SIKKIM MANIPAL UNIVERSITY - DDE

BBA 103- BUSINESS ENVIRONMENT- 4 Credits

Book Id- B1499

MODEL QUESTION PAPER - Keys

Duration: 2hrs Total Marks: 140

_______________________________________________________________________

Part A- One Mark Questions (1-50) 1* 50 = 50 Marks

1. Businesses may face problems due to___________________________which may be

because of rigid government laws.
a. Restrictive business environment
b. Present and future viability
c. Cost of capital
d. Public awareness

2. _______________ is a record of its economic transactions with the rest of the

world.
a. International Business
b. Foreign Exchange
c. Balance of Trade
d. Balance of payments

3. ________________ refers to the system of moral principles and rules of conduct

applied to business.
a. Human Resource
b. Information System
c. Business Ethics
d. Organisation Behaviour

4. Business organizations must operate within a framework laid down by the

__________ in power.
a. Government
b. Monetary policy
c. Fiscal policies
d. Private sector

5. The ______________ is the key factor that regulates the capitalist economy
a. Free Private Enterprise
b. Foreign Exchange
c. Market mechanism

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d. Freedom of production

6. The main concerns of a _______________ are finance, money and credit

a. Ecological System
b. Political System
c. Fiscal System
d. Financial System

7. The word Law is a general term that implies varied purposes. In terms of legal
system it denotes the rules and regulations that have been enacted by the
____________ to govern various aspects of public and personal life
a. Legislature
b. Citizens forum
c. Judiciary
d. Central Industrial Relations Machinery

8. Direct involvement of the government in business is an important feature of

___________________
a. single rule
b. Socialist Economy
c. Military government
d. Monarchy

9. Janata government put more emphasis on ___________________ to curb

unemployment and poverty
a. Adult Education
b. Large scale industries
c. Small scale industries
d. Defence Establishment

10. _____________ refers to transfer of ownership of public sector enterprises from

the government to the private sector.
a. Nationalization
b. Privatization
c. Public Ownership
d. Autonomous body

11. ________________ is the integration of national economies into international

economy
a. Economic Globalization
b. Human Resources
c. Natural Resources
d. Regional integration

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12. The first half of the 20th century was marked by a major ___________________
a. Famine & floods
b. Rivalry among nations
c. Worldwide depression
d. Cross-border terrorism

13. __________________ means to serve the people or the community without

expecting anything
a. Political responsibility
b. Constitutional responsibility
c. Social responsibility
d. Legal responsibility

14. The growth of public sector led to the growth of (SOEs), State owned enterprises
in India. ______________________ 1956 &1991, gave the public sector a strategic
role in the Indian economy.
a. Indian Trade Regulations
b. Indian Commodity Act
c. Indian Goods Act
d. Industrial Policy Regulations

15. Indian Economy will be _______________ in the world, in terms of purchase

power
a. third largest
b. fourth largest
c. fifth largest
d. second largest

16. Business involves making a choice among a set of alternative courses of action
which is the essence of all ______________ problems.
a. Social
b. Internal
c. External
d. Economic

17. The business sector has economic relation with the government, household
sector,_____________ and the global sector.
a. Capital market
b. Money market
c. Primary Market
d. Secondary Market

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18. The traditional objective of Business was _________________.
a. Funds maximization
b. Profit maximization.
c. Wealth maximization
d. Surplus

19. Business environment refers to the sum total of internal and external forces
operating on an _____________.
a. Industry
b. Society
c. Organization.
d. Policy

20. A _____________ is an economy which combines the elements of both the

capitalist and the socialist economies.
a. Mixed economy
b. Unemployment
c. Production activities
d. Rural planning

21. The main function of the financial system is to act as a ___________________

between widely dispersed savers and seekers of funds
a. Legal intermediary
b. Financial intermediary
c. Government Intermediary
d. Cooperative Institution

22. The chief source of the English law is the _______________ as supplemented by
Equity and Statute Law
a. Common Law
b. European Law
c. British Law
d. Queen's Law

23. The root of the problem in 1991 _____________ was the large and growing fiscal
imbalance
a. Political crisis
b. Economic crisis
c. Environmental crisis
d. Agricultural expenditure

