For Class 12 CBSE Business Studies Students.

25 Multiple Objective Type Questions and Answers for chapter Business Environment
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Q1: _____________ means the sum of all individuals, institutions and other forces that are outside the control of business enterprise but that may affect its performance.

Fill in the above blank with suitable concept.

  • Controlling (c) Directing
  • Motivation (d) Environment
Ans: (d) Environment

Q2:  Business Environment means the sum of all individuals, institutions and other forces that are outside the control of business enterprise but that may affect its performance.

Which feature of business environment is highlighted above?

  • Totality of external forces (c) Relativity
  • Inter relatedness (d) Dynamic Nature
Ans: (a) Totality of external forces

Q3: Increased life expectancy of people and increased awareness for health care have increased the demand for many health products and services like coke, fat free cooking oil, and health resorts. New health products and services have in turn changed people’s lifestyles.

Which feature of business environment is highlighted above?

  • Totality of external forces (c) Relativity
  • Inter relatedness (d) Dynamic Nature
Ans: (b) Inter relatedness

Q4: It may be difficult to know the extent of the relative impact of the social, economic, political technological or legal factors on change in demand of a product in the market.

Which feature of business environment is highlighted above?

  • Complexity (c) Relativity
  • Inter relatedness (d) Dynamic Nature
Ans: (a) Complexity

Q5: Political conditions in the USA, differ from those in China or Sri Lanka.

Which feature of business environment is highlighted above?

  • Totality of external forces (c) Relativity
  • Inter relatedness (d) Dynamic Nature
Ans: © Relativity

Q6: Which of the following is not the feature of business environment?

Which feature of business environment is highlighted above?

  • Totality of external forces (c) Relativity
  • Helps in improving performance (d) Dynamic Nature
Ans: (b) Helps in improving performance

Q7: Maruti Udyog became the leader in the small car market because it was the first to identify the need of small cars in an environment of rising petrol prices a large middle-class population.

Which importance of understanding business environment is highlighted in above case?

  • Enable the firms to identify opportunities and getting first mover advantage
  • Helps the firm to identify threats and early warning signals
  • Helps in tapping useful resources
  • Helps in coping with rapid changes
Ans: (a) Enable the firms to identify opportunities and getting first mover advantage

Q8: If an Indian firm gets to know that a foreign multinational is entering the Indian market with better quality product at less price then based on this information the Indian firm can prepare themselves to meet the competition by adopting appropriate measures in time.

Which importance of understanding business environment is highlighted in above case?

  • Enable the firms to identify opportunities and getting first mover advantage
  • Helps the firm to identify threats and early warning signals
  • Helps in tapping useful resources
  • Helps in coping with rapid changes
Ans: (b) Helps the firm to identify threats and early warning signals

Q9: Which of the following is not the importance of understanding business environment?

  • Enable the firms to identify opportunities and getting first mover advantage
  • Helps the firm to identify threats and early warning signals
  • Specific and General forces
  • Helps in coping with rapid changes
Ans: (b) Specific and general forces

Q10: Aman, MD of ABC construction Ltd is of the view that in case of construction companies and automobile manufacturers, low longer-term rates are beneficial because they result in increased spending by consumers for buying homes and cars on borrowed money.

Which element of business environment is highlighted above?

  • Economic Environment (c) Legal Environment
  • Social Environment (d) Political Environment
Ans: (a) Economic Environment

Q11: Aryan, General Manager of XYZ Ltd discussed in a meeting with its planning department that High inflation rates generally results in constraints on business enterprise as they increase the various costs of business such as the purchase of raw material or machinery and payment of wages and salaries to employees

Which element of business environment is highlighted above?

  • Economic Environment (c) Legal Environment
  • Social Environment (d) Political Environment
Ans: (a) Economic Environment

Q12: A study related to effect of environment on business revealed that the celebration of Diwali, Eid Christmas and Guru Parvo in India provides significant opportunities for greetings card companies, sweets or confectionery manufacturers, tailoring outlets and many related business         

Which element of business environment is highlighted above?

