Udyog increased the production of its Esteem car. Increase in production enabled the company to make faster delivery. As a result, the company captured a substantial share of the market and became a leader in this segment.
(iii) Assist in planning and policy formulation Environment awareness helps a business unit to identify opportunities and threats in the market. These serve as a basis for planning future course of action and making policies for the same.
(iv) Tapping useful resources A business environment is an open system which gets resources such as capital, labour, machines, materials, etc from the environment, converts them into goods and services desired by the customers and then supplies its output to the environment. Thus, a business firm depends on its external environment for tapping various resources and for the sale of its output.
(v) Improving performance An enterprise that monitors its environment continuously, is in a position to improve not only its present performance, but also improve its future performance. This ensures success of the business in the long-run.
Question 30.
The court passed an order that all schools must have water purifiers for the school children as
(i) Society in general is more concerned about quality of life.
(ii) Innovative techniques are being developed to manufacture water purifiers at competitive rates.
(iii) Incomes are rising and children at home are also drinking purified water.
(iv) The government is also showing positive attitude towards the water purifier business.
Identify the different dimensions of business environment by quoting from the above details. (Delhi 2013)
Answer:
‘The court passed an order that all schools must have water purifier’. The quoted line is depicting legal environment. Business has to function within the framework of laws and regulations of the country. Legal environment exercises significant influence on business activities.
(i) ‘Society in general is more concerned about quality of life’. The quoted line is depicting the social environment as this environment consists of all the social and cultural forces within which business firms operate.
(ii) ‘Innovative techniques are being developed to manufacture water purifiers at competitive rates’.
The quoted line is depicting the technological environment. It includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services.
(iii) ‘Incomes are rising and children at home are also drinking purified water’. The quoted line is depicting the economic environment. It consists of the factors and forces concerning means of production and distribution of wealth. It includes all such forces of economic development which influence the product’s market scope of business.
(iv) ‘The government is also showing positive attitude towards the water purifier business’. The quoted line is depicting the political environment. It is concerned with the forces related with political stability and political conditions that have strong impact on business.
Question 31.
As per directions issued by Supreme Court, the government passed an order to ban the sale of tobacco products within the area of 200 metres of all educational institutions as
(i) its consumption is injurious to health.
(ii) people are becoming more conscious about health and fitness.
It is indicating the government’s attitude towards this business. Identify the ’business environment’ under four different dimensions quoting the lines from the above para. (Comportment 2013)
Answer:
The dimensions of business environment referred to here are:
(i) Social environment Refer to ans no. 1 (in) on page 48.
(ii) Political environment Refer to ans no. 1 (i) on page 48.
(iii) Legal environment It consists of legislation that is passed by the Parliament and State Legislatures. This component sets the framework of law within which the business is free to operate. Example of such legislation specifically aims at business operations which include the Trade Marks Act, 1969, Essential Commodities Act, 1955, Standards of Weights and Measures Act, 1969 and Consumer Protection Act, 1986.
(iv) Economic environment Refer to ans no. 1 (ii) onpage48.
Question 32.
The government encouraged foreign companies to invest in some sectors of retailing. The argument is
(i) Customers can purchase the products of these companies as their incomes are rising.
(ii) It will increase innovations which will provide new ways of producing goods. This will ultimately improve the quality of life.
Identify and explain the “business environment’ under four different dimensions quoting the lines from the above description, (comportment 2013)
Answer:
The dimensions of business environment referred to here are:
(i) Social environment Refer to ans no. 1 (iii) on page 48.
(ii) Political environment Refer to ans no. 1 (i) on page 48.
(iii) Economic environment Refer to ans no. 1 (ii) on page 48.
(iv) Technological environment Refer to ans no. 9 (ii) on page 52.
Question 33.
The court passed an order to ban polythene bags as
(i) These bags are creating many environmental problems which affect the life of people in general. Society in general is more concerned about quality of life.
(ii) The government decided to give subsidy to jute industry to promote this business.
(iii) Innovative techniques are being developed to manufacture jute bags at low rates.
(iv) Incomes are rising and people can afford to buy these bags.
Identify the different dimensions of business environment by quoting the lines from the above particulars. (All India 2013)
Answer:
(i) ”The court passed an order to ban polythene bags’. The quoted line is depicting the legal environment. Business has to function within the framework of laws and regulations of the country. Legal environment exercises significant influence on business activities.
(ii) ‘Polythene bags are creating many environmental problems which affect the life of people in general’ and society in general is more concerned about quality of life’. These quoted lines are depicting the social environment, which consists of all the social and cultural forces within which business firms operate.
(iii) ‘Government decided to give subsidy to jute industry to promote this business’. The quoted line is depicting the political environment, which is concerned with the forces related with political stability and political conditions that have strong impact on business.
(iv) ‘Innovative techniques are being developed to manufacture jute bags at low rates’. The quoted line is depicting the technological environment. It includes forces relating to scientific improvements and innovations which provide new ways of producing goods and services.
(v) ‘Incomes are rising and people can afford to buy these bags’. The quoted line is depicting the economic environment. It consists of the factors and forces concerning means of production and distribution of wealth. It includes all such forces of economic development which influence the product’s market scope of business.
Question 34.
