{Latest} Business Environment MCQs with Answers Class 12

CBSE Class 12 Business Studies Chapter 3: Business Environment MCQs. These MCQs of Class 12 Business Studies are prepared as per the latest syllabus issued by CBSE for Class 12 Board Exams 2022-23.

Students should refer to the following MCQs of  BST Chapter Business Environment with answers Class 12 for their exams.
Want to become a Topper of CBSE Class 12 Commerce?
Below are very Important MCQs of Business Environment Chapter with Topic-wise.

Business Environment MCQs with Answers Class 12

Topic No 1: Introduction, Meaning and Importance of Business Environment MCQs

1. Business environment constitutes of the factors which ______.
(a) The business has control
(b) The business has no control
(c) Influence the business
(d) Both b and c 
Answer: Both b and c.

2. After studying the business environment, a manager can quickly identify business _______.
(a) Threats
(b) Opportunity
(c) Objective
(d) Both a and b
Answer: Both a and b.

3. Which of the following does not belong to the features of the business environment?
(a) Totality of external factors
(b) Totality of internal factors
(c) Interrelatedness
(d) Dynamic nature
Answer: Totality of internal factors.

4. Change in one factor due to the change in another factor highlights the _______ feature of the Business environment.
(a) Uncertainty
(b) Dynamic nature
(c) Complexity
(d) Interrelatedness
Answer: Interrelatedness.

5. ‘Business environment is related to local conditions’. Because of this business environment happens to _______.
(a) Different in different countries
(b) Different in same countries in different places
(c) Same all over the word
(d) Both a and b
Answer: Both a and b.

6. These forces are present outside the business environment
(a) Specific
(b) General
(c) Internal
(d) Both a and b
Answer: Both a and b.

7. Which of the following is not included in the General forces affecting the business environment?
(a) Social situations
(b) Political situations
(c) Technical situations
(d) None of the above
Answer: None of the above.

8. All the negative changes occurring in the business environment, which leads to improvement in an organization’s performance is known as _______.
(a) Threats
(b) Opportunity
(c) Objective
(d) Efficiency
Answer: Threats.

9. All the positive changes occurring in the business environment which lead to improvement in the performance of an organization is known as _______.
(a) Threats 
(b) Opportunity
(c) Objective
(d) Efficiency
Answer: Opportunity.

10. Study of business environment leads to _______.
(a) First mover advantage
(b) Warning signal
(c) Tapping valuable resources
(d) All of these
Answer: All of these.

11. _______ provided by the study of business environment helps in resisting the threats accompanying the business environment.
(a) First mover advantage
(b) Warning signal
(c) Policy formation
(d) Both a and b
Answer: Warning signal.

12. ITC Hotels decided to establish _______ abroad and in India only after a carefully studying of business environment.
(a) Schools
(b) Hospitals
(c) Shops
(d) Hotels
Answer: Hotels.

13. Business environment composes of ______ forces.
(a) General 
(b) Specific
(c) Internal
(d) General and Specific
Answer: General and Specific.

14. All the factors of business environment are _______.
(a) Independent
(b) Stable
(c) Dynamic
(d) Related to one another.
Answer: Related to one another.

15. The business environment is ______ in nature.
(a) Dynamic
(b) Stable
(c) Constant
(d) None of these
Answer: Dynamic.

16. Hange, owner of a shop, knows the importance of customers and suppliers and has an excellent relationship with them. She knows that if any one of them is dissatisfied, it might negatively impact her shop and not on the other shops. Therefore, she tries her best to have a good relationship with them.
Similarly, she also knows that if there is any change in customs and technology, its impact would not only on her shop but also on the shops of that particular industry, even though she doesn’t let her guard down.
Identify one of the ‘Features of business environment’ used in the above event.

(a) Inter-relatedness
(b) Dynamic nature
(c) Totality of external forces
(d) Specific and General forces
AnswerSpecific and General forces.

17. Levi, fast food shop owner, experienced reduced sales after a healthcare campaign in their city. It was so sudden and unexpected for him.
Out of the following features of the business environment, please select the one which is responsible for it.

(a) Inter-relatedness
(b) Uncertainty 
(c) Complexity
(d) Both a and b
Answer: Both a and b.

18. Different kinds of factors present in the business environment  impacts on business. Therefore, it becomes tough for a running business to know the extent of the relative impact of different factors like social, technological, economic, etc., on change in demand for a product available in the market.
Select an appropriate option out of the following ‘features of the business environment’.

(a) Relativity
(b) Complexity
(c) Dynamic nature
(d) Specific and General forces
Answer: Complexity.

