CUET Business Studies MCQs Unit III Business Environment

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

a) Uncertainty

b) Employees

c) Relativity

d) Complexity

Answer: Employees

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: The extent of government intervention in business

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: Monetary Policy

Question: Globalisation aims at ____

a) All the options

b) Export Promotion

c) Foreign exchange reforms

d) Import liberalisation

Answer: All the options

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: 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: 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: 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: 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: 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: 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: What are the features of Business Environment

a) All the options

b) Dynamic

c) Uncertainty

d) Relativity

Answer: All the options

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: Composition of family

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: Yes, it provides both constraints and opportunities

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: Technical

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 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: 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: 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: Subsidy to cotton textile businesses is the __________

a) Political Environment

b) Legal Environment

c) Social Environment

d) Economic Environment

Answer: Political Environment

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: 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 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: 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: Improvement in performance

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: Business environment does not include both specific and general forces

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

a) Environmental Scanning

b) Technological advancement

c) Liberalisation

d) Privatisation

Answer: Environmental Scanning

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

a) Employees

b) Relativity

c) Dynamic

d) Uncertainty

Answer: Employees

Question: Liberalisation means

a) Integration among economies

b) Reduced government controls and restrictions

c) Policy of planned disinvestments

d) None of them

Answer: Reduced government controls and restrictions

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: Positive changes in external environment

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

a) Economic Environment

b) Social Environment

c) Political Environment

d) Legal Environment

Answer: Economic Environment

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: 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: Change in agricultural prices

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: Assertion a) is true, but Reason (R) is false

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: 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: 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: 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: 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: Business environment is a group of powers.

a) Special

b) General

c) Internal

d) Special and General

Answer: Special and General

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: Globalisation

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: Globalisation aims at ____

a) All the options

b) Export Promotion

c) Foreign exchange reforms

d) Import liberalisation

Answer: All the options

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: 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: 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: 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: Tough Competition

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: How many important features of New Economic Policy, 1991

a) 3

b) 2

c) 4

d) 5

Answer: 3

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: 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: ‘‘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: Social environment

Question: Which factor is not included in Internal Environment?

a) Objective

b) Policies

c) Public

d) Production-Method

Answer: Public

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

a) Privatisation

b) Political Environment

c) Liberalisation

d) Globalisation

Answer: Privatisation

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: “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: Social environment

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: 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: Which is not included in Specific Environment

a) Social

b) Investors

c) Customers

d) Competitors

Answer: Social

Question: Which factor is not included in Macro Environment?

a) Economic Environment

b) Competitors

c) Social Environment

d) Political Environment

Answer: Competitors

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: 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: 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: 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: Privatisation

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

a) Fiscal Policy

b) Industrial Policy

c) Trade Policy

d) Monetary Reforms

Answer: Fiscal Policy

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: ________reduces the control of government and encourages private participation

a) Liberalization

b) Privatization

c) Globalization

d) All the options

Answer: Liberalization

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: Liberalisation

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: 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. Which of the following does not characterise the business environment?
a) Uncertainty
b) Employees
c) Relativity
d) Complexity

Answer : B

Question. Liberalisation means
a) integration among economies
b) reduced government controls and restrictions
c) policy of planned disinvestments
d) None of the above

Answer : B

Question. As a foreign tourist visited India, he noticed that Indian markets, tastes, trends and regulations were different from that of his country. Which feature of business environment is ref lected here?
a) Business environment has uncertainty
b) Business environment is dynamic
c) Business environment is a relative concept
d) All of the above

Answer : C

Question. Identify the examples of changes in business environment that affect business enterprises.
a) Increase in taxes by government can make products expensive, causing reduced demand
b) Change in taste and fashion may shift demand
c) Technological improvements may render existing products obsolete
d) All of the above

Answer : D

Question. ‘‘Nothing can be said with certainty about the factors of business environment’’. Why?
a) Because business environment is simple
b) Because business environment is dynamic
c) Because business environment is certain
d) Because business environment is inter-related

Answer : B

Question. Business environment is ............., as it consists of inter-related factors affecting business enterprises at the same time.
a) simple
b) complex
c) dynamic
d) Either (a) or (c)

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. Which of the following option correctly describes the difference between specific and general forces of business environment?
a) Specific forces affect the individual enterprise directly, whereas general forces have indirect impact on all business enterprises
b) General forces have direct impact on individual enterprise, whereas specific forces have indirect impact on business enterprise.
c) Specific forces does not affect an enterprise at all, whereas general forces affects directly on all business enterprises
d)None of the above

