Business Environment MCQs – Gk By Mr. DJ

1. Liberalization means

A. Free determination of interest rates

B. Liberating the industry, trade and economy from unwanted restrictions

C. Opening up of economy to the world by attaining international competitiveness

D. Reducing number of reserved industries from 17 to 8

Answer: B

2. When a company taken over another one and clearly becomes the new owner, the action is called

A. Acquisition

B. Merger

C. Strategic Alliance

D. None of the above

Answer: A

3. By which act does the government check restrictive trade?

A. MRTP Act

B. FEMA act

C. Industrial Policy Act 1991

D. None of these

Answer: A

4. Which among the following is not opened for private sector participation

A. Railways

B. Telecommunication sector

C. Education sector

D. Power sector

Answer: A

5. Which among these can be the condition for the success of privatisation?

A. Measurability of performance

B. Alternative institutional arrangements

C. Barriers to enter the market

D. All of the above

Answer: C

6. Which among these is monopolistic trade practice?

A. Manufacturing only one product

B. Selling only one product

C. Limiting technical Development

D. Unreasonably limiting competition

Answer: A

7. The Industrial policy resolution was passed first in

A. 1947

B. 1956

C. 1931

D.1999

Answer: B

8. Globalisation is the term used to describe process of removal of restriction on

A. Investment

B. Foreign Trade

C. Both (A) and (B)

D. None of the above

Answer: C

9. Laissez Faire policy is adopted in

A. Socialist Economic system

B. Capitalist Economic system

C. Communist Economic System

D. Mixed Economic System

Answer: B

10. Which one is not the main objective of Fiscal Policy in India?

A. To promote employment opportunities

B. To minimize the inequalities of income and wealth

C. To promote price stability

D. To increase liquidity in economy

Answer: D

1. In which production India has attained self-sufficiency?

1. Fertilizers
2. Edible oil
3. Petroleum
4. Food grains

Correct answer: (D)
Food grains

2. Closed economy’ is one in which

1. Only export takes place
2. Neither exports nor imports take place
3. Money supply is fully controlled
4. Exchange rates are under a full control of the government

Correct answer: (B)
Neither exports nor imports take place

3. The largest share in India’s national income is from

1. Service sector
2. Agriculture sector
3. Manufacturing sector
4. Trade sector

Correct answer: (A)
Service sector

4. Which of the following countries per capita income is the highest?

1. India
2. Bangladesh
3. Thailand
4. Pakistan

Correct answer: (C)
Thailand

5. Which of the following is not a fundamental right enshrined in the Indian Constitution?

1. Right to freedom of religion
2. Right to equality
3. Right to equal pay for equal work for men as well as women
4. Right to freedom of thought and expression

Correct answer: (C)
Right to equal pay for equal work for men as well as women

6. Among the supply side measures to control inflation is

1. Curtailing public expenditure
2. Mopping up excess liquidity through taxation
3. Credit control measures of RBI
4. Maintaining price levels through ‘administered price mechanism’ and ‘effective PDS’

Correct answer: (D)
Maintaining price levels through ‘administered price mechanism’ and ‘effective PDS’

7. Which of the following items is not included in a country’s balance of payments?

1. Shipping services
2. Interest received from abroad
3. Import and export duties
4. Tourists’ expenditure

Correct answer: (C)
Import and export duties

8. Which of the following is the most integrated form of regional economic arrangement?

1. Customs union
2. Economic union
3. Free trade area
4. Multilateral trading area

Correct answer: (B)
Economic union

9. A situation where a country exports a product at a price below its cost of production.

1. Full cost pricing
2. New protectionism
3. Dumping
4. Price skimming

Correct answer: (C)
Dumping

10. Coca Cola is a good example of a ___________________ MNC (Multinational Corporation).

1. conglomerate
2. free-standing
3. vertically integrated
4. horizontally integrated