19. Rajesh and Suraj are two different businessmen and are new in the market. Rajesh always keeps an eye on the business environment and always prepares himself accordingly. On the other hand, Suraj doesn’t prefer keeping an eye on the business environment and therefore neglects it. Within no time, his business was leading in his industry and whereas the business of Suraj was becoming obsolete in the market.
Identify the right point of ‘importance of the business environment’ related to the above event.

(a) Assisting in planning and policy formulation
(b) Coping with rapid changes
(c) Tapping valuable resources
(d) Improvement in performance
AnswerImprovement in performance.

20. Due to the pandemic worldwide, work from home was promoted in various countries. It increased the sale of multiple businesses like the tech and software industries. Even the media sector gained massive growth during the pandemic. It was very sudden and unexpected for various firms.
Select an appropriate feature of the Business environment from the following, which is related to the above statement.

(a) Totality of external forces
(b) Interrelatedness
(c) Relativity
(d) Uncertainty 
AnswerUncertainty.

Business Environment MCQ Questions

Topic No 2: Component of Business Environment

1. Internal environment refers to the factors which are _______.
(a) Under control of business
(b) Present within the business
(c) Influence the business 
(d) All of these.
Answer: All of these.

2. Internal environment does not include the forces which are _____.
(a) Uncontrollable by the business
(b) Not influenced by the business
(c) Controllable by the business
(d) Both a and b
Answer: Both a and b.

3. Which of the following is part of the External environment?
(a) Microenvironment 
(b) Macroenvironment
(c) General environment
(d) All of these
Answer: All of these.

4. Which of the is most important studying the internal environment?
(a) Internal factors
(b) External factors
(c) Operating environment
(d) General environment
Answer: Internal factors.

5. The business has ultimately no control over which of the following environment?
(a) Internal environment 
(b) External environment
(c) Macro environment
(d) Both b and c 
Answer: Both b and c.

6. The term macro environment is also known as _______ environment.
(a) Operating
(b) General
(c) Internal
(d) None of these
Answer: General.

7. The difference between the Internal and the External environment is that
(a) The internal environment is controllable by the business, but not the external environment
(b) The external environment is controllable by the business, but not the internal environment
(c) The internal environment influences the business but not the external environment
(d) None of these
Answer: The internal environment is controllable by the business, but not the external environment.

8. The customers that influence the business include _______.
(a) Government 
(b) Household
(c) Industry
(d) All of these
Answer: All of these.

9. Which of the following is not a factor of the internal environment?
(a) Objectives of business
(b) Production methods
(c) Policies of the business
(d) Marketing intermediaries
AnswerMarketing intermediaries.

10. Which of the following does not include in the features of internal environment?
(a) Under control of business
(b) Influence in the business
(c) Usually present within the business
(d) Located outside the business
AnswerLocated outside the business.

11. Which of the following is valid for the case of factors of the Microenvironment?
(a) They influence every industrial unit separately
(b) They influence every industrial unit in the same way
(c) They are far away related with the business
(d) Both b and c
AnswerThey influence every industrial unit separately.

12. Which of the following statements influence the micro environment of an organization?
(a) Different kinds of customers
(b) Relation between customer and organization
(c) Literacy rate of customer
(d) Both a and b
Answer: Both a and b.

13. Which of the following factors do not affect the external environment of an organization?
(a) Customers
(b) Suppliers
(c) Public
(d) Production capacity
Answer: Production capacity.

14. The features of the micro-environment include ______.
(a) Factors having distant relation with the business
(b) Factors that influence all business units in the same way
(c) Factors that business has no control over
(d) All of these
Answer: All of these.

15. How can competitors influence the business environment of an organization?
(a) By bringing innovative products
(b) By bringing cheap products
(c) By new sale promotion scheme 
(d) All of these
Answer: All of these.

16. Which of these cannot be wholly included in the business environment?
(a) External environment
(b) Internal environment
(c) Macro environment
(d) Both a and b 
Answer: Internal environment.

17. How many types of customer should an organization have?

(a) One 
(b) Two
(c) Three
(d) Many
Answer: Many.

18. Mr. Henry is a member of top level management in XYZ Limited. He is assigned the work of framing policies of the business, the objective of the firms, etc. Along with him, his partner is assigned work of determining production methods and capacity.
Identify the environment related to the above statement.

