Business Environment MCQs

Business Environment is similar to normal environment. Like our environment includes surrounding of various manmade and natural things where we live and such all things affect to our day-to-day life. Similarly, the Business Environment also includes certain factors, forces, institutes that will affect the working of our business. The business environment is the combination of internal and external forces which are having a direct and indirect impact on the working of the business.

Business Environment MCQs: This section contains multiple-choice questions and answers on Business Environment. It will help the students to prepare well for their exams and to test their skills in Business Environment.

List of Business Environment MCQs

1. Institutions, organizations and policy mechanisms by which the people of a country manage and utilize the country's resources to obtain the things they need, refer to:

  1. Economics
  2. Ergonomics
  3. Economic System
  4. All of the above

Answer: C) Economic System

Explanation:

Economic System refers to institutions, organizations and policy mechanisms by which the people of a country manage and utilize the country's resources to obtain things they need.

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2. Which of the following may be termed as long-objectives of Indian planning?

  1. Self-reliance
  2. Productive employment generation
  3. Growth of 7 per cent per annum
  4. Growth in infrastructure
  1. 1 and 2
  2. 3 and 4
  3. 1, 2 and 4
  4. 2, 3 and 4

Answer: A) 1 and 2

Explanation:

Self-reliance and productive employment generation are long-term objectives of planning in India. For the first time, the Sixth five-year plan accorded the priority status for employment.

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3. 'Take off stage' is an economy means,

  1. Economy is stagnant
  2. Economy is about to collapse
  3. Steady growth begins
  4. All controls are removed

Answer: C) Steady growth begins

Explanation:

Rostow's (1960) 'Stages of Economic Growth' has introduced five stages that all countries must go through in order to develop: 1) traditional society, 2) preconditions to take-off, 3) take-off, 4) drive to maturity, and 5. ) age of high mass consumption. Take-off is a short period of great growth when industrial development begins, and workers and institutions focus on the new industry.

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4. The Planning Commission of India:

  1. Was set up in 1950
  2. Is a constitutional body
  3. Is an advisory body
  4. Is a government department
  1. 1 and 2
  2. 2 and 3
  3. 1 and 3
  4. 3 only

Answer: C) 1 and 3

Explanation:

The Planning Commission (now known as the NITI AAYOG) was established in 1950 and is a permanent commission in India that serves as the advisory body of the main governing authority in all matters relating to design and development.

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5. NITI in the NITI Aayog stands for,

  1. National Institution for Transferring India
  2. National Institution for Transforming India
  3. National Income for Transferring India
  4. National Institution for Travelling India

Answer: B) National Institution for Transforming India

Explanation:

NITI in the NITI Aayog stands for National Institution for Transforming India

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6. Planning in India derives its objectives from,

  1. Fundamental Rights
  2. Directive Principles of State Policy
  3. Fundamental Duties
  4. Preamble

Answer: B) Directive Principles of State Policy

Explanation:

The Directive Principles of State policy (DPSP) is an 'instrument of instruction' listed in the Indian Government Act, 1935. They strive to create economic and social democracy in the country and are not legally enforced by the courts for their violations. Planning in India also finds its objectives from Directive Principles of State Policy.

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7. The Economic Survey is published by,

  1. Ministry of Finance
  2. Planning Commission
  3. Government of India
  4. Indian Statistical Institute

Answer: A) Ministry of Finance

Explanation:

The Economic Survey is prepared by the Economics Division of the Department of the Economic Affairs in the Finance Ministry under the full supervision of the chief economic adviser and is issued with the approval of the finance minister.

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8. The prices by which the government buys food grain for the maintenance of the public distribution system and to build a buffer stock are known as,

  1. Minimum Support Price
  2. Procurement Price
  3. Issue Price
  4. Ceiling Price

Answer: B) Procurement Price

Explanation:

The prices by which the government buys food grain for the maintenance of the public distribution system and to build a buffer stock are known as Procurement Price.

