Business Environment Questions and Answers





Business Environment solved MCQ Questions :

The Business Environment is the collective impact of external factors on a business, such as customers, competitors, and market conditions. This section focus on all topics of the Business Environment subject. Here you can get important mcq questions on Business Environment with answers. These questions will help you to prepare for interviews, entrance exams, online tests, and semester exams. These Business Environment multiple choice questions are for both freshers and experienced candidates.

Business Environment MCQ Chapter Wise :

Here you will find a list of important questions and answers with detailed solution on business environment in MCQ quiz style for competitive exams and interviews. Here, You can practice these MCQs chapter-wise for FREE.

Below section consists of important multiple choice questions on business environment with answers -:

1. In which production India has attained self-sufficiency?
a) Fertilizers
b) Edible oil
c) Petroleum
d) Food grains

Answer: d

2. Closed economy is one in which
a) Only export takes place
b) Neither exports nor imports take place
c) Money supply is fully controlled
d) Exchange rates are under a full control of the government

Answer: b

3. The largest share in India's national income is from
a) Service sector
b) Agriculture sector
c) Manufacturing sector
d) Trade sector

Answer: a

4. Which of the following countries per capita income is the highest?
a) India
b) Bangladesh
c) Thailand
d) Pakistan

Answer: c

5. Which of the following is not a fundamental right enshrined in the Indian Constitution?
a) Right to freedom of religion
b) Right to equality
c) Right to equal pay for equal work for men as well as women
d) Right to freedom of thought and expression

Answer: c

6. Among the supply side measures to control inflation is
a) Curtailing public expenditure
b) Mopping up excess liquidity through taxation
c) Credit control measures of RBI
d) Maintaining price levels through 'administered price mechanism' and 'effective PDS'

Answer: d

7. Which of the following is the most integrated form of regional economic arrangement?
a) Customs union
b) Economic union
c) Free trade area
d) Multilateral trading area

Answer: b

8. Which of the following items is not included in a country’s balance of payments?
a) Shipping services
b) Interest received from abroad
c) Import and export duties
d) Tourists expenditure

Answer: c

9. A situation where a country exports a product at a price below its cost of production.
a) Full cost pricing
b) New protectionism
c) Dumping
d) Price skimming

Answer: c

10. Coca Cola is a good example of a ___________________ MNC (Multinational Corporation)
a) conglomerate
b) free-standing
c) vertically integrated
d) horizontally integrated

Answer: a

11. Which of the following is NOT likely to be a benefit that host countries will obtain from MNCs?
a) Technology transfer
b) Import substitution
c) The ability to impose high tax rates on them
d) Job creation

Answer: a

12. Which of the following can be a disadvantage to the host country of MNC investment:
a) Drives out domestic competitors
b) Sends profits abroad
c) Threatens to leave if not "helped".
d) Imports components

Answer: a

13. National Income estimates in India is prepared by
a) Planning Commission
b) RBI
c) Finance Ministry
d) C.S.O

Answer: d

14. Black money in India
a) Raises domestic prices
b) Encourages lavish consumption
c) Causes loss of revenue to the exchequer
d) Effects all of the above

Answer: d

15. Mixed economy means
a) Co–existence of small and large industries
b) Promoting both agriculture and industries in the economy
c) Co–existence rich and poor
d) Co–existence of public and private sectors

Answer: d

16. Income tax is an item of
a) Concurrent List
b) State list
c) Union List
d) Residuary List

Answer: c

17. Inflation, in theory occurs
a) When prices of essential commodities outstrip income
b) When money supply grows at a higher rate than GDP in real terms
c) When exchange rate of domestic currency falls in foreign exchange markets
d) When fiscal deficit exceeds balance of payments deficit

Answer: b

18. The objective of case-study is
a) Remedial
b) Diagnostic
c) Educational
d) All of the above

Answer: c

19. Which of the following regulates the working of stock markets in India?
a) FEMA
b) RBI
c) SEBI
d) Ministry of Finance

Answer: c

20. Find the odd one out
a) IOCL
b) HPCL
c) ONGC Ltd.
d) ESSAR OIL

Answer: d

21. The main watchdog of international trade is
a) IMF
b) World Bank
c) WTO
d) UNCTAD

Answer: c

22. Who is the Chairman of NDC?
a) Finance Minister
b) Prime Minister
c) Lok Sabha Speaker
d) Minister of Planning

Answer: b

23. India is not a member of
a) G-15
b) ASEAN
c) UNO
d) ILO

Answer: b

24. Stagflation means
a) Inflation with recession
b) Recession and stagnation
c) Inflation galloping like a stag
d) Inflation and increasing output

Answer: a

25. 'Level playing field' argument of industries requires
a) MNCs to be stopped from investing in India
b) Licence to MNCs be given only in environment-friendly technologies
c) MNCs to be treated at par with the domestic industry
d) Domestic industry to be given preference over MNCs.

