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Why should business watch the political environment?

Answer and explanation

Correct answer: To make plans according to changes in government policies

The political environment includes government policies, laws, taxation and regulations. Changes in these can affect a business’s costs, production, investment and market plans. Therefore, a business must monitor such changes and plan accordingly. Option A concerns employee behaviour, not the political environment. Exam tip: Link the impact of the political environment with changes in government policy and regulation.

Related tags

Business EnvironmentPolitical EnvironmentGovernment PolicyBusiness PlanningClass 12Business StudiesClass 12 Mcq

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