(a) Micro environment
(b) General environment
(c) Internal environment
(d) None of the above
Answer: Internal environment.
19.  Mr. Armin, a manager of ABC limited, works hard for growth of the business. He knows there are various factors influence their business differently from other firms in the same industry. He also knows that they don’t have any control over those factors as they belong outside the company. This is why Mr. Armin to maintain a good relationship with those factors influence their business separately.
Identify the type of environment to which the above factors are related with.

(a) Internal environment
(b) Microenvironment
(c) General environment
(d) None of the above
Answer: Micro environment.

20. Mr. Biden is the owner of a shoe selling company. He understands the importance of the business environment for the growth and survival of his business. His company maintains a good relationship with the customers by offering them better services and listening to their problems. They also maintain good relationship with the suppliers, the public, and agents to ensure no hindrance. 
Identify the type of environment highlighted in the above statement.

(a) Micro environment
(b) Macro environment
(c) Internal environment
(d) None of the above
Answer: Internal environment.

Business Environment Class 12 MCQS Online Test


Topic No 3: Dimensions of the Business Environment

1. The dimensions of business environment are known to be ______.
(a) Factors of internal environment 
(b) Factors of the operating environment
(c) Factors of macro environment
(d) None of these
AnswerFactors of macro environment.

2. Which of the following is included in the dimensions of Business environment______.
(a) Political environment
(b) Social environment
(c) Legal environment
(d) All of the above
Answer: All of the above.

3. The macro environment can be classified into _______.
(a) Economic and Non-economic environment
(b) Social and Economic environment 
(c) Economic and Political environment
(d) None of the above
Answer: Economic and Non-economic environment.

4. Select an appropriate option which is a significant element of the economic environment?
(a) Economic system 
(b) Economic policies
(c) Economic conditions
(d) All of these
Answer: All of these.

5. Which of the following environment refers to the aggregate of all the characteristics of the society where an organization exists?
(a) Economic environment
(b) Social environment
(c) Political environment
(d) Technological environment
Answer: Social environment.

6. How do specific health and fitness trend influence certain organizations?
(a) By creating demand for certain healthcare products
(b) By avoiding the use of unhealthy products
(c) By integrating moral values toward society
(d) Both a and b
Answer: Both a and b.

7. Select an appropriate option which is not a significant element of the social environment?
(a) Trends in society
(b) Values in society
(c) Traditions 
(d) Peace in society
Answer: Peace in society.

8. The dimensions of business environment may create ______ to an organization.
(a) Theft
(b) Opportunities
(c) Theft and opportunities
(d) None of these
AnswerTheft and opportunities.

9. Which of the following options contribute to the technological environment?
(a) Discovering new ways of production 
(b) Discovering new operating methods of a busines
(c) Changing the name of the business
(d) Both a and b
Answer: Both a and b.

10. _______ environment consists of the total of various legislations passed by the Government and decisions rendered by various commissions and agencies at every level of Government.
(a) Legal 
(b) Political
(c) Social
(d) Economical
Answer: Legal.

11. Select an appropriate option which is a pre-requisite for better business performance in Legal environment.
(a) Knowledge of culture and traditions
(b) Knowledge of the ideology of the Government
(c) Knowledge of rules and regulations framed by the Government
(d) None of the above
AnswerKnowledge of rules and regulations framed by the Government.

12. With the effect of the _______ environment, IBM and Coca-Cola had to leave India.
(a) Political

(b) Social
(c) Legal
(d) Economic
Answer: Political.

13. Economic policies are determined for regulating _______.

(a) Political environment 
(b) Social environment
(c) Economic environment
(d) Legal environment
Answer: Economic environment.

14. Many multinational companies entered the Indian market by introducing relaxation in _______.

(a) Foreign direct investment
(b) Foreign exchange 
(c) Foreign direct investment and Foreign exchange
(d) None of the above
AnswerForeign direct investment and Foreign exchange.

15. Which among the following is a factor of social environment?

(a) Values 
(b) Fashion
(c) Standard of living
(d) All of these
Answer: All of these.

16. The business environment dimensions may have a _______ effect on a running business.

(a) Positive
(b) Negative
(c) Either positive or negative
(d) None of the above 
Answer: None of the above.

17. Select an appropriate option that is not a factor in the legal environment.

(a) The acts passed by the government
(b) Political stability in the country
(c) Decision taken by various commissions
(d) The judgement of the court
AnswerPolitical stability in the country.

18. What were the consequences of the introducing relaxation in Foreign Direct Investment(FDI) and Foreign Exchange?

(a) Many multinationals left the Indian economy
(b) Increase in the foreign exchange reserve in the country
(c) Monopoly of multinational companies
(d) None of the above
AnswerIncrease in the foreign exchange reserve in the country.