Answer: c

26. Which two of the following are the most likely effects of the imposition of a tariff on an imported good ?
a) The domestic price of the imported good will fall
b) Overseas production of the good may be stimulated
c) Overseas employment will rise
d) The domestic price of the imported good will rise
e) Gain of tax revenue by the government
a) (c) and (d)
b) (a) and (c)
c) (d) and (e)
d) (b) and (d)

Answer: c

27. Which two of the following arguments are most likely to be used to justify protectionism?
a) To protect high cost domestic industries
b) To protect strategically important industries
c) To protect industries which are still immature
d) To maximise government tax revenue
e) To protect environmental standards
a) (d) and (e)
b) (a) and (b)
c) (c) and (d)
d) (b) and (c)

Answer: d

28. A protectionist measure whereby members of a regional trading bloc agree to impose an identical rate of protection on all goods imported from non-member countries
a) Common quota arrangements
b) Non-tariff agreement
c) Technological standards control
d) VER agreements

Answer: b

29. A situation where any advantage given by one member of the WTO to another member must be extended to all WTO members.
a) The excessive invoicing principle
b) The intra-regional principle
c) The trade diversion principle
d) The most favoured nation principle

Answer: d

30. MNCs are in a good position to vary their strategies in different phases of the product life cycle. For instance in the ______________ phase(s) they will usually ___________
a) decline, maintain high prices
b) launch, move production to low-cost countries
c) growth and maturity, move production to low-cost countries
d) growth, maintain high prices

Answer: c

31. When MNCs reduce their tax bill in different host countries this is usually done by a technique called:
a) Technology transfer.
b) Transfer pricing
c) Import substitution
d) Product switching.

Answer: b

32. Banking sector will fall under which of the following sectors?
a) Agricultural sector
b) Service sector
c) Manufacturing sector
d) Industrial sector

Answer: b

33. The Plan Holiday refers to the period
a) 1965-68
b) 1966-69
c) 1967-70
d) 1978-80

Answer: b

34. The New Economic Policy launched in 1991 consist of
i) Stabilization policy
ii) Import control policy
iii) Deficit financing
iv) Structural adjustment policy
a) i. only
b) i, iii. and iv.
c) ii. and iv.
d) i. and iv

Answer: d

35. An MNC (multinational company or corporation) can be defined as a firm which:
a) Is beyond the control of any government
b) Is one of the largest 200 firms in the world
c) Operates directly or owns subsidiaries in more than one country
d) All of the above

Answer: c

36. Which two of the following are regarded as the main aims of the World Trade Organisation (WTO)?
a) To eliminate discrimination in world trade
b) To provide financial assistance to countries with debt
c) To reduce tariff barriers
d) To make 'infant industry' protection illegal
e) To help give preferences to smaller economies
a) (b) and (d)
b) (a) and (c)
c) (d) and (e)
d) (b) and (d)

Answer: b

37. In a flexible exchange-rate system, an increase in the domestic interest rate would tend to
a) Improve the current account and worsen the capital account
b) Improve the capital account and worsen the current account.
c) Improve both the current and the capital accounts.
d) Worsen both the accounts.

Answer: c

38. India has
a) Parliamentary form of government
b) Presidential form of government
c) Both parliamentary and presidential form of government
d)None of these

Answer: a

39. The President of India is elected by
a) Parliament (i.e. both the Lok Sabha and the Rajya Sabha)
b) By an Electoral College comprising of the elected members of the Lok Sabha, the Rajya Sabha and the State Legislatures.
c) Together by the Central and the State governments
d) By the people directly

Answer: b

40. VAT is imposed
a) Directly on consumer
b) On final stage of production
c) On first stage of production
d) On all stages of production up to the final sale

Answer: d

41. Business comprises all ______________ seeking activities and enterprises that provides goods and services necessary to an economic system.
a) Profit.
b) Loss.
c) Production.
d) None of these.

