Business Environment 1

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Objective Questions and Answers of MBA: Business Environment 1

Subject: Objective Questions and Answers of MBA: Business Environment 1

Part 1: Objective questions and answers of Business Environment


Q1. Closed economy is one in which

a) Only export takes place

b) Neither exports nor imports take place

c) Money supply is fully controlled

d) Exchange rates are under a full control of the government


Q2. Which of the following countries per capita income is the highest?

a) India

b) Bangladesh

c) Thailand

d) Pakistan


Q3. Among the supply-side measures to control inflation is

a) Curtailing public expenditure

b) Mopping up excess liquidity through taxation

c) Credit control measures of RBI

d) Maintaining price levels through 'administered price mechanism' and 'effective pds'


Q4. Which of the following is the most integrated form of regional economic arrangement?

a) Customs union

b) Economic union

c) Free trade area

d) Multilateral trading area


Q5. Coca cola is a good example of a ___________________ MNC

a) Conglomerate

b) Free-standing

c) Vertically integrated

d) Horizontally integrated


Q6. Which of the following can be a disadvantage to the host country of MNC investment?

a) Drives out domestic competitors

b) Sends profits abroad

c) Threatens to leave if not "helped".

d) Imports components


Q7. Mixed economy means

a) Co–existence of small and large industries

b) Promoting both agriculture and industries in the economy

c) Co–existence rich and poor

d) Co–existence of public and private sectors


Q8. Income tax is an item of

a) Concurrent list

b) State list

c) Union list

d) Residuary list


Q9. The objective of case-study is

a) Remedial

b) Diagnostic

c) Educational

d) All of the above


Q10. Find the odd one out






Q11. Who is the chairman of NDC?

a) Finance minister

b) Prime minister

c) Lok sabha speaker

d) Minister of planning


Q12. Stagflation means

a) Inflation with recession

b) Recession and stagnation

c) Inflation galloping like a stag

d) Inflation and increasing output


Q13. Which two of the following are the most likely effects of the imposition of a tariff on an imported good?

(a) The domestic price of the imported good will fall

(b) Overseas production of the good may be stimulated

(c) Overseas employment will rise

(d) The domestic price of the imported good will rise

(e) Gain of tax revenue by the government

a) (c) and (d)

b) (a) and (c)

c) (d) and (e)

d) (b) and (d)


Q14. 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.

a) Common quota arrangements

b) Non-tariff agreement

c) Technological standards control

d) Ver agreements


Q15. When mncs reduce their tax bill in different host countries this is usually done by a technique called:

a) Technology transfer.

b) Transfer pricing.

c) Import substitution.

d) Product switching.


Q16. The plan holiday refers to the period

a) 1965-68

b) 1966-69

c) 1967-70

d) 1978-80


Q17. An MNC (multinational company or corporation) can be defined as a firm which:

a) Is beyond the control of any government.

b) Is one of the largest 200 firms in the world?

c) Operates directly or owns subsidiaries in more than one country

d) All of the above


Q18. In a flexible exchange-rate system, an increase in the domestic interest rate would tend to

a) Improve the current account and worsen the capital account

b) Improve the capital account and worsen the current account.

c) Improve both the current and the capital accounts.

d) Worsen both the accounts.


Q19. The president of India is elected by

a) Parliament (i.e. Both the lok sabha and the rajya sabha)

b) By an Electoral College comprising of the elected members of the lok sabha, the rajya sabha and the state legislatures.

c) Together by the central and the state governments

d) By the people directly


Q20. ______________ are the directives to the various government and non-government agencies and are fundamental in the governance of the country.

a) State policies.

b) Fundamental rights.

c) Directive principles.

d) Fundamental rules.


Part 1: Objective questions and answers of Business Environment


Q1. Answer b


Q2. Answer c


Q3. Answer d


Q4. Answer b


Q5. Answer a


Q6. Answer a


Q7. Answer d


Q8. Answer c


Q9. Answer c


Q10. Answer d


Q11. Answer b


Q12. Answer a


Q13. Answer c


Q14. Answer b


Q15. Answer b


Q16. Answer b


Q17. Answer c


Q18. Answer c


Q19. Answer b


Q20. Answer c

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