Business Environment MCQ for NET Exam with Answers is also helpful for BBA, MBA, BCOM, and MCOM regular and distance mode examinations.
1. In the modern outlook, profit maximization is a primary motive of business.
2. What people think of an organization’s actions is called:
a) Public image
b) Public visibility
Ans: a) Public image
3. The three main elements of a society that have a direct impact on business are:
(i)___ (ii) ___and (iii) ___
Ans: (i) Family, (ii) Educational institutions, (iii) Religion
4. ___ developed the code of ethics which uses four questions for any ethical issue a business faces.
Ans: Rotary International
5. Business environment refers to the external forces operating on an organization.
6. The two most powerful institutions in society today are business and government.
7. India started moving towards Liberalism in 1988.
Ans: False ideology
8. Apolitical system is based on the ___ of the ruling government.
Ans: Sovereign, territory.
9. A State is a ___ entity, which occupies a well-defined ___.
Ans: sovereignty, political
10. In a capitalistic system, the consumer is regarded as ___.
11. The process through which the prices of goods and services are determined by the market forces of demand and supply in a capitalist economy is called ___.
Ans: Price mechanism
12. The ___ motive which is an integral part of the capitalist economy motivates the producers to undertake production.
13. In a capitalist economy, there is ___ interference by the government in economic activities.
14. Extreme form of socialism is called ___.
15. A financial system provides a mechanism by which savings are transformed into ___.
16. Legal environment of business refers to a ___ laid down by law.
Ans: code of conduct
17. The legal environment of a nation comprises ___ enacted by a competent authority.
Ans: laws, rules, and regulations
18. The Companies Act, of 1956 applies to universities, co-operative societies, unincorporated trading, scientific and other societies.
19. The Indian Contract Act, of 1872, contains provisions for breach of contract.
20. In reference to the Industrial Policy Resolution of 1948, the government recognized the need for a ___ economy.
21. The extent and nature of State intervention may vary from country to country.
22. The government performs intermediary and activist functions in an economy.
23. The Government plays four major roles in an economy.
24. India was experiencing large and persistent ___ since the eighties.
Ans: macroeconomic imbalances
25. Fiscal and trade deficits enjoy a ___ relationship.
26. Government expenditure can be studied in ___ phases.
27. The Hindu rate of growth was ___%.
28. India faced an economic crisis in ___.
29. The Great Depression that affected the American economy was in the year ___
30. The process of dismantling governmental regulations and control is known as ___.
31. The process of the sale of equity of public sector units to the private sector is ___.
32. State true/ false: The process of integrating with the global economy means the Government has no role to play.
33. Name the policy that marked the beginning of economic reforms in India. ___
Ans: Industrial Policy Statement of 1991
34. State true/ false: The MRTP Act has been abolished.
35. Non-profitable or sick units are referred to as ___.
36. The IPR 1956 put too much importance on the public sector.
37. The thrust of the Industrial Policy of 1977 was on the effective promotion of Cottage and small industries.
38. The concept of District Industrial Centers was introduced for the first time in the Industrial Policy of 1977.
39. The Industrial Policy of 1977 was introduced by the Congress government.
40. The Industrial Policy of 1980 made changes in favour of ___ business houses.
41. A more ___ intensive path of development was chosen in the Industrial Policy of 1980.
42. The Industrial Policy of 1980 was the first step towards ___.
43. Which of the following statement is correct about the New Economic Policy 1991?
a) It made it compulsory for the industries to obtain a license for all projects.
b) It abolished licensing for all projects except 18 industries of strategic and security importance.
c) It gave the dominant position to the public sector.
d) None of the above.
44. At present there are only ___ industries for which licensing is compulsory.
45. Under the New Economic Policy,1991:
a) The mandatory convertibility clause is applicable to all term loans.
b) The mandatory convertibility clause is applicable to term loans of more than 10 years.
c) The mandatory convertibility clause is applicable to term loans of less than 10 years.
d) The mandatory convertibility clause is no longer applicable.
46. ___ refers to the transfer of assets from public to private ownership.
47. At present only ___ industries are exclusively reserved for the public sector.
48. The government had to opt for Privatisation because the ___ sector was not efficient.
a) Private sector
b) Public sector
c) Joint sector
d) Corporate sector
49. ___ means integrating the domestic economy with the world economy.
50. The salient features of the New Economic Policy 1991 are:
d) All of the above
51. The ___ sector was given a dominant position in the newly independent India.
52. Disinvestment is one of the ___ of privatization.
53. ___ refers to the transfer of assets from public to private ownership.
54. Disinvestment means privatization through the sale of ___.
55. ___ refers to the selling of a public sector unit’s equity in the market.
Ans: d) Disinvestment
56. Which of the following statements regarding Privatization is correct?
a) Privatization is the solution to all problems.
b) Privatization leads to attaining social and economic efficiency.
c) Privatization leads to sacrificing future streams of income.
d) None of these.
Ans: c) Privatization leads to sacrificing future streams of income.
57. The disinvestment of BALCO took place in February 2001, and Sterlite Industries became the single largest private stakeholder in the process.
58. Privatization increases the interference of government and political parties in business.
59. The government policy in India on privatization has evolved from selling minority shares in 1991-92 to an emphasis on strategic sales during the late 1990s.
60. Privatization leads to increased efficiency and greater profitability.
61. Globalization is a process of development of the world into a ___ integrated economic unit.
62. Globalization is the term used to describe the process of removal of restrictions on ___ and ___.
Ans: Foreign trade and investment
63. Along with globalization, foreign companies have entered developing countries.
64. Globalization is the outcome of free trade and the lowering of tariffs.
65. Globalization involves no risk.
66. When competition levels become higher, there is an apprehension that inefficient units may close down.
67. WTO stands for.
a) World Trade Organisation.
b) World Transport Organisation.
c) World Tariff Organisation.
d) Women Teachers Organisation.
68. ___means integrating the domestic economy with the world economy.
69. Globalization has brought to the Indian Economy,
a) More Foreign Direct Investment
b) More growth in the GDP.
c) Progress in communication, transportation, and information technology.
d) All of the above.
70. Match the following
|A. WTO||I. Provides loans to address the short-term balance of payment problems|
|B. RBI||II. Multilateral trade negotiating body|
|C. IMF||III. Facilitating lending and borrowing for reconstruction and development|
|D. IBRD||IV. Central Bank of India|
Ans: A- II , B- IV, C- I , D- III
71. According to IPR, 1948, the government reserved ___ only for arms and ammunition, atomic energy, and railways.
72. The IPR, 1956 laid down three categories, of which Schedule A included industries exclusively as State responsibility.
73. The IPR, 1956 emphasized the role of large-scale industries in the development of the economy and in providing employment.
74. Godrej industries look at CSR as ___.
75. The motto of P&G‟s social project is ___.
Ans: business with a purpose
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