Correct answer: (A)
conglomerate

11. Which of the following is NOT likely to be a benefit that host countries will obtain from MNCs?

1. Technology transfer
2. Import substitution
3. The ability to impose high tax rates on them
4. Job creation

Correct answer: (A)
Technology transfer

12. Which of the following can be a disadvantage to the host country of MNC investment:

1. Drives out domestic competitors
2. Sends profits abroad
3. Threatens to leave if not “helped”.
4. Imports components

Correct answer: (A)
Drives out domestic competitors

13. National Income estimates in India is prepared by

1. Planning Commission
2. RBI
3. Finance Ministry
4. C.S.O

Correct answer: (D)
C.S.O

14. Mixed economy means

1. Co–existence of small and large industries
2. Promoting both agriculture and industries in the economy
3. Co–existence rich and poor
4. Co–existence of public and private sectors

Correct answer: (D)
Co-existence of public and private sectors

15. Black money in India

1. Raises domestic prices
2. Encourages lavish consumption
3. Causes loss of revenue to the exchequer
4. Effects all of the above

Correct answer: (D)
Effects all of the above

16. Income tax is an item of

1. Concurrent List
2. State list
3. Union List
4. Residuary List

Correct answer: (C)
Union List

17. Inflation, in theory occurs

1. When prices of essential commodities outstrip income
2. When money supply grows at a higher rate than GDP in real terms
3. When exchange rate of domestic currency falls in foreign exchange markets
4. When fiscal deficit exceeds balance of payments deficit.

Correct answer: (B)
When money supply grows at a higher rate than GDP in real terms

18. The objective of case-study is

1. Remedial
2. Diagnostic
3. Educational
4. All of the above

Correct answer: (C)
Educational

19. Which of the following regulates the working of stock markets in India?

1. FEMA
2. RBI
3. SEBI
4. Ministry of Finance

Correct answer: (C)
SEBI

20. Find the odd one out

1. IOCL
2. HPCL
3. ONGC Ltd.
4. ESSAR OIL

Correct answer: (D)
ESSAR OIL

21. The main watchdog of international trade is

1. IMF
2. World Bank
3. WTO
4. UNCTAD

Correct answer: (C)
WTO

22. Who is the Chairman of NDC?

1. Finance Minister
2. Prime Minister
3. Lok Sabha Speaker
4. Minister of Planning

Correct answer: (B)
Prime Minister

23. India is not a member of

1. G-15
2. ASEAN
3. UNO
4. ILO

Correct answer: (B)
ASEAN

24. Stagflation means

1. Inflation with recession
2. Recession and stagnation
3. Inflation galloping like a stag
4. Inflation and increasing output

Correct answer: (A)
Inflation with recession

25. ‘Level playing field’ argument of industries requires

1. MNCs to be stopped from investing in India
2. Licence to MNCs be given only in environment-friendly technologies
3. MNCs to be treated at par with the domestic industry
4. Domestic industry to be given preference over MNCs.

Correct answer: (C)
MNCs to be treated at par with the domestic industry

26. Which two of the following are the most likely effects of the imposition of a tariff on an imported good?

1. The domestic price of the imported good will fall
2. Overseas production of the good may be stimulated
3. Overseas employment will rise
4. The domestic price of the imported good will rise
5. Gain of tax revenue by the government

1. (c) and (d)
2. (a) and (c)
3. (d) and (e)
4. (b) and (d)

Correct answer: (C)
d) and (e)

27. Which two of the following arguments are most likely to be used to justify protectionism?

1. To protect high cost domestic industries
2. To protect strategically important industries
3. To protect industries which are still immature
4. To maximise government tax revenue
5. To protect environmental standards

1. (d) and (e)
2. (a) and (b)
3. (c) and (d)
4. (b) and (c)

Correct answer: (D)
b) and c)

28. A protectionist measure whereby members of a regional trading bloc agree to impose an identical rate of protection on all goods imported from non-member countries.

1. Common quota arrangements
2. Non-tariff agreement
3. Technological standards control
4. VER agreements

Correct answer: (B)
Non-tariff agreement

29. A situation where any advantage given by one member of the WTO to another member must be extended to all WTO members.

1. The excessive invoicing principle
2. The intra-regional principle
3. The trade diversion principle
4. The most favoured nation principle

Correct answer: (D)
The most favoured nation principle

30. MNCs are in a good position to vary their strategies in different phases of the product life cycle. For instance in the ______________ phase(s) they will usually ___________

1. decline, maintain high prices
2. launch, move production to low-cost countries
3. growth and maturity, move production to low-cost countries
4. growth, maintain high prices

Correct answer: (C)
growth and maturity, move production to low-cost countries