Refer to CBSE Class 12 Business Studies Business Environment MCQs provided below available for download in Pdf. The MCQ Questions for Class 12 Business Studies with answers are aligned as per the latest syllabus and exam pattern suggested by CBSE, NCERT and KVS. Multiple Choice Questions for Chapter 3 Business Environment are an important part of exams for Class 12 Business Studies and if practiced properly can help you to improve your understanding and get higher marks. Refer to more Chapter-wise MCQs for CBSE Class 12 Business Studies and also download more latest study material for all subjects
MCQ for Class 12 Business Studies Chapter 3 Business Environment
Class 12 Business Studies students should refer to the following multiple-choice questions with answers for Chapter 3 Business Environment in Class 12.
Chapter 3 Business Environment MCQ Questions Class 12 Business Studies with Answers
Question: Which of the following does not characterise the business environment?
a) Uncertainty
b) Employees
c) Relativity
d) Complexity
Answer: B
Question: 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
Question: 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
Question: Liberalisation means
a) Integration among economies
b) Reduced government controls and restrictions
c) Policy of planned disinvestments
d) None of them
Answer: B
Question: 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
Question: Business environment is a group of powers.
a) Special
b) General
c) Internal
d) Special and General
Answer: D
Question: Which factor is not included in Macro Environment?
a) Economic Environment
b) Competitors
c) Social Environment
d) Political Environment
Answer: B
Question: 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
Question: ‘‘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
Question: ……… is considered as the major element of political environment.
(a) The extent of government intervention in business
(b) Planned outlay in public and private sectors
(c) Expectation from the workforce
(d) Administrative order issued by government authorities
Answer: A
Question: “The celebration of Diwali, Eid, Christmas and Guru Parv in India provides significant financial opportunities for greeting cards companies, sweets or confectionery manufacturers, tailoring outlets and many other related business. Name the dimension of the business environment highlighted by this statement.
(a) Technological environment
(b) Legal environment
(c) Political environment
(d) Social environment
Answer: D
Question: 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
Question: Assertion (A) Manufacturers have now flexible manufacturing systems.
Reason (R) Agricultural and industrial production trends are the economic dimensions of the environment which affect the business environment.
Alternatives
(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
(b) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
(c) Assertion (A) is true, but Reason (R) is false
(d) Assertion (A) is false, but Reason (R) is true
Answer: C
Question: ‘Environment provides both constraints and opportunities’’. What is your opinion?
(a) Yes, it provides both constraints and opportunities
(b) It neither provides constraints nor provides opportunities
(c) It provides opportunities but not constraints
(d) None of these
Answer: A
Question: ‘‘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 these
Answer: B
Question: 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
Question: 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
Question: The income and expenditure policy of the government is called.
a) Fiscal Policy
b) Industrial Policy
c) Trade Policy
d) Monetary Reforms
Answer: A
Question: 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
Question: 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
Question: 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
Question: Which factor is not included in Internal Environment?
a) Objective
b) Policies
c) Public
d) Production-Method
Answer: C
Question: Globalisation aims at ____
a) All the options
b) Export Promotion
c) Foreign exchange reforms
d) Import liberalisation
Answer: All the options
Question: 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
Question: 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
Question: 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
Question: 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
Question: Privatisation of ownership through sale of equity share is called
a) Disinvestment
b) Denationalisation
c) Contracting
d) None of the options
Answer: Disinvestment
Question: 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
Question: 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
Question: 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
Question: 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
Question: Which among the following is not opened for private sector participation
a) Railways
b) Power sector
c) Telecommunication sector
d) Education sector
Answer: Railways
Question: Company images and brand equity is factor affecting business
a) Externally
b) Internally
c) Government Policy
d) None of the options
Answer: Externally
Question: Relaxing the restrictions and controls imposed on Business and industry means
a) Liberalisation
b) Privatisation
c) Globalisation
d) None of the options
Answer: Liberalisation
Question: 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
Question: 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
Question: 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.
Question: 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
Question: 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.
