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Correct option is (a) Technological environment

(a) Technological environment 

(b) Technological Environment :

Technological environment consists of new products, new technologies, new approaches to product, new methods and equipments, etc.

Correct option is (d) Helps to identify opportunities and getting first mover advantages

(c) Social environment

Liberalisation

Legal Environment

Technological Environment

(a) Unstable Government

Correct option is (D) None of these

Correct option is (d) Legal

Correct option is (D) Monetary

Correct option is (C) Socialist system

To attract more foreign investments in Indian equity market, the procedure of purchase and sale of shares have been made completely transparent by taking various steps.

Dematerialization (DEMAT) service has been introduced to convert the physical shares in electronic form. Due to this the purchase and sale of shares and the transactions of money involved therein became more transparent. The procedure of trading has been developed as per international norms.

Privatisation is useful to reduce political interference in Industry.

Legal Environment.

The four features of social environment are as follows:

1. Customs and Traditions : This decides the celebration of various festivals like Diwali, Id, Christmas and its effect on business. 

2. Social Institutions and Groups or Social Aspects: Literacy level, educational system, cultural heritage standard of living of the various groups of people affect the social environment of business.

3. Social Values : Cultural and social justice, national integration affect the business. Beliefs also help the business to meet the customer needs. 

4. Social Trends : Now a days people have become health conscious and therefore there is a sale of various types of goods like organic food, sugar free products etc.

Economic environment has direct influence on business.

1. The Economic System : Economic activities depend upon the nature of economic system which are: (a) Capitalist economy : e.g. U.S.A. (b) Socialist economy : e.g. China (c) Mixed economy : e.g. India.

2. Economic Policies : The various economic policies of the government has a direct influence on economic environment. For e.g. import and export policy, educational policy, agricultural policy, industrial policy, foreign investment policy, etc. 

3. Economic Condition : The stage at which the growth stands, employment rate, rate of interest, etc. All those determine development of the country.

Economic factors are the fundamental data about the market and economy taken into consideration when an investment or business value is calculated.

In a developing country, the national income and per capita income show positive growth. Moreover, there is also a rising trend in the use of available resources and the standard of living.

As the country develops, the business environment rises and shifts from agriculture to industries and finally to service.

Correct option is (c) Legislature

In agrarian economy, development of agriculture leads to the overall development of the economy. Majority of the resources are used in primary sector and hence the industrial growth is quite slow.

The organized way in which a country allocates resources and distributes goods and services is known as the economic system of that nation.

Factors like climate, minerals, soil, river, etc. are elements of natural environment.

In capitalist system the country adopts a policy of free trade. In this system, the government does not interfere much. It allows the producer to take all the major decisions with respect to production and distribution.

If the national income rises but the population does not rise proportionately, the rate of rise in per capita income will be more than the rate of rise in national income.

1. Any business in a country can be started, regulated and controlled within the legal framework of a country. 

2. Separate set of laws are framed by all countries to control and direct the business affairs. 

3. Knowledge of law, rules and relegations helps the business managers to take prompt decision in making business policies. 

4. Various laws are implemented for influencing the business, protect and safeguard the business, as well as the consumers.

Correct option is (C) Exploitation of employees

Correct option is (B)1955

Correct option is (A) 1951

Correct option is (C)1969

Internal factors affecting business environement.

• Business objectives,
• Employees and
• Managerial systems i.e. organizational structure.

Internal factors and external factors

Business environment includes many groups like consumers, competitors, suppliers of raw materials, employees, etc.

Answer is: (A) 1951

Economic, social, cultural, technological, political and legal factors.

Correct option is (D) Production of quality goods and services

(i) Economic Environment: Interest rates, inflation rates, value of rupee and many more are the economic factors that can affect management practices in a business enterprise. 

(ii) Social Environment: The social environment of business includes the social forces like customs and traditions, values, social trends etc. 

(iii) Technological Environment: This includes forces relating to scientific improvements and innovations, which provide new ways of producing goods and services and new methods and techniques of operating a business. 

(iv) Political Environment: This includes political conditions such as general stability and peace in the country and specific attitudes that elected government representatives hold towards business. 

(v) Legal Environment: This includes various legislations passed by government authorities and court judgements. It is important for the management of every enterprise to obey the law of land and for this, enough of knowledge of rules, and regulations framed by the government is a pre-requisite for better performance.

Factors like, traditions, practices, life style, habits etc. are part of cultural factors.

Correct Answer is culture

Society formed of is Groups of people, social institutions, social traditions, etc.

Economic system:

• The organized way in which a country allocates resources and distributes goods and services is known as the economic system of that nation.
• How the country functions and in which direction is its economy moving is ascertained by the economic system that the country follows.