Answer : A

Question. Demand for LED TVs are increasing day by day. Thus, TV manufacturers have started making LED TVs instead of LCD. Identify the significance of business environment being portrayed in the given case.
a) Helpful in tapping useful resources
b) Helps the firm to identify threats and early warning signals
c) Helps in coping with rapid changes
d) All of the above

Answer : C

Question. ........... assists in planning and helps in policy formation.
a) Group dynamics
b) Business environment
c) Turn around management
d) None of the above

Answer : B

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. Which of the following is not a challenge faced by business due to LPG policy changes?
a) Increasing competition
b) Rapid changes in technological environment
c) Lesser need for developing human resources
d) None of the above

Answer : C

Question. Obstacles to privatisation are
a) opposition by labourers
b) problem of financing
c) political pressure
d) All of the above

Answer : D

Question. .......... refer to changes and inclination towards new products.
a) Traditions
b) Values
c) Trends
d) None of these

Answer : C

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 the above

Answer : D

Question. Which dimension of business environment is concerned with improvement and innovations, which provides new ways of producing goods and services?
a) Technological environment
b) Economic environment
c) Legal environment
d) None of the above

Answer : A

Question. ‘‘Trends refer to changes and inclination towards new products and services’’. This statement describes significant effect of which environment on business?
a) Economic environment
b) Social environment
c) Political environment
d) None of these

Answer : B

Question. Just after declaration of Lok Sabha elections 2019 results, the Bombay Stock Exchange price index rose by 2800 points in a day. This statement signifies the effect of which environment?
a) Technological environment
b) Political environment
c) Legal environment
d) Economic environment

Answer : B

Question. Business enterprises cannot work in
a) isolated environment
b) complex management
c) uncertain management
d) None of these

Answer : A

Question. Which dimension of business environment requires putting a statutory warning on the packets of tobacco products?
a) Technological environment
b) Economic environment
c) Legal environment
d) All of the above

Answer : C

Question. “Spirit of invention and innovation among people” is the component of which environment?
a) Legal environment
b) Technological environment
c) Social environment
d) Economic environment

Answer : B

Question. Which of the following statements regarding privatisation is correct?
a) Privatisation is panacea for all economic problems
b) Privatisation always leads to attaining social and economic efficiency
c) Privatisation may result in unbalanced development of industries in the country
d) None of the above

Answer : C

Question. What is included in legal environment of business?
a) Several acts passed by government
b) Court judgements
c) Statutory warning prescribed under law
d) All of the above

Answer : D

Question. Managers needs to be dynamically competent for all the changes happening in the environment. In the music industry. CDs were major source of entertainment in the past but gradually video cassettes replaced them. So, managers had to adopt in their organisation accordingly. Identify the environment change highlighted here.
a) Social environment change
b) Technological environment change
c) Economic environment change
d) Both (a) and (b)

Answer : B

Question. Many multinational food joints such as Mc Donalds, Domino’s etc have altered their menu according to Indian taste and culture. Name the dimension of business environment which is responsible for this step.
a) Social
b) Legal
c) Political
d) Economic

Answer : A

Question. Liberalisation, globalisation and privatisation are the aims of
a) economic planning
b) land reforms
c) socialistic pattern of society
d) economic reforms

Answer : D

Question. The ……… means the sum total of all individuals, institutions and other forces that are outside the control of a business enterprise but that may affect its performance.
a) management principles
b) business environment
c) economic environment
d) social environment

Answer : B

Question. Fiscon Electricals Ltd was operating its business in London. The company started exporting its products to India when the Prime Minister announced relaxation in import duties on electrial products. The company also appointed retailers in India who had a direct on-line links with the suppliers to replenish stocks when needed. Identify the dimension(s) of business environment highlighted in the given case.
a) Economic environment
b) Political environment
c) Both (a) and (b)
d) None of the above

Answer : C

Question. Seeing the need of connecting restaurants/food outlets to people, Zomato established its app as a food delivery platform. Which importance of business environment is highlighted here?
a) It enables the firm to identify opportunities and getting the first mover advantage
b) It helps in tapping useful resources
c) It helps in coping with rapid changes
d) It helps in improving performance

Answer : A

Question. Hon’ble Prime Minister Shri Narendra Modi initiated and coined the slogan “Make in India.” Which dimension of business environment does this pertain to?
a) Economic environment
b) Political environment
c) Legal environment
d) Social environment

Answer : B