Question: 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
Question: ___________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
Question: How many important features of New Economic Policy, 1991
a) 3
b) 2
c) 4
d) 5
Answer: 3
Question: 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
Question: 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
Question: Globalisation aims at ____
a) All the options
b) Export Promotion
c) Foreign exchange reforms
d) Import liberalisation
Answer: All the options
Question: 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
Question: The complete awareness and understanding of business environment is called _________
a) Environmental Scanning
b) Technological advancement
c) Liberalisation
d) Privatisation
Answer: Environmental Scanning
Question: 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
Question: 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
Question: 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
Question: 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
Question: 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
Question: 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
Question: Reduction in the role of public sector is due to _________
a) Privatisation
b) Political Environment
c) Liberalisation
d) Globalisation
Answer: Privatisation
Question: 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
Question: 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
Question: 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
Question: 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
Question: Subsidy to cotton textile businesses is the __________
a) Political Environment
b) Legal Environment
c) Social Environment
d) Economic Environment
Answer: Political Environment
Question: 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
Question: Gross Domestic Product (GDP) is concerned with ____________
a) Economic Environment
b) Social Environment
c) Political Environment
d) Legal Environment
Answer: Economic Environment
Question: 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
Question: ________reduces the control of government and encourages private participation
a) Liberalization
b) Privatization
c) Globalization
d) All the options
Answer: Liberalization
Question: 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
Question: Which is not included in Specific Environment
a) Social
b) Investors
c) Customers
d) Competitors
Answer: Social
Question: The positive effects of liberalization and globalization on business and industry
a) All the options
b) All round competition
c) Export became matter of survival
d) World class technology
Answer: All the options
Question: The negative effects of liberalization and globalization on business and industry in India are
a) All the options
b) Destabilization of protected environment
c) Threat from MNCs
d) Acquisitions and mergers
Answer: All the options
Question: The Impact of changes in govt. policy on business are
a) All the options
b) Increasing competition
c) More demanding
d) Rapidly changing technology environment
Answer: All the options
Question: What are the Components of Business Environment
a) All the options
b) Internal Environment
c) External Environment
d) Micro Environment
Answer: All the options
Question: What is the importance of business
a) All the options
b) First mover advantage
c) Taping useful resources
d) Improving in performance.
Answer: All the options
Question: What are the economics reforms since 1991 or new Economics policy
a) All the options
b) Privatization
c) Liberalization
d) Globalization
Answer: All the options
Question: Which process aims at giving greater role to the private sector role to the public sector
a) Privatization
b) Liberalization
c) Globalization
d) None of the options
Answer: Privatization
Question: It is the process by which government control over the industry is being loosened. Give the term to which this statement is trying to indicate
a) Liberalization
b) Privatization
c) Globalization
d) None of the options
Answer: Liberalization
Question: Demand for reservation in jobs for minorities refers to an example of key component of general environment of business. Name this component
a) Social Environment
b) Legal Environment
c) Technological Environment
d) Political Environment
Answer: Social Environment
Question: Which environment prohibits the advertisement of alcoholic beverages
a) Legal Environment
b) Technological Environment
c) Social Environment
d) Political Environment
Answer: Legal Environment
Question: Which element / dimension of business environment involves improvement and innovations which provide new ways of producing goods and services and new methods and techniques of operating a business.
a) Technological Environment
b) Social Environment
c) Legal Environment
d) Political Environment
Answer: Technological Environment
Question: Which of the following is an example of social environment
a) Composition of family
b) Consumer Protection Act
c) Money supply in the economy
d) The Constitution of the country
Answer: Composition of family
Question: Which of the following best indicates the importance of business environment
a) All the options
b) Improvement in performance
c) Identification
d) Coping with rapid changes
Answer: All the options
Question: Which of the following does not characterise the business environment
a) Employees
b) Relativity
c) Dynamic
d) Uncertainty
Answer: Employees
Question: Which environment describes characteristics of the society in which the organization exists.
a) Social Environment
b) Legal Environment
c) Political Environment
d) All the options
Answer: Social Environment
Question: What are the features of Business Environment
a) All the options
b) Dynamic
c) Uncertainty
d) Relativity
Answer: All the options
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MCQs for Chapter 3 Business Environment Business Studies Class 12
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