  • Economic Environment (c) Legal Environment
  • Social Environment (d) Political Environment
Ans: (b) Social Environment

Q13: In a recent market research it is revealed that the health and fitness trend has become popular among large number of urban dwellers. This has created a demand for products like organic food, diet soft drinks, gyms, bottled water and food supplements.

Which element of business environment is highlighted above?

  • Economic Environment (c) Legal Environment
  • Social Environment (d) Political Environment
Ans: (b) Social Environment

Q14: Certain Changes like shifts in demand from vacuum tubes to transistors, from steam locomotives to diesel and electric engines, from fountain pens to ball pointy, from propeller airplanes to jets and from typewriters to computer-based word processors have all been responsible and creating new business.

Which element of business environment is highlighted above?

  • Economic Environment (c) Technological Environment
  • Social Environment (d) Political Environment
Ans: © Technological Environment

Q15: Even after opening of our economy in 1991, foreign companies found it extremely difficult to cut through the bureaucratic red tape to get permits for doing business in India Sometimes it took months to process even application for the purpose. As a result these companies were discouraged from investing in our country.

Which element of business environment is highlighted above?

  • Economic Environment (c) Legal Environment
  • Social Environment (d) Political Environment
Ans: (d) Political Environment

Q16: The advertisement of alcoholic beverages is prohibited. Advertisements including packets of cigarettes carry the statutory warning “Cigarette smoking is injurious to health”. Similarly, advertisements of baby food must necessarily inform the potential buyer that mother’s milk is the best. All these regulations must be followed by advertisers.

Which element of business environment is highlighted above?

  • Economic Environment (c) Legal Environment
  • Social Environment (d) Political Environment
Ans: © Legal Environment

Q17: _______________ economic reform was aimed at giving freedom to Indian business and industry from all unnecessary controls and restrictions.

Fill in the above blank with suitable reform.

  • Liberalisation (c) Rupee devaluation
  • Globalisation (d) Privatisation
Ans: (A) liberalisation

Q18: ___________economic reform means the integration of the various economies of the world leading towards the emergence of a cohesive global economy. Fill in the above blank with suitable reform.

  • Liberalisation (c) Rupee devaluation
  • Globalisation (d) Privatisation
Ans: (d) Globalisation

Q19: _____________ economic reform aimed at giving greater role to the private sector in the nation building process and a reduced role to the public sector.

Fill in the above blank with suitable reform.

  • Liberalisation (c) Rupee devaluation
  • Globalisation (d) Privatisation
Ans: (d) Privatisation

Q20: Under Privatisation, to redefine the role of public sector, government adopted the policy of planned disinvestment of public sector and decided to refer the loss making and sick public sector enterprises to which of the following?

  • World Trade Organisation (c) NABARD
  • Board of industrial and Financial Reconstruction (d) District industrial Centres
Ans: (b) Board of industrial and Financial Reconstruction

Q21: On which of the following dates Demonetisation was announced?

  • November 8, 2016 (c) November 8, 2014
  • November 2, 2016 (d) November 8, 2015
Ans: (a) November 8, 2016

Q22: Which of the following is the feature of Demonetisation?

  • Tax administration measure (c) To avoid tax evasion
  • Create less cash or cash lite economy (d) all of the above
Ans: (d) all the above

Q23: On which of the following sectors there was no effect of demonetisation?

  • Interest rates (c) Public sector wealth
  • Private wealth                  (d) Digitisation
Ans: © Public sector wealth

Q24: Which of the following is not the impact of government policy changes on business and industry?

  • Increasing competition (c) Demonetisation
  • More demanding customers (d) Necessity for change
Ans: © Demonetisation

Q25: Earlier firms used to produce first and then go to the market for sale later, but after new economic policy now, firms’ study and analyse the market first and produce goods accordingly.

Which impact of New economic policy on business and industry is highlighted in above case.

  • Increasing competition (c) Market Orientation
  • More demanding customers (d) Necessity for change
Ans: © market Orientation
 
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