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Subjects

Business Studies

Political environment

In Class 12 Business Studies, Political Environment is studied as an important dimension of the Business Environment. Students learn how government policies, political stability, ideology, administrative decisions and changes in laws can influence business operations and growth. The topic explains why businesses must monitor decisions related to taxation, trade, licensing, public expenditure and regulation, and adapt their plans to changing political conditions while recognising their responsibilities towards society and the economy.

Medium · Level 3 · 25 questions

Practice questions

01In which condition will political environment affect financial planning?

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02Which business may need to change its plan immediately due to a change in customs duty by government?

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03In which situation does political environment create a long-term opportunity for business?

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04Which is the most correct medium-level conclusion about political environment?

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05A company studies election results before setting up a long term plant. This is monitoring of which environment?

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06If the government suddenly raises import duty what should a firm dependent on imported raw material do first?

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07An entrepreneur finds that the new government is giving priority to small industries. What type of signal is this for him?

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08How does policy stability help in investment decisions?

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09The government removes compulsory licensing in a sector. What can be a likely effect on existing companies?

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10If law and order worsens in a state what effect is possible on retail business?

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11While assessing political risk what should a multinational company focus on more?

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12Government preference for domestic products in public procurement is an example of what?

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13A company changes its production process because of pollution rules. What response does this show?

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14Relaxation in foreign direct investment rules can especially benefit which type of company?

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15What can be the effect of frequent government changes on long term business strategy?

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16The government encourages industries in a backward region with tax relief. What objective does this show?

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17In which situation can political environment become a barrier for business?

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18If the government controls the price of an essential good what can be the main challenge for producers?

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19A company reads the new industrial policy and decides to increase production capacity. What does this show?

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20How does policy transparency affect investor behaviour?

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21In the context of political environment what is the simple meaning of lobbying?

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22Government simplification of startup registration is what type of political effect?

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23Which decision can affect the competitiveness of an exporting company?

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24What can be the effect of administrative delays on business in political environment?

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25If the government bans import of some technology on national security grounds what should a firm understand?

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