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The government gave special tax concessions to industries to attract investment. This is a sign of which dimension?

Answer and explanation

Correct answer: Political dimension

The governing concept is that the political environment covers government actions, policy choices, priorities and the broader approach toward business. A tax concession is a deliberate incentive announced or provided by the government to influence investment decisions. Hence option D, the political dimension, is the best answer. The concession has an economic effect because it can reduce firms’ tax burden and improve expected returns, but the question asks what kind of environmental sign it is: its immediate source is a government policy decision. It is not a social demographic trend, a technological development or merely a general legal rule applying without a policy objective.

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Business EnvironmentPolitical EnvironmentTax ConcessionLegal EnvironmentBusiness StudiesClass 12 Mcq

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