You will find here, Chapter Wise NCERT Class 12 Business Studies MCQ Questions of Business Environment with Answers Free based on the important concepts and topics given in the textbooks. Class 12 Business Studies MCQ Questions with Answers provided here with detailed solutions so that you can easily understand the logic behind each answer.

We have provided Business Environment Class 12 Business Studies Multiple Choice Questions with Answers to help students understand the concept very well. Students who can Practice CBSE Class 12 Business Studies Objective type Questions with Answers they score high in Board Exams.

1. Which one of the following is not a feature of business environment?

(a) Uncertainty
(b) Interdependence
(c) Complexity
(d) Continuous

2.  Which one of the following is a part of economic environment?

(a) Public debt
(b) Lifestyle of people
(c) Technological changes
(d) Level of education

3. Proper understanding of business environment is not a prerequisite for

(a) tapping of useful resources
(b) identification of opportunities and threats
(c) formulation of strategies
(d) better coordination of employee efforts

4. Globalisation means

(a) reduced role of public sector
(b) integration of economies
(c) lowering interest rates
(d) control of inflation

5. Which one of the following is the impact of Government policy changes on business and industry?

(a) Increase in agricultural productivity
(b) Increase in product prices
(c) Increase in competition
(d) Increase in urbanisation

6. ............nature of business environment suggests that environment keeps on changing.

(a) Dynamic
(b) Pervasive
(c) Continuous
(d) Multidimensional

7. ......is the integration of world economy into a single market through removal of trade barriers between countries.

(a) Privatisation
(b) Liberalisation
(c) Globalisation
(d) Both(a) and (b)

8.. ..............feature of business environment states that various factors of business environment affect each other.

(a) Pervasive
(b) Continuous
(c) Dynamic
(d) Interrelatedness

9. Legal rules and regulations relevant to business are included in ___ environment of business.

(a) Legal
(b) Political
(c) Economic
(d) Technological

10. Electric vehicles with zero tail pipe emission 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 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

11. 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 rate, bring down cost of capital and simplify regulatory and tax framework. Identify the related dimension of 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

12. DigiLocker is the country’s first secured cloud-based platform for the storage, issuance and verification of documents with the Driving Licence & Vehicle Registration System of the Road Transport Ministry. The integration of a government department with DigiLocker since its launch last year is one of the biggest of its kind. It will spare 1 people the trouble of carrying license or vehicle papers, which can be accessed on phones using the DigiLocker app. Identify the related dimension of business environment.

(a) Ecoriomic dimension
(b) Technological dimension
(c) Social dimension
(d) Political dimension

13. Since more number of people have become more beauty and health conscious, our economy has witnessed an unprecedented surge in the number of health and beauty spas and wellness clinics. Related feature of business environment being described in the above lines is —

(a) Totality of external forces
(b) Dynamic nature
(c) Interrelatedness
(d) Relativity

14. Which of the following is not a part of the business environment of business?

(a) Customers
(b) Suppliers
(c) Competitors
(d) None of the above

15. Which of the following is not a component of specific forces of business environment

(a) Technological conditions
(b) Customers
(c) Employees
(d) Investors

16. Any kind of external devices, like compact discs (CD’s) for computer, have become obsolete. Google, with its Google Drive service, Apple with its iCloud offering, enables the users store documents, photos, music and movies on web-based servers. Identify the feature of business environment being described in the above lines.

(a) Relativity
(b) Dynamic nature
(c) Uncertainty
(d) Interrelatedness

17. Liberalisation means

(a) Integration among economies
(b) Reduced government controls and restrictions
(c) Policy of planned disinvestments
(d) None of them

18. Which of the following creates fear in the minds of investors?

(a) Political uncertainty
(b) New innovations
(c) None of these
(d) Technological improvements

19. Which of the following is an example of social environment?

(a) Money supply in the economy
(b) Consumer protection act
(c) The constitution of the country
(d) Composition of family

20.  The entry of the multinational companies in large numbers in the Indian market has created .

(a) Huge Demand
(b) Huge Supply
(c) Tough Competition
(d) Huge Demand and Supply

21.The income and expenditure policy of the government is called.

(a) Fiscal Policy
(b) Industrial Policy
(c) Trade Policy
(d) Monetary Reforms

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

(a) Merger
(b) Acquisition
(c) Strategic Alliance
(d) None of the above

23. Which factor is not included in Internal Environment?

(a) Objective
(b) Policies
(c)  customers
(d) Production-Method

24. Which of the following does not characterize the business environment?

(a) Complexity
(b) Relativity
(c) Employees
(d) Uncertainty

25. Price control means that the companies will sell goods on the ________ price.

(a) Government
(b) Market
(c) Printed
(d) Voluntary

Answer:

1. Answer: (d) Continuous

Explanation: The business environment is concerned with those parts of the environmental elements of a business enterprise, which influence or impact its activities and decide its viability. It alludes to variables and powers that influence a company’s capacity to build and keep up with effective client connections. Continuous elements are not a part of the business environment.

2. Answer: (a) Public debt

Explanation:  Public debt is the total amount, including total liabilities, borrowed by the government to meet its development budget. .The sources of public debt are dated government securities (G-Secs), treasury bills, external assistance, and short-term borrowings.