24. Which among following are not categorised as monopoly industry under state
a. Arms and Ammunition
b. Atomic Energy

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c. Rail Transport
d. Aviation

25. __________ is the license to market a companys goods and services in a

designated geographical area
a. Franchising
b. Joint Venture
c. Consignee Agent
d. Distribution

26. Which amongst the following is the correct expansion of IBRD ?

a. International Bank of Research & Development
b. International Board of Research & Development
c. International Bank of Rural & Development
d. International Bank for Reconstruction and Development

27. The regional integration for promotion of international business is called as

________________
a. Trading blocks
b. Transport blocks
c. Trade protectionism
d. Tariff Block

28. To establish a good corporate image, business organizations include social

responsibility as a __________________.
a. Commercial Objective
b. Expansion Objective
c. Strategic Alliance
d. Corporate objective

29. The main job of committee on public undertakings (CPU) to examine the
autonomy and __________ of Public Enterprises
a. Efficiency
b. Recruitment
c. Training
d. Transfer

30. Indian Railways is the world's _____________ rail network and the second largest
under a single management
a. Third largest
b. Second largest
c. Fifth largest
d. Fourth largest

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31. Marketing intermediaries are an important part of the system who deliver value to
______________
a. Suppliers
b. Distributors
c. Customers
d. Competitors

32. Economic policies refer to the monetary and ________________ that affect the
growth rate of the economy and the attained price stability in the economy
a. Government policy
b. Public policy
c. Fiscal policies
d. Instruments of monetary policy

33. ________________refers to the extent that an organizations activities are known

to persons outside the organization.
a. Cultural adaptation
b. Business ethics
c. Technological change
d. Public Visibility

34. The socio-economic objectives are clearly enshrined in the preamble to the
constitution, ______________ and directive principles of state policy.
a. Political justice
b. Cultural
c. Fundamental Rights
d. Economic powers

35. Planning has replaced the ________________ in a Socialist economy

a. Population
b. Social welfare
c. Price mechanism
d. Adhoc decision

36. _________ acts as the medium of exchange or transaction

a. Money
b. Credit
c. Goods
d. Services

37. _________can be defined as the habitual course of conduct observed uniformly

and voluntarily by the people concerned
a. Culture
b. Society

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c. Customs
d. Code

38. The Russian Revolution of 1917 and the establishment of ____________ in the
USSR impacted business and economy globally
a. Military Rule
b. Democracy
c. Dictatorship
d. Communism

39. The first _________________paved the way for a mixed socialist economy
a. Foreign policy
b. Industrial policy
c. Internal policy
d. External policy

40. Which amongst the following are not objectives of the Disinvestment ?
a. Reducing financial burden of the government
b. Modernisation and Upgradation of PSE's
c.To improve growth
d. Discourage new assets with private hands

41. Which among following are objectives of International Monetary Fund ?

a. Lending funds for purchasing military equipment
b. Assistance individual trader
c. Assistance to Non-member countries
d. The elimination or reduction of existing exchange controls

42. ________________ refers to abolishing all trade restrictions and barriers and
charge very low rates of tariffs among group of countries
a. Border Area
b. Potential zone
c. Port area
d. Free Trade Area

43. The _________ programme of HUL meant for the rural women for earning extra
income is highly commendable
a. Business for poor
b. Shakthi
c. Empowerment
d. Adult Education

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44. The government selected nine PSUs for making them world class entities and
named these PSUs as ________________
a. Profit Centres
b. Navaratnas
c. Productive Centres
d. Monopoly Centres

45. India is now a chosen destination for outsourcing projects and offers a big
______________
a. Industrial sector
b. Textile sector
c. Literate base
d. consumer base

46. A free market is a market in which there is no ________________and regulation

by the state, except to enforce taxes, private contracts, and the ownership of property.
a. Purchasing power
b. Capital receipts
c. Economic intervention
d. Inflation

47. The ______________regulates the functioning of various commercial banks and

other financial institutions in India
a. Central Bank of India
b. Reserve Bank of India
c. State Bank of India
d. Securities and exchange board of India

48. Which among the following are not the responsibility of Department of Industrial
Policy & Promotion (DIPP) ?
a. Formulation
b. Implementation of promotions
c. Subsidy for Agricultural sector
d. Industrial Sector

