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Test: Business Environment- Assertion & Reason Type Questions - Commerce MCQ


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15 Questions MCQ Test Business Studies (BST) Class 12 - Test: Business Environment- Assertion & Reason Type Questions

Test: Business Environment- Assertion & Reason Type Questions for Commerce 2024 is part of Business Studies (BST) Class 12 preparation. The Test: Business Environment- Assertion & Reason Type Questions questions and answers have been prepared according to the Commerce exam syllabus.The Test: Business Environment- Assertion & Reason Type Questions MCQs are made for Commerce 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Business Environment- Assertion & Reason Type Questions below.
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Test: Business Environment- Assertion & Reason Type Questions - Question 1

Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Economic environment includes economic policies of the Government, including industrial, monetary and fiscal policies.

Reason (R): Business enterprises in India do realise the importance and impact of the economic environment on their working.

Detailed Solution for Test: Business Environment- Assertion & Reason Type Questions - Question 1
The economic environment in India consists of various macro level factors related to the means of production and distribution of wealth which have an impact on business and industry.
Test: Business Environment- Assertion & Reason Type Questions - Question 2

Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Changes in fashions and tastes of consumers may shift demand in the market from existing products to new ones.

Reason (R): Business environment is dynamic, i.e., it keeps on changing in consumer preferences.

Detailed Solution for Test: Business Environment- Assertion & Reason Type Questions - Question 2
Business environment is dynamic, i.e., it keeps on changing whether in terms of technological improvement, shifts in consumer preferences or entry of new competition in the market.
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Test: Business Environment- Assertion & Reason Type Questions - Question 3

Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Shift in demand from propeller airplanes to jets and from typewriters to computer based word processors have all been responsible and creating new business.

Reason (R): Technological environment includes forces relating to scientific improvements and innovations, which provide new ways and techniques of operating a business.

Detailed Solution for Test: Business Environment- Assertion & Reason Type Questions - Question 3
Technological environment includes the discovery of new methods and techniques for the production of goods and services. Technological changes make available better methods of production and that makes the optimum use of the raw material possible.
Test: Business Environment- Assertion & Reason Type Questions - Question 4

Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): The business environment helps in understanding the threats which are likely to happen in the future.

Reason (R): Environmental awareness can help managers to identify various threats on time and serve as an early warning signal.

Detailed Solution for Test: Business Environment- Assertion & Reason Type Questions - Question 4
Environment happens to be the source of many threats. Environmental awareness can help managers to identify various threats on time and serve as an early warning signal.
Test: Business Environment- Assertion & Reason Type Questions - Question 5

Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Understanding of legal knowledge is a pre-requisite for the smooth functioning of business and industry.

Reason (R): Legal environment includes various legislations passed by the Government, administrative orders issued by government authorities, court judgments as well as the decisions rendered by various commissions and agencies at every level of the government; Centre, State or Local.

Detailed Solution for Test: Business Environment- Assertion & Reason Type Questions - Question 5
Non-compliance with the laws of the land can put business firms into legal problems.
Test: Business Environment- Assertion & Reason Type Questions - Question 6

Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Interest rates, taxes, inflation, stock market indices, value of rupee, personal disposable income, unemployment rate, etc. are the factors which affect the economic environment.

Reason (R): The economic environment consists of an economic system, economic policies and economic conditions prevailing in a country.

Detailed Solution for Test: Business Environment- Assertion & Reason Type Questions - Question 6
Economic Environment consists of factors like inflation rates, interest rates, consumers’ incomes, economic policies, market conditions, etc. which affect the performance of a business firm.
Test: Business Environment- Assertion & Reason Type Questions - Question 7

Direction: In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Business environment includes both specific and general forces

Reason (R): General forces such as investors, customers, competitors and suppliers affect individual enterprises directly and immediately in their day-to-day working.

Detailed Solution for Test: Business Environment- Assertion & Reason Type Questions - Question 7
General forces such as social, political, legal and technological conditions have an impact on all business enterprises and thus, may affect an individual firm only indirectly.
Test: Business Environment- Assertion & Reason Type Questions - Question 8

Direction: In the questions given below are two statements labelled as Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?

Assertion (A): The internal factors are generally regarded as controllable factors.