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9. The Reserve Bank of India and the Federal Reserve,

  1. are central banks
  2. are branches of commercial banks
  3. use fiscal policy to influence GDP
  4. loan money to most of LDC commercial banks

Answer: A) are central banks

Explanation:

The Reserve Bank of India and the Federal Reserve are central banks.

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10. An open economy is one where,

  1. Deficit financing is absent
  2. No export activities
  3. No import activities
  4. Economy opened to the world

Answer: D) Economy opened to the world

Explanation:

An open economy is one where a nation that trades with the other nations in goods and services and financial assets.

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11. Does a mixed economy mean an economy where there is?

  1. Existence of capitalism
  2. Privatization, liberalization and globalization
  3. Existence of both public and private sectors
  4. Growing crops along with rearing animals

Answer: C) Existence of both public and private sectors

Explanation:

A mixed economy is one in which both public and private companies are together, with a certain degree of freedom of expression. However, government intervention is expected to achieve public goals. However, the coexistence of capitalism and socialism.

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12. Industrial policy refers to the government's policy towards?

  1. Industry Establishment
  2. Industry Functioning
  3. Industry growth and management
  4. All of the above

Answer: D) All of the above

Explanation:

The Government's policy towards industries is their establishment, functioning, growth and management.

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13. New Industrial Policy, 1991 was announced by,

  1. Mr. P.V. Narshimha Rao
  2. Dr. Rajendra Prasad
  3. Mr. Y B Reddy
  4. Mr. Venkatesh Rao

Answer: A) Mr. P.V. Narshimha Rao

Explanation:

New Industrial Policy was announced by Mr. P.V. Narshimha Rao on 24th July, 1991.

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14. Which policy is known as New Economic Policy?

  1. Industrial Policy 1948
  2. Industrial Policy 1956
  3. Industrial Policy 1977
  4. Industrial Policy 1991

Answer: D) Industrial Policy 1991

Explanation:

Industrial Policy 1991 is known as New Economic Policy introduced by former Prime Minister Manmohan Singh.

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15. ___ mean change in a set of policies, rules and regulations from one period of time to another to achieve economic growth.

  1. Tax reforms
  2. Economic reforms
  3. Land reforms
  4. None of the above

Answer: B) Economic reforms

Explanation:

Economic reforms mean change in a set of policies, rules and regulations from one period of time to another to achieve economic growth.

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16. Who is the chairperson of the planning commission in India?

  1. President
  2. Vice President
  3. Prime Minister
  4. Finance Minister

Answer: C) Prime Minister

Explanation:

The Prime Minister is the Chairperson of the Planning Commission, which operates under the direction of the National Development Council. The Deputy Chairperson and full members of the Commission, as an integrated body, provide advice and guidance on the study.

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17. Most of the underdeveloped economies are plagued by ___ which does not allow growth rates to rise from a low level.

  1. High infant mortality
  2. High population pressures
  3. High monetary mismanagement
  4. High level of technological unemployment

Answer: B) High population pressures

Explanation:

Most of the underdeveloped economies are plagued by 'High Population Pressures' which does not allow growth rates to rise from a low level.

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18. The book Wealth of Nations was written by,

  1. Eric Roll
  2. J.M. Keynes
  3. Adam Smith
  4. Harold Laski

Answer: C) Adam Smith

Explanation:

The book Wealth of Nations was written by Adam Smith.

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19. Which of the following could not be considered a major economic system?

  1. physical quality of life index
  2. socialism
  3. communism
  4. capitalism

Answer: A) physical quality of life index

Explanation:

The physical quality of life index could not be considered a major economic system.

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20. Monetary policy affects the ___ and ___.

  1. reserve, unemployment
  2. money, supply, interest rate
  3. taxes, exchange rate
  4. stock, price, minimum wage

Answer: B) money, supply, interest rate

Explanation:

Monetary policy affects the money, supply and interest rate.

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Cooperative Society MCQs Sole Proprietorship MCQs
Partnership MCQs Depreciation MCQs
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