49. The important argument in favour of disinvestment in India is the contribution it

can make to improve the ___________ of the enterprise
a. Quality
b. Efficiency
c. Sales
d. Production

50. The single currency in EU came into effect from 1998, but except in three
countries Britain, ____________ and Sweden

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a. Denmark
b. Ukraine
c. Bosnia
d. Georgia

Part B-Two Marks Questions (51-75) 25*2= 50 Marks

51. State whether statement is true or false

1.The internal factors are generally regarded as controllable factors because the
company has control over these factors and can alter or modify such factors to suit the
environment.
2.The external factors such as the economic factors, socio-cultural factors,
government and legal factors are generally regarded as controllable factors.

a. 1T, 2F
b. 1F, 2T
c. 1T, 2T
d. 1F, 2F

52. State whether statement is true or false

1.Policy mix refers to the combination of monetary and stabilization policesin use, at
a given time. A policy mix that consists of a decrease in government spending and an
increase in money supply would favour investment.
2.Economic policies not only directly affect business environment, they also change
the aggregate demand which causes a huge impact on the business activities.

a. 1T, 2F
b. 1T, 2T
c. 1F, 2T
d. 1F, 2F

53. State whether statement is true or false

1. Professionalization makes business more efficient, dynamic and socially
responsible. The growth of management education has contributed to professionalism
in the business field.
2. Certain groups of people love stability and they would always create resistance to
change. Others on the other hand encourage change and try to discourage innovation.

a. 1F, 2T
b. 1F, 2F
c. 1T, 2T
d. 1T, 2F

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54. Which is not granted to people in Fundamental Rights?
a. Right to Equality
b. Deprivation of property
c. Cultural and Educational Rights
d. Right to Constitutional Remedies

55. State whether statement is true or false

1.The Indian economy is a complex mixed economic system. Some industries may be
completely State-owned, some may be privately owned and some may be jointly
owned.
2. An economic system refers to the organizational behaviour and process through
which a society makes its production and consumption decisions

a. 1F, 2T
b. 1T, 2T
c. 1T, 2F
d. 1F, 2F

56. A financial system or financial sector functions as an intermediary and facilitates

the flow of funds from the areas of _______ to the areas of __________
a. Surplus, deficit
b. deficit, surplus
c. Venture, Capital
d. Trade, Banks

57. State whether the statement is true or false

1. Law is an instrument that the State uses to provide justice, stability and Financial
security in society.
2. Law may be defined as an Act passed by the legislature and assented to by the
President of India or the Governor of a state.

a. 1T, 2F
b. 1F, 2T
c. 1T, 2T
d. 1F, 2F

58. State whether statement is true or false

1. Indian Government started playing a proactive role post 1991 crisis.
2. Control on Industrial Investment increases Import tariffs.

a. 1F, 2T
b. 1F, 2F
c. 1T, 2T
d. 1T, 2F

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59. State whether statement true or false
1. Under the Monopolies and Restrictive Trade Practices Act, all firms with assets
above a certain size (100 crores since 1985) were classified as MRTP firms.
2. The principal objective of the Act was to encourage concentration of economic
power and control of monopolies.

a. 1F, 2T
b. 1T, 2F
c. 1T, 2T
d. 1F, 2F

60. Some of the obstacles government face during Disinvestment are:

1. Government tries to sell the least profitable enterprise which the private sector is
willing to buy at a price acceptable to the government
2. Disinvestment tend to raise political opposition from employees who may fear of
loosing their jobs.

a. 1F, 2T
b. 1T, 2F
c. 1T, 2T
d. 1F, 2F

61. Contributed quota (IMF) of a country determines its_____________ and

______________
a. borrowing rights, voting strength
b. Political power, Population
c. Literates, Technician
d. Military Strength, Logistics

62. Which among the following are not part of main objective of Mercosuris.
a. Establishment of free trade zone
b. to free Mercosuris from external trade barriers
c. A common external tariff (a customs union).
d.Free movement of capital, labour and services