19. High inflation rate is a problem for the business belongs to which of the following environment?

(a) Social environment
(b) Economic environment
(c) Technological environment
(d) Political environment
AnswerEconomic environment.

20. Select an appropriate option which can help a businessman expand his business in technological environment.
(a) By keeping an eye on technological changes
(b) Understanding technological changes in time.
(c) Sticking to the traditional methods
(d) Both a and b
Answer: Both a and b.

21. ______ environment resulted in the upliftment of the ban imposed on Foreign Direct Investment.

(a) Economical
(b) Legal
(c) Political 
(d) Social
Answer: Legal 

22. With the introduction smart LED televisions, the old CRT televisions are disregarded. Which component of the business environment is responsible for it?

(a) Legal 
(b) Economical 
(c) Technical
(d) Political
Answer: Technical. 

23. Due to the Coronavirus pandemic, people remained confined in their houses in the lockdown. So the food ordered from outside in the market began to be prepared at home. Now, people have become used to it, but this habit of people has primarily affected various industries in the market.
Identify the dimension of the business environment which is highlighted in the above incident.

(a) Economic Environment
(b) Social Environment
(c) Technological Environment
(d) Legal Environment
Answer: Social Environment.

24. The Government of India brought up the Startup India Scheme for various purposes. The objective of this scheme is to promote startups along with the generation of employment and wealth creation. In addition, the Government intents that youth should display their skills coming forward. Many people took advantage of this scheme and started their startups.
Identify the dimension of the Business Environment which is highlighted in the above incident.
(a) Economic Environment

(b) Social Environment
(c) Legal Environment
(d) Political Environment
Answer: Political Environment.

25. Online food ordering has been very much popular in recent years. People can get their favourite food sitting at home with just one click. This modern system has very profoundly affected the traditional system. According to the traditional system, the people doing business are worried and started taking measures to survive companies.
Identify the dimension of the business environment, which is highlighted in the above lines.
(a) Political environment

(b) Social environment
(c) Technological environment
(d) Legal Environment
Answer: Technological environment.

26. Mr. Rajesh, owner of XYZ limited, believes in growing his business through rightful activities. He knows the importance of law in business and is very careful about it. He knows that many business people are arrested for illegal activities like money laundering each year. But, Mr. Rajesh never supports such acts and believes in helping society.
Identify the dimension of the business environment, which is highlighted in the above statement.

(a) Political Environment
(b) Social Environment
(c) Economic Environment
(d) Legal Environment
Answer: Legal Environment.

27. Mr. Patil runs a vast shopping mall in city centre. He found that when the bank’s rate decreases, there is massive increase in the sale of their shopping mall and vice versa.
Identify the component of the business environment is the above case.

(a) Legal environment
(b) Political environment
(c) Economic environment
(d) Internal environment
Answer: Economic environment.

28. During the festival of Diwali, Rohit found out that his father was running their sweet-selling shop for 24 hours. He found that sale on that day was the highest in the past six months. People were even coming to shop at midnight to buy sweets. 
What component of the business environment led his father to open the sweet shop for a whole day?
(a) Economic environment

(b) Social environment
(c) Political environment
(d) Technical environment
Answer: Social environment.

29. Mr. Jagdeep is a content creator and is very popular among the youth. However, specific reasons he cannot copy content of other content the creators to develop his content. Jagdeep is well aware of this, but he also knows that he can use someone’s content after their permission.
Among the following business environments, select the one that hinders Jagdeep from copying content without consent.
(a) Political Environment
(b) Legal Environment
(c) Economic Environment
(d) Social Environment
Answer: Legal Environment.

30. There are some instances in the business environment when the very existence of a particular business is threatened by another company. For example = Radio Industry was adversely affected with the growing popularity of smartphones and televisions.
Which out of the below components of business environment highlight the above statement.

(a) Political environment

(b) Social environment
(c) Technological environment
(d) Legal Environment
Answer: Technological environment.

Class 12 Business Studies Chapter 3 MCQs

Topic No 4: Changes in Economic Environment – BST chapter 3 MCQS with Answers

1. What steps were taken by the government of India in 1991 to take the country out of economic problems?

(a) Privatization was abolished
(b) International trade was restricted
(c) Public companies were promoted
(d) Economic reforms were introduced
AnswerEconomic reforms were introduced.

2. Which of the following are not the economic reforms introduced in 1991?

(a) Liberalization
(b) Globalization
(c) Privatization
(d) Nationalization
Answer: Nationalization.