3. Answer: (c) formulation of strategies

Explanation: The term 'business environment' connotes external forces, factors and institutions that are beyond the control of the business and they affect the functioning of a business enterprise. These include customers, competitors, suppliers, government, and the social, political, legal and technological factors etc.

4. Answer: (b) integration of economies

Explanation: Globalization is the word used to describe the growing interdependence of the world's economies, cultures, and populations, brought about by cross-border trade in goods and services, technology, and flows of investment, people, and information.

5. Answer: (c) Increase in competition

Explanation: ​​​​​​​Among the options given above, change in agriculture prices does not explain the impact of government policy changes on business and industry. More demanding customers, increasing competition and market orientation all explain the impact of such policy changes.

6. Answer: (a) Dynamic

Explanation: ​​​​​​​ Dynamic nature of business environment suggests that it is pervasive. Dynamic nature of business environment suggests that it keeps on changing.

7. Answer: (b) Liberalisation

Explanation: ​​​​​​​ Liberalization or Liberalisation (British English) is a broad term that refers to the practice of making laws, systems, or opinions less severe, usually in the sense of eliminating certain government regulations or restrictions.

8. Answer: (d) Interrelatedness

Explanation: ​​​​​​​Interrelated is used in situations in which two or more elements strongly influence each other or are closely linked to each other. For example, a study on unemployment and crime in a particular area may conclude that they are interrelated.

9. Answer: (a) Legal

Explanation: ​​​​​​​ Legal Environment of business consists of various legislations passed by the government administrative orders issued by the Government authorities court judgements and decisions rendered by various commissions and agencies set up at every level of the government.

10. Answer: (c) Economic dimension, Technological dimension and Social dimension

Explanation: ​​​​​​​ Electric vehicles with zero tail pipe emission are emerging as a good alternative to ' problems like climate change, surging pollution leading to ill health, crude import bill and energy security.

11. Answer: (a) Social dimension and Legal dimension

Explanation: ​​​​​​​ 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 rate, bring down cost of capital and simplify regulatory and tax framework.

12. Answer: (b) Technological dimension

Explanation: ​​​​​​​Technological dimension, as technology is facilitating recycling process. 8. DigiLocker is the country's first secured cloud-based platform for the storage, issuance and verification of documents with the Driving Licence & Vehicle Registration System of the Road Transport Ministry.

13. Answer: (c) Interrelatedness

Explanation: ​​​​​​​ Interrelatedness, as the different elements or parts of business environment are closely interrelated.

14. Answer: (d) None of the above

Explanation: ​​​​​​​All of the above elements are a part of business environment of an enterprise.

15. Answer: (a) Technological condition

Explanation: ​​​​​​​ Technological conditions is a component of general forces that affect the business environment of an enterprise.

16. Answer: (c) Uncertainty

Explanation:  Uncertainty, as business environment is largely uncertain as it is very difficult to predict future events.

17. Answer: (b) Reduced government controls and restrictions

Explanation: ​​​​​​​ Liberalization means freedom of business and industry from the unnecessary control and restrictions of the government , particularly licensing and quotas.

18. Answer: (a) Political uncertainty

Explanation: ​​​​​​​Policy uncertainty (also called regime uncertainty) is a class of economic risk where the future path of government policy is uncertain, raising risk premia and leading businesses and individuals to delay spending and investment until this uncertainty has been resolved.

19. Answer: (a) Money supply in the economy

Explanation: ​​​​​​​ Social environment refers to the social forces such as customs, traditions, social values, social trend etc. that affect the business opportunities and performance. Among the options given in the question, composition of family represents an example of social environment. If the composition of family is such that it comprises of more of children than elderly persons then, this implies greater business opportunity for baby product companies.

20. Answer: (c) Tough Competition

Explanation: ​​​​​​​ The entry of multinational companies in large numbers in the Indian market has created tough competition.

21. Answer: (a) Fiscal Policy

Explanation: ​​​​​​​ Fiscal policy refers to the use of the government budget to affect the economy. This includes government spending and levied taxes. The policy is said to be expansionary when the government spends more on budget items such as infrastructure or when taxes are lowered.

22. Answer: (b) Acquisition

Explanation: ​​​​​​​ Acquisition takes place when the financially strong entity acquires the entity which is less strong financially by acquiring shares worth more than fifty percent and the example of acquisition includes purchase of the company whole foods in the year 2017 by Amazon for $ 13.7 Billion and purchase of the company Time.

23. Answer: (c) customers

Explanation: ​​​​​​​ Environment of a business can be classified as internal and external. External environment consists of factors or forces that are influencing the business from outside. They include customers.Internal elements include the factors that are internal to the business. The mission, objectives, policies, human resources and shareholders' value are examples of internal environment of a business.

24. Answer: (c) Employees

Explanation: ​​​​​​​ Among the options given above, employees do not characterise business environment. Business environment refers to the external forces such as individuals, enterprises, situations, and other such forces that affect the performance of the organisation.

25. Answer: (a) Government

Explanation: ​​​​​​​ Price controls in economics are restrictions imposed by governments to ensure that goods and services remain affordable. They are also used to create a fair market that is accessible by all. The point of price controls is to help curb inflation and to create balance in the market.