63. State whether the statement is true or false

Some welfare schemes followed by TISCO since its operation in 1911 are as
enumerated below
1.In India an eight hour shift was first introduced by TISCO in 1912.
2. A welfare department was introduced and welfare activities started in 1910.

a. 1T, 2F
b. 1T, 2T

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c. 1F, 2T
d. 1F, 2F

64. State whether statement is true or false

The important characteristics of Departmental Undertakings are:
1. Its permanent staff consists of civil servants. The recruitment process is not same
like other civil servants.
2.The procedure for filing suits against it, is the same as against the government.

a. 1T, 2T
b. 1F, 2F
c. 1T, 2F
d. 1F, 2T

65. State whether statement is true or false

challenges which lie ahead in the infrastructural sector are:
1. The airports, runways and terminals have to be modernized and updated to
international standards
2. India suffers from one of the lowest telephone penetrations in the world

a. 1T, 2T
b. 1F, 2F
c. 1F, 2T
d. 1T, 2F

66. 1. Monetary policy is a tool that a national Government uses to control the supply
and availability of money, to influence the overall economic activity.
2. An open economy is an economy in which there are economic activities between
domestic community and the national community.

a. 1T, 2F
b. 1F, 2T
c. 1F, 2F
d. 1T, 2T

67. 1.The framework of governmental economic ideology, policies, regulations and

legislation as well as the Governments relationship with business organizations form
are not a part of political business environment.
2. Political system can be defined as a complete set of institutions, interest
groups such as political parties, trade unions, lobby groups as well as the relationships
between those institutions and the political norms and rules that govern their
functions.

a. 1T, 2F

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b. 1T, 2T
c. 1F, 2F
d. 1F, 2T

68. 1.Capitalist economy is not concerned with productive resources are owned by
private individuals, who use these resources to earn profits and government
intervention is minimum.
2. The public sector may not be very efficient due to lack of initiative and
responsibility on the part of bureaucrats.

a. 1F, 2T
b. 1F, 2F
c. 1T, 2F
d. 1T, 2T

69. State whether the statement is true or false

1. The credit union is a co-operative financial institution, which is usually controlled
by the Non-members of the union
2. Stock brokerage firms help both the corporations and individuals to invest in the
stock market

a. 1F, 2T
b. 1T, 2F
c. 1F, 2F
d. 1T, 2T

70. Which among following are sources recognized by Law itself as authoritative?
1. Juristic Writings
2. Statutes and law
3. Literary Writings
4. Customary Law

a. 1 & 3
b. 1 & 4
c. 2 & 4
d. 3 & 4

71. The major purpose of business legislation includes protection of companies from
________________, protection of consumers from ______________ practices and
protection of the interests of society from unbridled business behavior

a. Provision of law, Unfair incentives

b. Unfair competition, Unfair business
c. Unfair Adv., pollution

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d. Credit facility, Dumping

72. State whether statement is true or false

1. Industrial Policy Resolution 1956 had reserved 10 industries for the public sector
2. The industrial policy of 1991 reduced the number of such industries to eight.

a. 1F, 2T
b. 1T, 2F
c. 1T, 2T
d. 1F, 2F

73. Which among the following are two major reasons for disinvestment in India ?
a. Human resources, literacy
b. fiscal support, efficiency of enterprise
c. Labour, Union
d. Compelling need, political pressure

74. State whether the statement is true or false

The main functions of the World Bank are:
1. To help its member countries in the reconstruction and developmental work by
facilitating the investment of capital for productive purposes.
2. To encourage private domestic investment

a. 1F, 2T
b. 1T, 2F
c. 1F, 2F
d. 1T, 2T

75. State whether statement is true or false

1. Indian agricultural sector has emerged as the unsung hero in India's efforts to
increase its global presence
2. India has the world's second largest road network, over 3.34 million kilometers in
the aggregate

a. 1T, 2F
b. 1T, 2T
c. 1F, 2F
d. 1F, 2T

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 Part C
Answer all questions 4*10=40 Marks

76. Explain the different instruments of Monetary Policies.

Refer Unit 2

77. Discuss the industrial laws that are applicable to India.

Refer Unit 7

78. Compare GATT and WTO.

Refer Unit 12

79. Explain how Public sector enterprises are organised in India.

Refer Unit 14

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