Business Environment MCQs

Business Environment is the sum total of all the internal and external factors that creates an impact on the business. It is referred to as the collection of all individuals and entities that may or may not be under the control of the organisation, but which can have a greater impact on the performance, growth, profitability and in some cases survival of the organisation.

Business environment helps in determining the various business opportunities, resources and also assists in forming plans for the growth of the organisation.

The components of a business environment can be media, customers, government, economic conditions, suppliers, competitors etc. There are two types of environment within the business environment which are known as micro environment and macro environment.

Following are some of the business environment multiple choice questions and answers that will help the students in brushing up their understanding of the concept of business environment.

Q1. Liberalization means

A. Free determination of interest rates

B. Liberating the industry, trade and economy from unwanted restrictions

C. Opening up of economy to the world by attaining international competitiveness

D. Reducing number of reserved industries from 17 to 8

Answer: B

Q2. When a company taken over another one and clearly becomes the new owner, the action is called

A. Acquisition

B. Merger

C. Strategic Alliance

D. None of the above

Answer: A

Q3. By which act does the government check restrictive trade?


B. FEMA act

C. Industrial Policy Act 1991

D. None of these

Answer: A

Q4. Which among the following is not opened for private sector participation

A. Railways

B. Telecommunication sector

C. Education sector

D. Power sector

Answer: A

Q5. Which among these can be the condition for the success of privatisation?

A. Measurability of performance

B. Alternative institutional arrangements

C. Barriers to enter the market

D. All of the above

Answer: C

Q6. Which among these is monopolistic trade practice?

A. Manufacturing only one product

B. Selling only one product

C. Limiting technical Development

D. Unreasonably limiting competition

Answer: A

Q7. The Industrial policy resolution was passed first in

A. 1947

B. 1956

C. 1931

D. 1999

Answer: B

Q8. Globalisation is the term used to describe process of removal of restriction on

A. Investment

B. Foreign Trade

C. Both (A) and (B)

D. None of the above

Answer: C

Q9. Laissez Faire policy is adopted in

A. Socialist Economic system

B. Capitalist Economic system

C. Communist Economic System

D. Mixed Economic System

Answer: B

Q10. Which one is not the main objective of Fiscal Policy in India?

A. To promote employment opportunities

B. To minimize the inequalities of income and wealth

C. To promote price stability

D. To increase liquidity in economy

Answer: D

For more such interesting MCQs on various commerce topics visit here

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