Reason (R): Since, the company has control over internal factors

Detailed Solution for Test: Business Environment- Assertion & Reason Type Questions - Question 8
The internal factors are generally regarded as controllable factors because the company has control over these factors; it can alter or modify such factors as its personnel, physical facilities, organization and functional means, such as marketing mix, to suit the environment.
Test: Business Environment- Assertion & Reason Type Questions - Question 9

Direction: In the questions given below are two statements labelled as Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?

Assertion (A): Desire competition is generally very high in countries characterised by limited disposable incomes.

Reason (R): In competitive world the firms has to compete, not only the other firms which market the same or similar products, but also all those who compete for the discretionary income of the consumer.

Detailed Solution for Test: Business Environment- Assertion & Reason Type Questions - Question 9
A perfectly competitive firm is known as a price taker because the pressure of competing firms forces them to accept the prevailing equilibrium price in the market. If a firm in a perfectly competitive market raises the price of its product by so much as a penny, it will lose all of its sales to competitors.
Test: Business Environment- Assertion & Reason Type Questions - Question 10

Direction: In the questions given below are two statements labelled as Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?

Assertion (A): High intensity of competitive rivalry can make an industry more competitive and decrease profit potential for the existing firms.

Reason (R): Industry with excess production capacity will have greater rivalry among competitors.

Detailed Solution for Test: Business Environment- Assertion & Reason Type Questions - Question 10
An industry with excess production capacity will have greater rivalry among competitors. And finally, high exit barriers costs or losses incurred as a result of ceasing operations will cause intensity of rivalry among industry firms to increase.
Test: Business Environment- Assertion & Reason Type Questions - Question 11

Direction: In the questions given below are two statements labelled as Assertion and Reason (R). In the context of the two statements, which one of the following is correct?

Assertion (A): Environmental understanding provide enough information regarding the need of consumers.

Reason (R): Environmental understanding is not an early warning system.

Detailed Solution for Test: Business Environment- Assertion & Reason Type Questions - Question 11
Early warning system is an adaptive measure for climate change, using integrated communication systems to help communities prepare for hazardous climate-related events. A successful EWS saves lives and jobs, land and infrastructures and supports long-term sustainability.
Test: Business Environment- Assertion & Reason Type Questions - Question 12

Direction: In the questions given below are two statements labelled as Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?

Assertion (A): The image and brand equity of the company matters a lot in raising finance forming joint ventures and other alliance.

Reason(R): The main motive of any business should be wealth maximisation.

Detailed Solution for Test: Business Environment- Assertion & Reason Type Questions - Question 12
The wealth maximization as an objective to financial management and other business decisions enables the shareholders to achieve their objectives and therefore is superior to profit maximization. For financial managers, it is a decision criterion being used for all the decisions
Test: Business Environment- Assertion & Reason Type Questions - Question 13

Direction: In the questions given below are two statements labelled as Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?

Assertion (A): Micro environment is also known as operating environment of business.

Reason (R): Micro environment forces have a direct bearing on the operations of the firm.

Detailed Solution for Test: Business Environment- Assertion & Reason Type Questions - Question 13
  • The micro environment refers to such players whose decisions and actions have a direct bearing on the company.

  • Macro environment comprises large social and physical forces which affect the company and also the players in the company's micro environment.

Test: Business Environment- Assertion & Reason Type Questions - Question 14

Direction: In the questions given below are two statements labelled as Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?

Assertion (A): The private proprietorship is replaced by social ownership as and when we move from a capitalist system to a socialist system.

Reason (R): Under socialism properties are managed by the state.

Detailed Solution for Test: Business Environment- Assertion & Reason Type Questions - Question 14
In a socialist economy, the government owns and controls the means of production; personal property is sometimes allowed, but only in the form of consumer goods
Test: Business Environment- Assertion & Reason Type Questions - Question 15

Direction: In the questions given below are two statements labelled as Assertion (A) and Reason (R). In the context of the two statements, which one of the following is correct?

Assertion (A): Business environment does not affect much the decision-making of the companies.

Reason (R): Business environment is related to all external forces outside the organisation.

Detailed Solution for Test: Business Environment- Assertion & Reason Type Questions - Question 15
Business environment affects the decisions, strategies, process and performance of the business. The environment is consisting of factors which are beyond the control of the business (STEP) social, technological, economical, legal and political. Therefore, any organization should look or search its environment continuously.
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