CHAPTER 3 : Business Environment NCERT MCQ CLASS 12TH Business Studies | EDUGROWN

NCERT MCQ ON Business Environment:

Question1: Which of the following does not characterise the business environment?

a) Uncertainty

b) Employees

c) Relativity

d) Complexity

Answer: B

Question2: Which of the following best indicates the importance of business environment?

a) Identification

b) Improvement in performance

c) Coping with rapid changes

d) All of them

Answer: D

Question3: Which of the following is an example of social environment?

a) Money supply in the economy

b) Consumer Protection Act

c) The Constitution of the country

d) Composition of family

Answer: D

Question4: Liberalisation means

a) Integration among economies

b) Reduced government controls and restrictions

c) Policy of planned disinvestments

d) None of them

Answer: B

Question5: Which of the following does not explain the impact of Government policy changes on business and industry?

a) More demanding customers

b) Increasing competition

c) Change in agricultural prices

d) Market orientation

Answer: C

Question6: Business environment is a group of powers.

a) Special

b) General

c) Internal

d) Special and General

Answer: D

Question7: Which factor is not included in Macro Environment?

a) Economic Environment

b) Competitors

c) Social Environment

d) Political Environment

Answer: B

Question8: The entry of the multinational companies in large numbers in the Indian market has created .

a) Huge Demand

b) Huge Supply

c) Tough Competition

d) Huge Demand and Supply

Answer: C

Question9: Reducing the role of Public Sector and increasing the role of Private Sector fall sunder .

a) Liberalisation

 b) Privatisation

c) Liberalisation and Privatisation

d) Globalisation

Answer: B

Question10: Under the Reserve Bank keeps control on the money supply in order to achieve the objectives of the general economic policy.

a) Fiscal Policy

b) Monetary Policy

c) Trade Policy

d) Industrial Policy

Answer: B

Question11: The income and expenditure policy of the government is called.

a) Fiscal Policy

b) Industrial Policy

c) Trade Policy

d) Monetary Reforms

Answer: A

Question12: In all the countries there is a free-flow of goods and services under which of the following does it come?

a) Liberalisation

b) Privatisation

c) Liberalisation and Privatisation

d) Globalisation

Answer: D

Question13: Which of the following deals with the process of simplification of Import-Export?

a) Liberalisation

b) Privatisation

c) Liberalisation and Privatisation

d) Globalisation

Answer: A

Question14: With the introduction of Photostat Machines in the market, the carbon paper industry was adversely affected. Which component of environment was responsible for it?

a) Economic

b) Political

c) Technical

d) All the above

Answer: C

Question15: Which factor is not included in Internal Environment?

a) Objective

b) Policies

c) Public

d) Production-Method

Answer: C 

Question16: Globalisation aims at ____

• a) All the options
• b) Export Promotion
• c) Foreign exchange reforms
• d) Import liberalisation

Answer: All the options

Question17: Which of the following does not explain the impact of Government policy changes on business and industry?

• a) Change in agricultural prices
• b) Market orientation
• c) More demanding customers
• d) Increasing competition

Answer: Change in agricultural prices

Question18: A possible obstacle to growth of privatisation is

• a) Sale of least profitable enterprises
• b) Profit earned by public enterprises
• c) Licensing
• d) All the options

Answer: Sale of least profitable enterprises

Question19: Which one is not an element of internal environment?

• a) Money and capital market
• b) Marketing capabilities
• c) Operational Capabilities
• d) Personal Capabilities

Answer: Money and capital market

Question20: Globalisation means

• a) Adopting a global outlook
• b) Setting of firms branches in other countries
• c) Earning profit from Exports
• d) Attracting foreign investment

Answer: Adopting a global outlook

Question21: Privatisation of ownership through sale of equity share is called

• a) Disinvestment
• b) Denationalisation
• c) Contracting
• d) None of the options

Answer: Disinvestment

Question22: Which among these can be condition for the success of privatisation

• a) Barriers to enter the market
• b) Alternative institutional arrangements
• c) Measurability of performance
• d) All the options

Answer: Barriers to enter the market

Question23: The pre-liberalisation era of Indian Economy was under the grip of

• a) Unfavourable and alarming balance of payment
• b) Fiscal Deficit
• c) Under-employment
• d) Unemployment

Answer: Unfavourable and alarming balance of payment

Question24: Which among these is not a method of privatisation

• a) Sale of Business
• b) Denationalisation
• c) Franchising
• d) All the options

Answer: Sale of Business

Question25: What are the decisions taken by government of India pertaining to Industrial Sector in the new industrial policy of 1991?

• a) All the options
• b) VRS to shed the excess load of workers
• c) Disinvestment of public sector share holding
• d) Referring sick units to BIFR

Answer: All the options

Question26: Which among the following is not opened for private sector participation

• a) Railways
• b) Power sector
• c) Telecommunication sector
• d) Education sector

Answer: Railways

Question27: Company images and brand equity is factor affecting business

• a) Externally
• b) Internally
• c) Government Policy
• d) None of the options

Answer: Externally

Question28: Relaxing the restrictions and controls imposed on Business and industry means

• a) Liberalisation
• b) Privatisation
• c) Globalisation
• d) None of the options

Answer: Liberalisation

Question29: By which act government checks restrictive trade?

• a) MRTP Act
• b) Industrial Policy Act 1991
• c) FEMA act
• d) None of the options

Answer: MRTP Act

Question30: Liberalization means

• a) Liberating the industry, trade and economy from unwanted restrictions
• b) Reducing number of reserved industries from 17 to 8
• c) Opening up of economy to the world by attaining international competitiveness
• d) Free determination of interest rates

Answer: Liberating the industry, trade and economy from unwanted restrictions

Question31: Which is not essential feature of Globalisation

• a) The government redefined the role of public sector.
• b) Import liberalisation
• c) Export promotion
• d) Foreign exchange reforms

Answer: The government redefined the role of public sector.

