MCQ on Business Environment – Sample Notes with Answers for Business Environment pdf for MBA, BBA, Mcom, and Bcom Examinations.
Business Environment MCQ with Answers
1. A firm aims towards ___ allocation of resources limited in supply with alternative uses.
2. Managers face situations requiring ___ making skills.
3. Select the right option:
Consumption, production, distribution, and exchange are all ___ activities. (economic/ support)
4. An economic unit transforms ___ into output.
b) raw materials
Ans. a) inputs
5. The ___ environment refers to the factors that affect the consumers‟ purchasing power.
Ans. a) economic
6. The most difficult forces to control are socio/cultural forces.
7. The demographic environment is part of the ___ environment. (Micro/ macro)
8. SWOT analysis is an acronym for ___, ___, ___, and ___.
Ans. Strengths, weaknesses, opportunities, threats
9. Over time, intangible resources become more important than tangible resources.
10. The current or emerging trends in lifestyle and fashions refer to ___ analysis.
11. Inflation is a ___ in the general level of ___ of goods and services in an economy over a period of time.
Ans. rise, prices
12. Aggregate demand (AD) is the total ___ for final ___ and ___ in the economy at a given time and ___.
Ans. demand, goods, services, price level
13. Money supply consists of ___ with the public, and ___ ___ with the public.
Ans. Currency, Demand deposits
14. Select the right option:
A country’s balance of payments is a record of its ___ with the rest of the world. (economic transactions, non-economic transactions, both of these)
Ans. economic transactions
15. Rostow produced a ___ stage model of economic ___.
Ans. five, takeoff
16. World Bank has divided economies into ___, ___, ___, and ___ Economies according to the country’s ___.
Ans. Low-income economies, Lower middle income, Upper middle income, High income, GNI per capita.
17. Fiscal Policy is a tool, used by the Government, to influence the level of GDP in the short run by using ___ and ___.
Ans. Taxes, Government Spending
18. The direct buying and selling of government securities and bills in the money market by the Reserve Bank with the objective of expansion or contraction of credit and economic activity are known as ___.
Ans. open market operations
19. Select the right option:
This fiscal policy is used to cure the recession. (contractionary, expansionary, Both of these)
20. The ___ rate is charged by the Reserve Bank for giving loans to commercial banks.
21. Select the right option:
Expansionary policies involve:
i) Tax cuts
ii) Increased spending
iii) Increases in money supply to raise the level of GDP and
iv) Reduce Unemployment
v) All of the above
Ans. All of the above
22. A policy mix that consists of a ___ in government spending and an___in money supply would favour investment spending over government spending.
Ans. Decrease, increase
23. International factors such as ___ and ___ affect the business environment.
Ans. exchange rate, foreign income
24. An expansionary monetary policy will cause interest rates to ___.
25. Fill in the blanks:
The different elements of culture are language, ideals, values, religions and beliefs, ___, status and roles, ___ and preferences.
Ans. Social collectives, cultural integration
26. Differentiation based on criteria as age, sex, caste, occupation, education is called ___.
27. The energy crisis has led us to think in terms of modifying our energy policy and more research in alternative energy resources. This is a form of
a) Cultural adaptation
b) Cultural transmission
c) Cultural shock
d) Organisation of culture
Ans. a) cultural adaptation
28. All proposals which are not eligible for the RBI’s automatic approval are required to get the Government’s approval through the ___ and Foreign Investment Promotion Board (FIPB).
Ans. Secretariat for Industrial Approval (SIA)
29. In Indian business culture, business development largely depends upon relationship building.
30. Indians do not say “no” directly, as it is often considered rude.
31. Which of the following statements are true regarding Indian culture?
a) Indians are known for their hospitality
b) people usually respond with an outright “yes”
c) in general in India people take criticism well
Ans. a, b
32. When decision-making is done by the top managers, it is centralized decision-making.
33. Rewards to employees may be given individually or as a group.
34. Market share and technological developments are long-term goals.
35. Technology is an important determinant of change.
36. In the modern outlook, profit maximization is a primary motive of business.
37. Select the right option.
What people think of an organization‟s actions are called:
a) Public image
b) Public visibility
Ans. a) Public image
38. The three main elements of a society that have a direct impact on business are 1. ___, 2. ___, and 3. ___
Ans. 1. Family, 2. Educational institutions, 3. Religion
39. ___ developed the code of ethics which uses four questions for any ethical issue a business faces.
Ans. Rotary International
40. Business environment refers to the external forces operating in an organization.
41. In a capitalistic system, the consumer is regarded as ___.
42. The two most powerful institutions in society today are business and government.
43. India started moving towards Liberalism in 1988.
44. Apolitical system is based on the ___ of the ruling government.
Ans. Sovereign, territory.
45. A State is a ___ entity, which occupies a well-defined ___.
Ans. sovereignty, political
46. A State exercises its ___ through a ___ system that governs its people.
47. The fundamental Right to Property was granted under Article 19(1) (f).
48. The ___ of State Policy are directions to the Legislature and Executive that they should exercise their authority in accordance with these principles.
Ans. Directive principles
49. By the amendment of 1976, India became ___.
Ans. A socialist economy
50. India faced a balance of payments crisis in ___.
51. India embarked on a series of economic reforms in ___.
52. India has a ___ political system.
53. India offers a safe business scenario to entrepreneurs.
54. Doing business in India is a time-friendly proposition.
55. Inadequate infrastructure is a major obstacle that business faces in India.
56. Allocation of productive resources is done under socialism by the ___.
Ans. Planning authority
57. Income ___ which mostly arises from private property does not exist under socialism.
58. Economic ___ has replaced the price mechanism under a socialist economy.
59. A mixed economy combines the elements of both the ___ and the ___ economies.
Ans. Capitalist, socialist
60. Instead of competing, the private sector ___ the public sector in a mixed economy.
61. In a mixed economy the ___ sector regulates the ___ sector.
Ans. Public, private
62. The ___ is the chairman of the Planning Commission in India.
Ans. Prime Minister
63. The ___ motive which is an integral part of the capitalist economy motivates the producers to undertake production.
64. In a capitalist economy, there is ___ interference by the government in the
65. Extreme form of socialism is called ___.
66. 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
67. Financial markets are of three types.
68. Financial instruments are legal documents that represent monetary value.
69. Match the following group A with group B:
|Group A||Group B|
|i) Financial system works||i) by the financial laws of a government authority.|
|ii) The financial institutions are generally regulated||ii) primarily to individual consumers.|
|iii) A building society is a financial institution||iii) manage various securities and assets|
|iv) Retail banking service caters||iv) with the help of financial institutions.|
|v) The asset management firms||v) owned by its members rather than by shareholders|
|Group A||Group B|
|i) Financial system works||iv) With the help of financial institutions.|
|ii) The financial institutions are generally regulated||i) By the financial laws of a government authority.|
|iii) A building society is a financial institution||v) owned by its members rather than by shareholders|
|iv) Retail banking service caters||ii) Primarily to individual consumers.|
|v) The asset management firms||iii) Manage various securities and assets.|
70. The Reserve Bank of India was established in the year ___.
71. The commercial banks in India are categorized into ___, private banks and public sector banks.
Ans. Foreign banks
72. The two most important credit rating agencies in India are ___ and ICRA.
73. SEBI was founded in 1992 to protect the interest of ___.
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