Answer: a

42. ______________ are the directives to the various government and non government agencies and are fundamental in the governance of the country.
a) State policies.
b) Fundamental rights.
c) Directive principles.
d) Fundamental Rules

Answer: c

43. The main objective of society and business is ______________.
a) economic and social objective.
b) cultural objective.
c) technological objective.
d) non objective.

Answer: a

44. Self fulfillment and immediate gratification _______________ cultural values.
a) decreases.
b) rises.
c) diminishes.
d) slow down.

Answer: b

45. Developments banks are otherwise called as______________.
a) LIC.
b) UTI.
c) DFI.
d) Barter.

Answer: c

46. _______________ change is a potent form for the reconfiguration of industrial boundaries.
a) Technological.
b) Economical.
c) Organizational.
d) Environmental.

Answer: a

47. ________________________ state can have an elected or hereditary head.
a) Democratic.
b) Autocratic.
c) Socialized.
d) None of the above.

Answer: a

48. Business environments is encompassed as the climate or set of condition, Economics, social (or) institutional in which business _______________ are conducted.
a) operations.
b) customs.
c) rituals.
d)meetings.

Answer: a

49. Todays business is not characterized by _________________.
a) diversification.
b) loss.
c) fight.
d) conflict

Answer: a

50. Competition is beneficial to the competing firms besides benefiting the ______________.
a) producers
b) intermediaries
c) finances.
d) consumers

Answer: d

51. Goals realization continuously will lead to ______________?
a) mission fulfillment.
b) maximum customers.
c) high revenue.
d) low revenue.

Answer: a

52. Micro environment is also known as _______________.
a) Direct.
b) Indirect.
c) Same.
d) Fine.

Answer: a

53. Political environments refers to the influence exerted by the ______________ political institutions?
a) 2
b) 3
c) 4
d) 5

Answer: b

54. ______________ plays the watch dog in order to ensure that both function in public interest and within the boundaries of constitution
a) Legislature.
b) Executive.
c) Judiciary.
d) None of the above.

Answer: c

55. ______________ stresses the negative consequences of failure to study the environment
a) William F.glueck.
b) Lawrence R.jauch.
c) Jothi
d) None of the above

Answer: c

56. ______________ involves a degree of purposefulness by manager as he receives information inputs
a) Informal research.
b) Formal research.
c) Indirect viewing.
d) Conditioned Viewing.

Answer: d

57. _______________ stresses the philosophy of individualism believing in private ownership.
a) Capitalism
b) Socialism.
c) Marxism.
d) Developism

Answer: a

58. In communism the _______________ determines ones employer and employment.
a) state.
b) country.
c) business.
d)people.

Answer: a

59. Governments policy towards industries is called as ______________.
a) economic policy
b) industrial policy
c) monetary policy.
d) work policy.

Answer: b

60. One of the objectives of licensing is to protect ______________ industries against competition of large scale industries.
a) small scale.
b) medium scale.
c) low scale.
d) high scale.

Answer: a

61. The institutionalization involves in _______________ steps.?
a) 2
b) 3
c) 4
d) 5

Answer: b

62. The techniques of privatization are contract ______________ and concession
a) building.
b) free.
c) leases.
d) hire purchase.

Answer: c

63. _____________________ gives financial assistance to small scale industries
a) NABARD
b) SIDCO
c) MSME.
d) SME

Answer: a

64. A stock exchange is a market where securities are ________________.
a) bought.
b) sold.
c) bought and sold.
d) none of the above.

Answer: c

65. ______________ include knowledge, belief, moral and customs acquired by an individual as a Member of a society
a) Culture.
b) Structure.
c) Change
d) Environment

Answer: a

66. One spirit of collectivism and individualism is related to ______________ aspects as employee morale.
a) personnel.
b) management.
c) cultural.
d) social.

Answer: a

67. Ackermans model is one of the ______________ responsibility models
a) social.
b) cultural.
c) environmental.
d) management.

Answer: a

68. Technology reaches people through business by different _______________
a) machines.
b) people.
c) culture
d) value.

Answer: a

69. ____________________ is the position taken by companies that meet their social responsibilities as directed by the law.
a) Social response.
b) Social awareness.
c) Social interest.
d) Social welfare.

Answer: a

70. The basic objective of the technology policy will be development of indigenous technology and adaptation of imported technology appropriate to ______________ priorities.
a) national.
b) international.
c) interest.
d) need.

Answer: a

71. ______________ is a statement which derives the role that an organization plays in a society.
a) Goals.
b) Mission.
c) Objective.
d) Success.