Question32: Which is not essential feature of Privatisation

• a) No restriction on expansion or contraction of business
• b) The government redefined the role of public sector.
• c) Policy of planned disinvestments of the public sector.
• d) Refining of sick enterprises to the Board of Industrial and Financial Reconstruction.

Answer: No restriction on expansion or contraction of business

Question33: Which is not essential feature of Liberalisation

• a) The government redefined the role of public sector.
• b) No restriction on expansion or contraction of business
• c) Free movement of goods and services.
• d) Freedom in fixing the prices of goods and services.

Answer: The government redefined the role of public sector.

Question34: What is the Impact of Government policy changes on business and industry

• a) All the options
• b) Increasing Competition
• c) More Demanding Customer
• d) Rapidly Changing Technological Environment

Answer: All the options

Question35: ___________The new set of economic reforms that aim at giving greater role to the private sector in the nation building process and a reduced role to the public sector.

• a) Privatisation
• b) Liberalisation
• c) Globalisation
• d) None of the options

Answer: Privatisation

Question36: How many important features of New Economic Policy, 1991

• a) 3
• b) 2
• c) 4
• d) 5

Answer: 3

Question37: Why it is important for business enterprises to understand their environment

• a) All the options
• b) It Enables the Firm to Identify Opportunities
• c) It Helps the Firm to Identify Threats
• d) It Helps in Coping with Rapid Changes

Answer: All the options

Question38: Advance understanding of business environment will help in

• a) Planning and Policy Formulation
• b) Privatisation
• c) Developing new principles of management
• d) Liberalisation

Answer: Planning and Policy Formulation

Question39: Globalisation aims at ____

• a) All the options
• b) Export Promotion
• c) Foreign exchange reforms
• d) Import liberalisation

Answer: All the options

Question40: Through Environmental scanning a business firm can enjoy the ___________

• a) First Mover Advantage
• b) Benefit of taxes
• c) Last Mover Advantage
• d) None of the options

Answer: First Mover Advantage

Question41: The complete awareness and understanding of business environment is called _________

• a) Environmental Scanning
• b) Technological advancement
• c) Liberalisation
• d) Privatisation

Answer: Environmental Scanning

Question42: For the protection of a consumers right, there is

• a) Consumer Protection Act, 1986
• b) Consumer protection Act 1984
• c) Consumer Protection Act, 1932
• d) Consumer Protection Act, 1956

Answer: Consumer Protection Act, 1986

Question43: Advertisements of cigarettes carry the statutory warning. This is because of

• a) Legal Environment
• b) Social Environment
• c) Political Environment
• d) None of the options

Answer: Legal Environment

Question44: Technological improvements and innovations result in__

• a) Render existing products obsolete
• b) Increase in tax
• c) Reduction in profit margins
• d) None of the options

Answer: Render existing products obsolete

Question45: Increased competition in the market will _______

• a) Reduce the profit margin
• b) Increase the tax
• c) Increase the profit
• d) Increase the cost of production

Answer: Reduce the profit margin

Question46: What will be the affect of increase in tax by the government

• a) Increase in cost of production
• b) Creates fear in the minds of investors
• c) Increase in profit margin
• d) None of the options

Answer: Increase in cost of production

Question47: What creates fear in the minds of investors to invest in long term projects?

• a) Political Uncertainty
• b) Privatisation
• c) Globalisation
• d) All the options

Answer: Political Uncertainty

Question48: Reduction in the role of public sector is due to _________

• a) Privatisation
• b) Political Environment
• c) Liberalisation
• d) Globalisation

Answer: Privatisation

Question49: Giving freedom to Indian business and industries from all unnecessary government controls and restrictions is an example of ____________

• a) Liberalisation
• b) Privatisation
• c) Globalisation
• d) All the options

Answer: Liberalisation

Question50: Technological environment includes changes relating to

• a) All the options
• b) Scientific improvement
• c) Method of production
• d) Use of new equipment

Answer: All the options

Question51: Booking of Railway tickets through internet from home or office is an example of _________

• a) Technological Environment
• b) Political Environment
• c) Economic Environment
• d) All the options

Answer: Technological Environment

Question52: Advertisement of alcoholic beverages is prohibited. This is an example of __________

• a) Legal Environment
• b) Economic Environment
• c) Political Environment
• d) All the options

Answer: Legal Environment

Question53: Subsidy to cotton textile businesses is the __________

• a) Political Environment
• b) Legal Environment
• c) Social Environment
• d) Economic Environment

Answer: Political Environment

Question54: The trend of health and fitness has created a demand for products like gyms, bottled mineral water and food supplements etc., these are the example of

• a) Social Environment
• b) Political Environment
• c) Legal Environment
• d) Economic Environment

Answer: Social Environment

Question55: Gross Domestic Product (GDP) is concerned with ____________

• a) Economic Environment
• b) Social Environment
• c) Political Environment
• d) Legal Environment

Answer: Economic Environment

Question56: Which of the following does not explain the impact of Government policy changes on business and industry?

• a) Change in agricultural prices
• b) Market orientation
• c) More demanding customers
• d) Increasing competition

Answer: Change in agricultural prices

Question57: ________reduces the control of government and encourages private participation

• a) Liberalization
• b) Privatization
• c) Globalization
• d) All the options

Answer: Liberalization

Question58: Liberalisation means

• a) Reduced government controls and restrictions
• b) Integration among economies
• c) Policy of planned disinvestments
• d) None of the options

Answer: Reduced government controls and restrictions