21. Explain the significance of the business environment.

The business environment helps companies understand the economic , political, and social
conditions in which the y work.
It allows businesses to plan properl y by knowing about upcoming opportunities and threats.
Understanding the environment helps in making better decisions and achieving growth.

22. Discuss the factors affecting the business environment.

y
Economic factors like inflation, interest rates, and GDP affect bu ing and selling.

x
Political and legal factors such as government policies, ta es, and laws shape business rules.

y
Social and cultural factors like population, lifest le, and education influence demand for products.

23. What are the key components of the business environment?

1. Economic Environment – Includes income levels, inflation, and trade policies.

2. Political -Legal Environment – Includes government policies, rules, and stability.

3. Socio -Cultural Environment – Includes traditions, values, and demographics.
4. Technological Environment – y.
Covers new inventions and use of technolog

5. Natural Environment – Includes climate, natural resources, and sustainability.

24. Explain the importance of social responsibility for businesses.

Social responsibilit y means that businesses should care for society and the environment, not just
profits.

It helps in building a positive image and trust among customers and the public.

Responsible businesses get long -term benefits like loyalty, support, and fewer legal problems.

25. Differentiate between capitalism and socialism.

Capitalism Socialism

Private individuals own businesses.Government owns major industries.

Profit is the main motive. Welfare of all is the goal.

There is competition. Focus is on equalit y and planning.

26. What are the key characteristics of communism?
No private propert y – All land and businesses are owned by the government.
Equal distribution of wealth – Everyone gets the same basic needs.

Centralized planning – The government decides what to produce and how much.

27. Explain the concept of a mixed economy.

x
A mi ed econom y combines the benefits of capitalism (private ownership) and socialism
(government ownership).

Both private companies and the government run industries.

It helps in economic development while ensuring social welfare.

28. How does the public sector contribute to economic growth?

The public sector builds basic infrastructure like roads, electricit y, and railways.
y
It creates emplo ment and supports industries that are not profitable for private pla ers. y
It develops backward regions b y setting up industries and providing services.

29. Write a short note on industrial policy in India.

y is a government plan to promote industrial development.
Industrial polic

The 1991 policy focused on liberalization, privatization, and globalization (LPG).

It encouraged private investment, reduced government control, and promoted e ports. x

30. How has liberalization impacted the Indian economy?

z
Liberali ation allowed foreign companies to invest in India.

It improved competition , quality, and choice for consumers.

Man y sectors like telecom, IT, and banking grew rapidly and created jobs.

31. What are the advantages of privatization?

Better efficienc y: Private companies work for profit, so they manage resources better than
government firms.

Improved qualit y: Due to competition, privatized companies try to improve services and products.
 z
Less government burden: Privati ation reduces the financial and administrative load on the

government.

32. Explain the role of globalization in business growth.

x
Access to global markets: Companies can sell goods worldwide and e pand easil y.
z
Foreign investments: Globali ation brings more foreign capital and technolog y.
Improved qualit y: Businesses improve their standards to compete globally.

33. Discuss the importance of government intervention in business

regulation.

Protects public interest: Government makes laws to ensure safet y, quality, and fairness.
Controls monopol y: It stops a single company from controlling the whole market.
Promotes balanced growth: It helps small businesses and supports backward areas.

34. What are the key objectives of monetary policy?

Control inflation: It manages the mone y supply and interest rates.
y: Stable prices help in economic planning and growth.
Ensure price stabilit

Support economic growth: By adjusting rates, RBI helps industries get cheaper loans.

35. How does fiscal policy influence economic growth?

Government spending on roads, education, etc., boosts demand and jobs.

Tax policies affect how much money people and businesses spend.
Reduces inequality by taxing the rich more and giving benefits to the poor.

36. Discuss the key elements of EXIM policy.

x
Promotes e ports b y giving subsidies and reducing export duties.
Controls imports to protect domestic industries.

Encourages foreign trade to earn foreign currenc y and grow the economy.

37. What are the major functions of FEMA? (Foreign Exchange

Management Act)
 x x
Regulates foreign e change transactions like import-e port pa ments. y
Controls foreign investments in India.

Ensures smooth flow of foreign mone y into and out of the country.

38. Explain the trends in the international business environment.

z
Increased globali ation: More cross-border trade and investment.

Use of technology: Digital tools like e-commerce and AI are growing.

Focus on sustainability: Businesses now care more about the environment.

39. What are the major challenges in world trade today?

Trade wars and tariffs between countries hurt free trade.

Political instabilit y in some countries affects trade relations.

High transportation costs and rules make trade difficult.

40. Discuss the objectives of WTO in global trade.

Promote free and fair trade among countries.

Solve trade disputes peacefull y through proper systems.

Create equal rules so small countries can compete with big ones.

41. How does WTO help in resolving trade disputes?

y
Provides a legal s stem: WTO has a proper procedure to solve trade disagreements.

x
Ensures fair treatment: Both countries get a chance to e plain their side.

Avoids trade wars: B y solving disputes peacefully, WTO maintains global trade balance.

42. Explain the growing role of e-commerce in world trade.

Online selling across borders: E-commerce lets small and big businesses sell products globall y.
y
Saves cost and time: Bu ing and selling online is faster and cheaper than traditional methods.

Helps small businesses: Even small sellers can reach international customers through platforms.

43. How have platforms like Flipkart and Amazon changed the retail
sector?

y
Shift to online shopping: More people prefer bu ing goods online due to convenience.
 More choices and better prices: These platforms offer man y options and discounts.
Support to small sellers: Local shops can also sell online through these platforms.

44. How does WTO impact Indian businesses?

x
More e port opportunities: Indian businesses can sell goods in global markets easil y.
Increased competition: Indian firms have to improve qualit y to compete with foreign companies.
Polic y changes: India has to follow WTO rules, which affect trade laws and tariffs.

45. Explain the importance of skill development in economic growth.

y
Increases emplo abilit y: Skilled people get better jobs and salaries.
Improves productivit y: Skilled workers work faster and better.
Boosts entrepreneurship: Trained people can start their own businesses.

46. Discuss the significance of "Make in India" in economic

development.

Promotes manufacturing: It encourages companies to make products in India.

Creates jobs: New factories and industries create emplo ment. y

Attracts investment: Foreign and Indian companies invest more in the countr y.

47. What role does the private sector play in job creation?
y
Provides large emplo ment: Private companies like IT, banking, and retail hire millions.

Encourages startups: Man y small private firms create jobs locally.

Improves skill development: The private sector trains workers for better performance.

48. How does the public sector contribute to infrastructure

development?

y
Builds basic facilities: The public sector constructs roads, railwa s, airports, power plants, etc.

Supports industrial growth: Infrastructure built b y the government helps private companies operate
smoothl y.
Promotes regional development: Public projects bring development to rural and backward areas

too.
49. Explain how international trade impacts local businesses.
Increases competition: Local businesses must improve qualit y and reduce prices.
Access to foreign markets: Local producers can sell their goods to other countries.

Technolog y exchange: Foreign trade brings better machines, tools, and ideas to local businesses.

50. Discuss the major economic reforms in India post-1991.

z
Liberali ation: Removed man y rules and allowed private companies to grow.
Privatization: Government sold stakes in public companies to improve efficiency.

Globalization: Opened the Indian economy to world trade and foreign investment.