Explain with an example the impact of legal environment on business performance (ompartment 2012)
Or
Management of every enterprise can be benefited from being aware of different dimensions of business environment. Explain any four such dimensions. (All India 2010)
Answer:
For impact and dimensions of business environment, refer to ans no. 13 on page 54.
Question 35.
When government policy changed, it laid some positive and negative impact on the business. Discuss some of them. (Delhi 2012, 2010; All India 2011)
Answer:
Positive impacts of government policy changes are:
(i) Market orientation Earlier, production was done and whatever was produced was sold. But with the New Industrial Policy leading to increased competition, there is a shift towards customer orientation, where study and analysis of market is done before anything is produced, so that the products are according to the needs and demands of customers.
(ii) Development of human resource The new market conditions require people with higher competence and greater tommitment. This has necessitated development of human resource.
Negative impacts of government policy changes are:
(i) Rapidly changing technological environment Due to increased competition, technological advancement are taking very fast. This is specifically a disadvantage to small firms who are not able to cope up with these changes and sometimes are even forced to shut down their business.
(ii) Increasing competition With the opening of the economy, globalisation, entry of foreign firms in the country, it has increased competition for domestic players, as they have to compete with them. MNCs are at an advantage due to large financial resources, technological advancement and branded goods, thus posing a serious challenge and threat to domestic players.
Question 36.
With rapid advancements in the field of replacing manual work with machines, a robot named ‘Sujan’ has been invented and developed and is likely to get the citizenship of the country of its origin.
It has led to a stage where machines are being used in place of human beings. ‘Sujan’ is doing all types of work whether routine or hazardous and even answering the queries of people. However, this issue has to be carefully looked into keeping in mind the consumer attitude towards product innovations, problem of unemployment and its impact on the quality of life. Through the orders and decisions of various commissions and agencies at Centre, State or local level the Indian Government is playing a very significant role in balancing the use of human and machine power.
Various dimensions of business environment are being discussed in the above para.
By quoting the fines from the above identify and explain any three dimensions. (Comportment 2018)
Answer:
Dimensions highlighted are:
- Technological environment With rapid its origin.
- Social environment However, this of life.
- Political environment Through the machine power.
For explanation of these dimensions, refer to text on page 45.
Multiple Choice Questions
Question 1.
Which of the following is not the importance of business environment?
(a) It helps the firm to identify threats and early warning signals
(b) It helps in coping with rapid changes
(c) It has a lower rate of capital formation and less economic growth
(d) It helps in tapping useful resources
Answer:
(c) It has a lower rate of capital formation and less economic growth
Question 2.
Which of the following statements is incorrect?
(a) Business environment is aggregative in nature
(b) Business environment is dynamic in nature
(c) Business environment does not include both specific and general forces
(d) Business environment is a relative concept
Answer:
(c) Business environment does not include both specific and general forces
Question 3.
“Demand for reservation in jobs for minorities refer to an example of key component of general environment of business”. Name this component.
(a) Economic environment
(b) Political environment
(c) Legal environment
(d) Social environment
Answer:
(d) Social environment
Question 4.
Give the name of environment that provides the framework, of laws within which the business has to operate.
(a) Political environment
(b) Social environment
(c) Technological environment
(d) Legal environment
Answer:
(d) Legal environment
Question 5.
……….. builds up confidence among business people to invest in the long-term projects.
(a) Political outlook
(b) Political stability
(c) Political ideology
(d) None of these
Answer:
(b) Political stability
Question 6.
What makes the business free from rules, procedures and instructions?
(a) Privatisation
(b) Globalisation
(c) Liberalisation
(d) None of these
Answer:
(c) Liberalisation
Question 7.
Analysing process of change in the business environment involves conceptualizing it as
(a) divisible in nature
(b) complex in nature
(c) dynamic concept
(d) static concept
Answer:
(c) dynamic concept
Question 8.
Does study of business environment help in maintaining image in market?
(a) Yes, study of business environment is necessary for maintaining good image in market.
(b) No, study of business environment is not necessary for maintaining good image in market.
(c) Study of social environment is necessary instead of business environment, for maintaining good image in market.
(d) None of the above
Answer:
(a) Yes, study of business environment is necessary for maintaining good image in market.
Question 9.
“Equal pay for equal work” is an example of which dimension of business environment?
(a) Economic environment
(b) Legal environment
(c) Social environment
(d) None of the above
Answer:
(c) Social environment
Question 10.
An enterprise that monitors its environment continuously, is in a position to improve its future performance. Identify the importance of business environment.
(a) It helps in coping with rapid changes
(b) It helps in tapping useful resources
(c) It helps in improving performance
(d) None of the above
Answer:
(c) It helps in improving performance
Question 11.
“The understanding of business environment enables the firm to identify opportunities”. What is meant by opportunities here?
(a) Negative changes in external environment
(b) Positive changes in external environment
(c) Negative changes in internal environment
(d) None of the above
Answer:
(b) Positive changes in external environment
Question 12.
“Environment provides both constraints and opportunities”. What is your opinion?
(a) Yes, it provides both constraints and opportunities
(b) It neither provides constraints nor provide opportunities
(c) It provides opportunities but not constraints
(d) None of the above
Answer:
(a) Yes, it provides both constraints and opportunities