Free CBSE Business Studies Multiple Choice Questions for Class 12 along with answers, Chapter 3: Business Environment. Business Studies MCQs for Class 12 chapter-wise with answers are prepared based on the current exam pattern. Students can tackle MCQs with answers to realise their spadework level.
1. A business has to offer a wider choice in purchasing enhanced quality of goods and services in order to maintain an edge over its competitors. The implementation of the new economic policy with liberalisation, privatisation, and globalisation has posed various challenges for the corporate sector. One of the important challenges is explained in the above lines. Identify it.
(a) Increasing competition
(b) More demanding customers
(c) Necessity for change
(d) Market orientation
Answer: (a) Increasing competition
2. Which of the following is a feature of demonetisation?
(a) Tax administration measure
(b) Channelising savings into the formal financial system
(c) Development of less-cash economy
(d) All of the above
Answer: (d) All of the above
3. On 8th November 2016, with the announcement from the Government of India, all the ₹500 and ₹1,000 banknotes of the Mahatma Gandhi series have ceased to be legal tender. The government also announced the issuance of new ₹500 and ₹2,000 banknotes in exchange for the demonetised banknotes. Identify the concept being described in the above lines.
(a) Globalisation
(b) Liberalisation
(c) Demonetisation
(d) Privatisation
Answer: (c) Demonetisation
4. In today’s world, the flow of goods and services is not only cheap and fast, but reliable and secure. You can order anything you wish from any part of the world. The Internet has been connecting people without any limitations or boundaries in the way of doing business. Identify the concept being described in the above lines.
(a) Liberalisation
(b) Globalisation
(c) Demonetisation
(d) Privatisation
Answer: (b) Globalisation
5. The Government of India launched the “Make in India” initiative in September 2014 to increase foreign direct investment (FDI) in 25 sectors. As of April 2015, FDI inflow in India increased by 48% since the launch of the “Make in India” initiative.
Identify the concept being described in the above lines, with regard to an inflow of FDI.
(a) Demonetisation
(b) Privatisation
(c) Liberalisation
(d) Globalisation
Answer: (c) Liberalisation
6. The Union Cabinet has given an ‘in-principle’ nod to divest stakes in Air India, a wholly government-owned airline. This means the government is willing to shed a substantial portion of its stake and hand over the management of the ailing airline to the private sector. Identify the concept being described in the above lines.
(a) Liberalisation
(b) Privatisation
(c) Globalisation
(d) Demonetisation
Answer: (b) Privatisation
7. According to a report by the India Staffing Federation (ISF), India has emerged as the
fifth largest market worldwide in Flexi-staffing in 2018, and the country would have a 6.1 million Flexi-workforce by 2021. It showed that Haryana, Gujarat, Karnataka, Madhya Pradesh, and Telangana are the states with high growth potential for Flexi-staffing, but Andhra Pradesh tops the list of states with favourable business environments. Identify the features of the business environment being discussed above.
(a) Relativity
(b) Dynamic nature
(c) Uncertainty
(d) Interrelatedness
Answer: (a) Relativity
8. India continues to be a lower-middle-income country along with 46 others, while Sri Lanka has climbed to the upper-middle-income group for the fiscal year (FY) 2020, according to the World Bank’s classification of countries by income levels, released on July 1, 2019. Identify the related dimensions of the business environment.
(a) Social dimension
(b) Technological dimension
(c) Economic dimension
(d) Political dimension
Answer: (c) Economic dimension
9. India’s population is expected to grow under 0.5 percent during 2031-41 due to a decline in fertility rate and an increase in life expectancy. These changes in India’s demography will also have implications such as the proportion of elementary school-going children will witness significant declines, lack of hospital beds, and an increase in retirement age. The related feature of the business environment is described in the above lines is________.
(a) Totality of external forces
(b) Dynamic nature
(c) Interrelatedness
(d) Relativity
Answer: (c) Interrelatedness
10. According to the World Health Organisation, 39% of adults are overweight. Over the last 40 years, the prevalence of obesity has tripled around the world. With over half of consumers drinking at least one sugary drink on a given day, regulations towards the beverage sector are likely to become increasingly onerous. In the U.K., for example, a sugar tax was introduced in 2018 on beverages containing more than 5% sugar. Identify the related dimensions of the business environment.
(a) Legal dimension and Social dimension
(b) Social dimension and Technological dimension
(c) Technological dimension and Legal dimension
(d) Political dimension and Technological dimension
Answer: (a) Legal dimension and Social dimension
11. As a result of major government initiatives, more and more people are going ‘green’. In order to keep in line with the trend, ‘Clapaway’ a carpet cleaning company, has advertised that they only use natural cleaners that come from renewable resources and that all their service vehicles are hybrid vehicles that use both gas and electricity. Identify one of the points related to the importance of the business environment and its understanding by managers, which is being highlighted in the above case.
(a) It helps in assisting in planning and policy formulation
(b) It helps in coping with rapid changes
(c) It helps in improving performance
(d) It enables the firm to identify opportunities and get the first-mover advantage
Answer: (c) It helps in improving performance
12. ‘Yo Tummy’ began its business by offering the classic combo of hamburgers and fries. But over time, their customers wanted healthier foods, so ‘Yo Tummy’ responded and began offering healthy alternatives such as salads, fruits, wraps, and oatmeal. If ‘Yo Tummy’ hadn’t responded, they may have lost customers that wanted to eat healthier foods. The above case highlights one of the points related to the importance of the business environment and its understanding by managers. Identify it.
(a) It helps in coping with rapid changes
(b) It helps in improving performance
(c) It helps the firm to identify threats and early warning signals
(d) It enables the firm to identify opportunities and get the first-mover advantage
Answer: (a) It helps in coping with rapid changes
13. Electric vehicles with zero tailpipe emissions are emerging as a good alternative to problems like climate change, surging pollution leading to ill health, crude import bill, and energy security. Identify the related dimensions of a business environment.
(a) Economic dimension, Legal dimension, and Social dimension
(b) Social dimension, Political dimension, and Economic dimension
(c) Economic dimension, Technological dimension, and Social dimension
(d) Social dimension, Political dimension, and Legal dimension
Answer: (c) Economic dimension, Technological dimension, and Social dimension
14. The Economic Survey 2019 suggests that psychological biases can be used in the realm of tax compliance. It is in favour of using religious norms such as “dying in debt is a sin” to improve tax compliance. Identify the related dimensions of the business environment.
(a) Legal dimension and Social dimension
(b) Social dimension and Economic dimension
(c) Technological dimension and Political dimension
(d) Political dimension and Economic dimension
Answer: (b) Social dimension and Economic dimension
15. In order to boost and double India’s export of goods and services to over USD 1,000 billion by 2025, it is important to lower effective corporate tax rates, bring down the cost of capital and simplify regulatory and tax frameworks. Identify the related dimension of a business environment.
(a) Social dimension and Legal dimension
(b) Technological dimension and Political dimension
(c) Political dimension and Social dimension
(d) Economic dimension and Legal dimension
Answer: (a) Social dimension and Legal dimension
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