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B Com Exam  >  B Com Tests  >  Business Environment  >  Test: Economic Environment - 2 - B Com MCQ

Test: Economic Environment - 2 - B Com MCQ


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10 Questions MCQ Test Business Environment - Test: Economic Environment - 2

Test: Economic Environment - 2 for B Com 2024 is part of Business Environment preparation. The Test: Economic Environment - 2 questions and answers have been prepared according to the B Com exam syllabus.The Test: Economic Environment - 2 MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Economic Environment - 2 below.
Solutions of Test: Economic Environment - 2 questions in English are available as part of our Business Environment for B Com & Test: Economic Environment - 2 solutions in Hindi for Business Environment course. Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free. Attempt Test: Economic Environment - 2 | 10 questions in 10 minutes | Mock test for B Com preparation | Free important questions MCQ to study Business Environment for B Com Exam | Download free PDF with solutions
Test: Economic Environment - 2 - Question 1
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Which of the following is NOT a stage of the business cycle?

Detailed Solution for Test: Economic Environment - 2 - Question 1
The business cycle consists of four stages: contraction, expansion, peak, and trough. Stagnation is not a recognized stage of the business cycle.
Test: Economic Environment - 2 - Question 2
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What does GDP stand for?

Detailed Solution for Test: Economic Environment - 2 - Question 2
GDP stands for Gross Domestic Product, which is a measure of the value of all final goods and services produced in an economy during a specific time period.
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Test: Economic Environment - 2 - Question 3
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What does a higher industrial growth rate indicate?

Detailed Solution for Test: Economic Environment - 2 - Question 3
A higher industrial growth rate indicates an attractive industry for business enterprises. It encourages them to enter into the industry and take advantage of the growth opportunities.
Test: Economic Environment - 2 - Question 4
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How does an increase in interest rate affect borrowing and spending?
Detailed Solution for Test: Economic Environment - 2 - Question 4
An increase in interest rates makes borrowing more expensive, prompting consumers to decrease borrowing and cut down on their spending. This ultimately leads to lower demand for products and services.
Test: Economic Environment - 2 - Question 5
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What does the nature and structure of an economy determine?
Detailed Solution for Test: Economic Environment - 2 - Question 5
The nature and structure of an economy have a significant influence on a firm's business environment and business decisions. It determines factors such as consumer preferences, government policies, and income distribution.
Test: Economic Environment - 2 - Question 6
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What does urbanization refer to?
Detailed Solution for Test: Economic Environment - 2 - Question 6
Urbanization refers to the increase in the proportion of a nation's population living in urban areas. It is often associated with economic and social development, as urban areas provide opportunities for larger markets, innovation, and improved infrastructure.
Test: Economic Environment - 2 - Question 7
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What does deficit financing involve?
Detailed Solution for Test: Economic Environment - 2 - Question 7
Deficit financing involves the government issuing fresh currency to cover a budget deficit. It is used when government funds are inadequate to meet expenditures, and can stimulate demand and economic activity but must be used in limited amounts to avoid inflation.
Test: Economic Environment - 2 - Question 8
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What is the impact of inflation on economic growth?
Detailed Solution for Test: Economic Environment - 2 - Question 8
Inflation, when it exceeds a certain level, can decrease economic growth by increasing the cost of production, reducing savings and investment, and creating uncertainty. It is important to maintain a stable inflation rate for sustainable economic growth.
Test: Economic Environment - 2 - Question 9
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What does the growth rate of money supply determine?
Detailed Solution for Test: Economic Environment - 2 - Question 9
The growth rate of money supply determines liquidity in the market, the interest rate structure, and the cost of capital to business. It is controlled by the central bank of a country and has a significant impact on the overall economy.
Test: Economic Environment - 2 - Question 10
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What does foreign trade indicate about an economy?
Detailed Solution for Test: Economic Environment - 2 - Question 10
Foreign trade indicates the degree of international competitiveness, economic liberalization, and globalization of an economy. It reflects the openness of an economy and its integration with the global market.
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