Class 12 Business Studies Chapter 3 MCQ and Important Questions of Business Environment for the academic session 2022-2023. 12th Business Studies chapter 3 multiple choice questions and important questions provide extra revision for test yourself. Class 12 Business Studies Chapter 3 Solutions.

Class 12 Business Studies Chapter 3 MCQ


Which of the following is an example of social environment?

[A]. Mobile phones have outdated telephones.
[B]. Chinese products are being freely sold in the Indian market.
[C]. Demand for new garments increase during festival seasons.
[D]. The Government of India has amended Companies Act.

The Government of India has recently come up with an amendment to Companies Act 2013 regarding corporate social responsibility. It is a dimension of . . . . . . . . . environment.

[A]. Political
[B]. Legal
[C]. Economic
[D]. Social

Liberalisation means

[A]. Policy of planned disinvestment
[B]. Reduced government controls and restrictions
[C]. Integration among economies
[D]. None of them.

Which if the following is an example of economic environment?

[A]. Money supply in the economy
[B]. Composition of family
[C]. The Constitution of the country.
[D]. Consumer Protection Act.

Importance of Business Environment

    1. Identification of opportunities to get first mover advantage
    2. Identification of threats and early warning signals
    3. Tapping useful resources
    4. Coping with Rapid changes
    5. Assistance in planning and policy formulation
    6. Helps in improving performance

When was economic reforms programme introduced in the Indian economy?

[A]. 1991
[B]. 1956
[C]. 2021
[D]. 2013

What is the main constituents of economic reforms?

[A]. Liberalisation
[B]. Privatisation
[C]. Globalisation
[D]. All of the above

Which among the following is not opened form private sector participation in India?

[A]. Aviation
[B]. Education sector
[C]. Railways
[D]. Telecommunication

What is meant by Globalisation?

[A]. Setting of company’s branches in other countries.
[B]. Attracting foreign investment
[C]. Promoting export
[D]. All of above.

Social Business Environment

It includes various social forces such as customs, beliefs, literacy rates, educational levels, lifestyle, values etc. Changes in social environment affect an organisation in the long run. Example: Now a days people are paying more attention towards their health, as a result of which demand for mineral water, Diet coke etc. has increased while demand of tobacco, Fast food products has decreased.


Which factor does not help in Globalisation?

[A]. Investment in infrastructure
[B]. Removal of government controls
[C]. Tariffs regime
[D]. Tax concession

Banning of single use plastics is an example of which kind of environment?

[A]. Legal
[B]. Social
[C]. Technical
[D]. Economic

Which of the statement is true?

[A]. Globalisation benefits the rich countries more.
[B]. Globalisation benefits the poor countries more.
[C]. Globalisation benefits all the countries.
[D]. None of the Above.

Which concept refers to sale of public sector shares to partially cover the fiscal deficit?

[A]. Privatisation
[B]. Liberalisation
[C]. Disinvestment
[D]. Licensing
Legal Business Environment

It constitutes the laws and legislations passed by the Government, administrative orders, court judgements, decisions of various commissions and agencies. Example: Advertisement of Alcoholic products is prohibited and it is compulsory to give statutory warning on advertisement of cigarettes.


What are Navratna companies?

[A]. Profit making private companies
[B]. Profit making public sector companies
[C]. Both [a] and [b]
[D]. Top 9 companies trading on Bombay Stock Exchange.

A business enterprise can influence its environment. True or False?

[A]. True
[B]. False
[C]. Partially True
[D]. None of the Above

Demonetisation refers to

[A]. Reducing the value of currency
[B]. Devaluation of the currency
[C]. Scrapping the currency in use
[D]. All of the above.

Reduction of interest on housing loans is an example of which environment?

[A]. Legal
[B]. Social
[C]. Technical
[D]. Economic
Managerial response to changes in business environment

The impact of changes in economic policy of government has made managers aware of various areas where they have to focus to keep their business environment help them to take decision regarding increasing competition, the demands of customers and their expectations (consumer is the king), rapidly changing technological environment, necessity to adapt to change and need for developing human resources.


Budgetary support to public sector has increased as a consequence of the LPG. True or False?

[A]. True
[B]. False
[C]. Partially True
[D]. None of the Above

Increase in the Sensex after Lok – Sabha election is an example of which environment?

[A]. Legal
[B]. Political
[C]. Technical
[D]. Economic

The sum total of forces affecting the business in known as

[A]. Business environment
[B]. Social environment
[C]. Economic environment
[D]. All of the Above

Which statement is false?

[A]. Business environment is dynamic
[B]. Business environment differs from region to region
[C]. Business environment can be classifies as Social, Legal, Political, economic and Technological.
[D]. Business environment is predictable.

How important are MCQs as far as chapter 3 class 12 business studies is concerned?

Chapter 3 “Business environment” is very important to understand the subject thoroughly. However, the weightage of the chapter has diminished over the last 3 years. Hence, to expect more number of questions as MCQs in class 12th chapter 3 Business studies chapter would be unwise.

What are the important topics for preparing MCQs in class 12 in chapter 3?

Dimensions of business environment which are social, political, economic, legal, technological are important from examination point of view and in particular- social and legal are important because students may be confused between the two.

Are we required to write the explanation for the correct answer in MCQ?

No, however we have provided explanation to MCQs so that students attain mastery over the subject.