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What effect can a policy announcement have on business in political environment?

Answer and explanation

Correct answer: Business may change its plan

Direct answer: Option A, the business may change its plan. A policy announcement communicates a possible or intended change in government rules, support, taxation, licensing, trade, investment, or other business conditions. Businesses study such announcements and adjust budgets, production, prices, investment, hiring, or expansion plans when necessary. The reasoning is: policy direction is announced → expected business conditions change → management reviews the effects → the plan may be modified. Option A is correct because planning must respond to important policy changes. The word “may” is important: every announcement does not force every business to change its plan. Option B is wrong because a policy announcement does not control the weather. Option C is unrelated; a customer’s age does not automatically reduce because of a policy announcement. Option D is wrong because machines are not bought automatically; management must decide, arrange finance, and complete procurement. Remember: policy signals are inputs for business planning, not automatic actions.

Related tags

Business-EnvironmentPolitical-EnvironmentClass-12Easy

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