Answer: b

72. ______________ stresses the philosophy of individualism believing in private ownership of all agents of production.
a) Socialism.
b) Communism.
c) Capitalism.
d) Nanoism.

Answer: a

73. What is the main occupation of Kshatriyas?
a) Engaged in cleaning.
b) Engaged in trade.
c) Engaged in army work.
d) Engaged in ruling

Answer: d

74. Reserve Bank of India introduced certificates of deposit in ______________.
a) 1964.
b) 1989.
c) 1986.
d) 1990.

Answer: b

75. Ackerman s model is _______________ model
a) social responsibility.
b) computer.
c) employee.
d) science

Answer: a

76. Obsolescence means ________________ of products.
a) implementation.
b) outdated.
c) assessment.
d) none of the above.

Answer: b

77. The _______________ diversification refers to the process of adding new, but related products or serices.
a) concentric.
b) judiciary.
c) justice.
d) culture.

Answer: a

78. ______________ is a primary mechanism for motivating business activities.
a) Social relationship.
b) Profit.
c) Customers.
d) Assets.

Answer: b

79. The ________________ is that part of the enacted environment which the organisation carves out for itself.
a) Technology.
b) Machine.
c) domain.
d) man.

Answer: c

80. Competition is beneficial to the competing firms besides benefiting the ______________.
a) producers.
b) intermediaries.
c) finances.
d) consumers.

Answer: d

81. Profit making is the _______________ goal of any business enterprise?
a) primary.
b) secondary.
c) fixed.
d) non fixed.

Answer: a

82. Macro environment consist of ______________ environment.
a) public.
b) political and legal.
c) suppliers.
d) customers.

Answer: b

83. A ________________ contract is where the company contracts with a foreign entity to design and build an entire operation.
a) Legislature.
b) Executive.
c) Judiciary.
d) Turnkey.

Answer: d

84. Is a stable and dynamic political environment is indispensable for _______________ growth?
a) business.
b) human.
c) child.
d) politics.

Answer: a

85. The entry barrier refers to the ease with which firms can enter an industry?
a) Firms.
b) Vehicles.
c) People.
d) Workers.

Answer: a

86. ______________ refers to the managers exposure and perception of information that has no specific purpose.
a) Informal research.
b) Formal research.
c) Indirect viewing.
d) Conditioned viewing.

Answer: c

87. Marxism ________________ was followed in Russia and China.
a) contact.
b) principles.
c) food.
d) customs.

Answer: b

88. One of the long term objectives of the five year plan is ______________ of wealth and income.
a) inequalities.
b) equality.
c) freeness.
d) permission.

Answer: a

89. One of the objectives of industrial policy is to accelerate the rate of economic Growth and speed up.
a) industrialization.
b) liberalization.
c) protestation.
d) germination.

Answer: a

90. The legislative frame work for industrial licensing is provided by the ______________ development and Regulation act.
a) industries.
b) small scale.
c) labor.
d) owner.

Answer: a

91. There are ______________ sins of privatization.
a) 5
b) 6
c) 7
d) 8

Answer: a

92. Seed margin money scheme objective is to _______________.
a) reduce the incidence of sick units.
b) reduce the power cut.
c) reduce the loss.
d) increases the profit.

Answer: a

93. A ______________ is speculation who buys shares for selling them for higher price.
a) tejiwala.
b) mandiwala.
c) stage.
d) bear.

Answer: a

94. Culture tends to put a _______________ stamp upon them.
a) problem.
b) personality.
c) perception.
d) plan.

Answer: b

95. Women now enjoy equal status with men in their education and ______________.
a) profession.
b) parliament.
c) culture.
d) social.

Answer: a

96. ______________ is the position taken by the companies which believe in deep obligation to serve the society.
a) Social contribution.
b) Social obligation.
c) CSR.
d) Social response.

Answer: c

97. Customers the element of BE comes under the category of _______________.
a) macro environment.
b) micro environment internal.
c) internal Environment
d) none of the above.

Answer: b

98. Monitoring in environment analysis involves tracking of environment trends, sequence of events of _______________.
a) activities.
b) construction.
c) destruction
d) peace making.

Answer: a

99. Oxides of nitrogen & carbon monoxide are known as air ______________ causing and damaging to human health
a) pollution.
b) catalysts.
c) oxidizes.
d) photosynthesis.

Answer: a

100. Fundamental rights are ______________ in character.
a) negative.
b) positive.
c) humble.
d) polite.

Answer: a