3. Privatization means ________.

(a) Undertaking of some public sector partially under private sector
(b) Undertaking of some public sector completely under private sector
(c) Undertaking of some private sector completely under public sector
(d) Both a and b
Answer: Both a and b.

4. Select an appropriate option which is not an objective of Economic reforms.

(a) Encouraging private sector
(b) Attracting foreign investment
(c) Increasing foreign exchange reserves
(d) None of the above
Answer: None of the above.

5. Privatization is also known as

(a) Disinvestment of the public sector
(b) Disinvestment of the public sector
(c) Both a and b
(d) None of the above
AnswerDisinvestment of the public sector.

6. Which of the following restrictions were imposed on the International Trade regulation till 1991?

(a) Quantitative restrictions
(b) Tariff restrictions
(c) Licensing of imports
(d) All of the above
Answer: All of the above.

7. Integrating the economy with the economies of the rest of the world is known as _______.

(a) Liberalization
(b) Privatization
(c) Globalization
(d) Nationalization
Answer: Globalization.

8. How did the government treat the price control over various products while bringing up economic reforms?

(a) By promoting price control over various products
(b) By dismantling price control over various products
(c) By neglecting price control over various products
(d) None of the above
AnswerBy dismantling price control over various products.

9. The policy related to income and expenditure is known as ______.

(a) New trade policy
(b) New Industrial policy
(c) Monetary policy
(d) Fiscal policy
Answer: Fiscal policy.

10. Who are the different competitors a particular local business faces in a country?

(a) New and old companies
(b) Multinational companies
(c) Imports
(d) All of the above
Answer: All of the above.

11. In which of the following ways the economic reforms have influenced the Indian industry and businesses?

(a) Positive
(b) Negative
(c) Neutral
(d) None of the above
Answer: Positive.

12. With the impact of economic reforms, the importance of public sector is ______.

(a) Declined
(b) Raised
(c) Neutral
(d) None of the above
Answer: Declined.

13. What was the impact of economic reform on the technological environment?

(a) It underwent rapid changes
(b) It declined after economic reforms
(c) No Impact 
(d) None of the above
AnswerIt underwent rapid changes.

14. When the status of ‘legal tender’ to a currency being used in an economy as a medium of exchange is withdrawn, the event thereof is called ______.

(a) Liberalization
(b) Investment
(c) Demonetization
(d) None of the above
Answer: Demonetization.

15. What happens to the demonetized currency after the event of demonetization?

(a) The purchasing power of it becomes null
(b) Its purchasing power of it increases
(c) The purchasing power of it is not effected
(d) None of the above
AnswerThe purchasing power of it becomes null.

16. How were the cash transactions affected by demonetization?

(a) Declined
(b) Increased
(c) No impact
(d) Sky rocketed
Answer: Declined.
17. Which of the following decides product price under price control?

(a) Firms
(b) Government
(c) People
(d) Both a and b
Answer: Government

18. Which of the following ways of transaction highly increased after demonetization 

(a) Cash transactions
(b) Digital transactions
(c) Cash and digital transactions
(d) None of the above
Answer: Digital transactions.

19. Select an appropriate option in which a fall could be seen after demonetization?

(a) Digitalized transactions
(b) Prices of real estate
(c) Income tax collection
(d) Bank deposits
Answer: Prices of real estate.

20. Out of the following policies, in which policy does the RBI keep control on the money supply to get the objectives of the general economic policies?

(a) Trade policies
(b) Fiscal policies
(c) Monetary policies
(d) Industrial policies
Answer: Monetary policies.

21. Under price control, the firms will sell goods at the ______ price.

(a) Government
(b) Market
(c) Desired
(d) Maximum
Answer: Government.

22. The concept of the market orientation means
(a) Production first and sale later

(b) Study the market first and production later
(c) Production first and study of the market later
(d) None of the above
AnswerStudy the market first and production later.
23. What was the impact of economic policy changes on the public sector? 

(a) Loss of budgetary source from government
(b) Increase in privatization
(c) Lack of financial assistance from the government 
(d) All of the above
Answer: All of the above.

24. How can public sector face or overcome the problems raised after changes in economic policy of India?

(a) By becoming more efficient
(b) By generating their resources
(c) By coming under the private sector
(d) Both a and b
Answer: Both a and b.

25. Which of the following was not the impact of changes in the economic policy of India?

(a) Increasing competition
(b) Rapid changes in the technical environment
(c) Market orientation
(d) Increase in fiscal support to the public sector
AnswerIncrease in fiscal support to public sector.
We hope that the given MCQs of Business Environment Chapter with Answers will help you. 
Related Articles:

Leave a Comment