 Which of the following is not a component of the business environment Organizational

environment?
 1. Economic environment
 2. Technological environment
 3. Social environment
 4. Organizational environment
 Which of the following is a feature of the economic environment?
 1. Social trends
 2. Technological advancements
 3. Fiscal and monetary policies
 4. Natural resources
 Which of the following is a key factor in the social environment?
 1. Government regulations
 2. Interest rates
 3. Population demographics
 4. Foreign trade policies
 Which of the following is a characteristic of the technological environment?
 1. Economic conditions
 2. Political stability
 3. Scientific advancements
 4. Cultural factors
 Which of the following is a way in which businesses can respond to changes in the business
environment?
 1. Ignore changes and continue with business as usual
 2. Resist changes and maintain current practices
 3. Withdraw from the market entirely
 4. Adapt to changes and modify business strategies
 Which of the following is not a characteristic of the global business environment?
 1. Varied economic conditions
 2. Diverse cultural practices
 3. Different legal systems
 4. Uniform market conditions
 What is the purpose of analyzing the business environment?
 1. To predict the future with certainty
 2. To identify opportunities and threats
 3. To control all external factors
 4. To eliminate competition
 Identify the role of political factors in the business environment
 1. Do not affect business operations
 2. Create opportunities for business growth
 3. Pose a threat to business stability
 4. Only affect large corporations
 Components of the internal business environment are
 1) Management structure
 2) Employees
 3) Suppliers
 4) Company culture
 1. Only 1
 2. 1 and 3
 3. 1, 2 and 3
 4. 1, 2 and 4
 Identify the factors that are included in the calculation of national income.
 1) Wages earned by a government employee
 2) Interest earned on a savings account
 3) Dividends earned from a stock investment
 4) Rent earned by a landlord

 1. 1 and 2
 2. 1, 2 and 3
 3. 1, 2 and 4
 4. 1, 3 and 4
 1. Critically examine the economic environment of business
 2. Discuss different methods of measuring national income.
 What is the difference between autonomous expenditure and induced expenditure?
 1. Autonomous expenditure is independent of income, while induced expenditure
depends on income.
 2. Autonomous expenditure is determined by income, while induced expenditure is not.
 3. Autonomous expenditure is government spending, while induced expenditure is
consumer spending.
 4. None of these
 Consider the following statements:
 1) The decrease in national income resulting from a decrease in government spending
 2) The increase in national income resulting from an increase in government spending
 3) The total increase in spending resulting from an initial increase in spending
 1. Only 1
 2. Only 3
 3. 1 and 3
 4. 2 and 3
 What is the formula for the multiplier effect?
 1. 1 / (1 - MPC)
 2. 1 / MPC
 3. 1 / (1 + MPS)
 4. None of the above
 If the MPC is 0.75, what is the multiplier?
 1. 2
 2. 3
 3. 4
 4. 5
 What is the relationship between the size of the multiplier and the size of the MPC?
 1. The larger the MPC, the smaller the multiplier
 2. The larger the MPC, the larger the multiplier
 3. The MPC has no effect on the size of the multiplier
 4. None of the above
 What is an inflationary gap?
 1. a situation where aggregate demand is greater than aggregate supply at the full
employment level of output
 2. a situation where aggregate demand is less than aggregate supply at the full
employment level of output
 3. a situation where there is no inflation in the economy
 4. None of these
 In the long run increased in saving and decrease in investments called
 1. Inflation
 2. Deflation
 3. Secular inflation
 4. Secular deflation
 Investment means the purchase of
 1. Old machines, old buildings, and other capital goods
 2. New machines, new buildings, and other capital goods that add to the existing capital
stocks.
 3. A and B
 4. Neither A nor B
 With an increase in investment, MEC
 1. Increases
 2. Decreases
 3. Constant
 4. All the above
 If income level increases then APS
 1. Increases
 2. Decreases
 3. Constant
 4. All the above
 Explain the national income equilibrium with the help of suitable diagram. List out the two
major conditions when national income equilibrium does not prevail in the economy.
 What do you understand by the inflationary gap in the economy? List out the responsible
factors that lead to an inflationary gap in the economy.
 Identify the characteristic of the expansion phase of the business cycle.
 1. Rising unemployment
 2. Falling output
 3. Increased consumer spending
 4. Declining stock prices
 Identify the policies that governments can use to address the effects of the business cycle
 1) Increasing taxes during a recession
 2) Implementing expansionary monetary policy during a contraction
 1. Only 1
 2. Only 2
 3. Both 1 and 2
 4. Neither 1 nor 2
 Consider the following statements;
 1) During the recession, GDP will decrease
 2) During the recession GDP is unpredictable
 3) During the recession, the government can use decreasing tax policy to stabilize the economy
 4) During the recession, the government can use decreasing government spending policy to
stabilize the economy
 1. 1 and 3
 2. 1 and 4
 3. 2 and 3
 4. 2 and 4
 Identify the possible cause and effect of a recession.
 1. A sudden increase in government spending: An increase in available jobs
 2. A sudden increase in consumer confidence: No change in available jobs
 3. A sudden decrease in interest rates: An increase in wages
 4. A sudden decrease in business investment: A decrease in available jobs
 Consider the following statements;
 1) Demand-pull inflation occurs when demand for goods and services exceeds supply, leading
to an increase in prices
 2) Supply for goods and services exceeds demand, leading to a decrease in prices
 3 ) Government increases taxes, leading to a decrease in demand and a decrease in prices
 1. Only 1
 2. 1 and 2
 3. 1 and 3
 4. 1, 2 and 3
 Inflation is caused by too much money chasing after too few goods.” Who made this
statement?
 1. Crowther
 2. Keynes
 3. Milton Friedman
 4. Schumpeter
 Identify the role of the central bank in managing inflation.
 1. To increase inflation by increasing the money supply
 2. To decrease inflation by decreasing the money supply
 3. To maintain a stable rate of inflation by adjusting the money supply
 4. To ignore inflation and focus on other economic issues
 Identify the possible effect of inflation
 1. An increase in the purchasing power of money
 2. A decrease in the value of money
 3. An increase in real income
 4. A decrease in the price of goods and services
 Which of the following is not a type of unemployment?
 1. Cyclical unemployment
 2. Seasonal unemployment
 3. Supply-side unemployment
 4. Frictional unemployment
 Which of the following is an example of structural unemployment?
 1. A person who loses their job due to a recession
 2. A person who is fired from their job due to poor performance
 3. A person who is no longer needed in their job because of technological advancements
 4. A person who quits their job to search for a better one
 Inflation is an increase in the general price level of goods and services in an economy.
 Inflation leads to decline of purchasing power over time
 Inflation leads to decline of real-income
 Discuss the different stages of the business cycle with diagram.
 Analyze demand-pull inflation and cost-push inflation.