There are three major types of economic system existing in the world:

(A) Capitalist economic system:

• If the country follows capitalistic economic system, it means that the country will adopt a policy of free trade.
• In this system, the government does not interfere much. It allows the producer to take all the major decisions with respect to production and distribution.
• Such a free trade policy boosts the economy.
• America, UK, Germany, etc. follow capitalist system.

(B) Socialist system:

• The economic system which is controlled and regulated by the government so as to ensure welfare and equal opportunity for people of the society is known as socialist system.
• In this system, all major decisions related to how much to produce, what to produce and how to produce and distribute are taken by the government. Individuals do not have a major role to play as far as decision making is concerned.
• China follows socialist system.

(C) Mixed economy (Mixed economic system):

• The economy which has some features of capitalist economy and some of socialist economy is called mixed economy.
• India has adopted a mixed economy. Under this system, India allows businesses of certain sectors to do business freely whereas certain sectors are controlled by the government itself.

• Any business activity is practically meant for the development of the entire society. Business activities are designed with the objective of attaining speedy economic development and increasing the welfare activities.
• There is a direct relationship between development of business and welfare of society. The government sees to it that businesses grow ethically. It frames various policies and regulations to nullify the long term negative impacts if any from the business to society.
• Hence, the government is alert that although business development should be fast, it should not have adverse impact on the society.

• All the three sectors of an economy are dependent on each other and so development of one sector will lead to the development of the other. For example, to boost agriculture sector, people will have to adopt mechanization i.e. have to move towards industrial sector. Once the production rises, the country will require a strong infrastructure of services such as warehousing, transportation, communication, insurance, etc.
• So, sectorial changes bring about a favourable business environment.

(A) Business Environment: 

A business is defined as buying and selling activity to generate income. Business consists of several interrelated and interacting elements. Business is an economic and social activity of the society. Society is an integral part of the business and its interest cannot be ignored.

Business environment consists of economic, social, legal, technological and political situation. Business obtains money, material, machinery and manpower and other resources from environment. 

According to B. O. Wheeler – Business environment is “the total of all things external to firms and individuals which effect their organisation and operations”. According to Oxford English Dictionary – “Business Environment refers to those aspects of the surroundings of a business enterprise which influence or effect its operations and determine its effectiveness.

Basically business environment consists of all internal and external factors that influence the nature and scope of business activity. 

(B) Importance of Business Environment: 

(i) Flexible and Dynamic : Changing environmental factors should be appraised from time to time. So as to keep the business flexible and dynamic. The new opportunities and threats created by the environment can be appraised by the corporate planners to make the most of it. Turbulent market conditions, less brand loyalty, more demanding customers and intense global competition are some of the images of todays business environment. In order to cope with these significant changes, organization must understand and examine the environment and develop suitable course of activity. 

(ii) Opportunities and Threats : Study of business environment enables a business enterprise to visualise future problems that can arises as also future business prospects in advance. Deriving benefit from honourable business opportunities is possible as also it can face the problems boldly. Awareness of environment help an organisation to take advantage of such opportunities instead of loosing them to competition. It helps organisation to identify various threats on time and serves as an early signal.

(iii) Competition : Understanding the business environment helps to obtain qualitative information which in turn is useful in formulating business plans, policies and strategies for the future course of action. 

(iv) Utilization of Resources Optimally : Optimum use of available resources for the business enterprise is possible by studying the business environment. It enables the enterprise to take full advantage of the policies implemented by the government. 

(v) Strength and Weakness Identification : With the change of technology and global development it helps to analyze individual strength and weakness of the business understanding the challenges, appropriate decisions are taken on timely basis. 

(vi) Knowledge : Study of environment is necessary to discover and exploit new opportunities for business expansion broad strategies and long term planning enable the development of a formidable business wait. 

(vii) Image Building: Environment study makes it possible for the business to expand and to make it acceptable and agreeable to different social groups. By fulfilling its social obligations towards different groups of society, business can create goodwill and reputation for itself. 

(viii) Adaptability to Socio-Economic Changes : A business organization needs to show its keen intentions towards adapting to the socio-economic changes.

Correct option is (b) Social

(i) The various dimensions of business environment referred in the above case are:

1. Political environment

2. Technological environment 

3. Economic-environment

(ii) Make in India is the policy of government as per its ideology. As it focusing on job creation and skill development in 25 sectors of economy, it convey two values through this initiative. High quality standards and concern for environment. It also aims to attract foreign capital investment in India.

Vision, mission and objectives of business are related to Internal factors

Correct option is (c) Customs and beliefs

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.