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Business Environment-1B

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SKU: AMSEQ-020 Category:

Assignment – A

Q1. Discuss the nature and dynamism of business environment. What factors trigger changes in the business environment?

Q2. Elaborate upon the major components of internal environment of a business firm?

Q3. Explain the main objectives as incorporated in various five-year plans of India.

Q4. ‘Social responsibility is a luxury which a few business organizations can afford’. Do you agree or disagree? Give arguments in support of your answer.

Q5. Write short answers to any three of the following:-
1.a) Factors effecting technological environment of business
2.b) Economic Liberalization
3.c) Horizontal and vertical integration
4.d) Special Economic Zones (SEZs)
5.e) TRIPS & TRIMS

Q6. How technological change effects business? Discuss with suitable examples.

Q7. Explain the regulatory role of the government in an economy. Is government intervention in the economy desirable?

Q8. Explain the role and functions of WTO and discuss its importance in promoting international trade.

Case Study

ABC Ltd. is an Ahmedabad based soaps and detergent company. It has a broad product portfolio, with salt and soda ash to soaps and detergent manufacturing and marketing. The company was established in 1975 and its early operations were small. It adopted a strategy of low pricing and low margins to beat Multinational giants in the same sector. It benefited by operating in small scale sector and thus saved enormously on excise duty that multinationals had to pay for every kilogram of soap/ detergent they produced. It also concentrated on widening its distribution network. Initially, sales pushed mainly through word of mouth and latter on as the products became popular, sales agents/distributors across the country associated with the company and operated on the tiny margins offered by the company, owing to volumes.

The company intelligently uses television as a medium to promote its brands and push sales. In 2007-08, the company’s net sales grew to Rs 3206 crores, 13.5% higher than 2006-07. Its net profit during the same period was Rs. 446 crores, up by 18% from 2006-07. The debt servicing burden was also decreased by 21% to about 36 crore during 2007-08. The company saves much on its various expenditure heads like staff cost, power and fuel through better operational efficiency and re-engineering. It has already created a brand associated with cheap products. The company also faces intense competition from hundreds of small scale soap makers. Currently, in 2009-10 the company employs a workforce of 14000 and a turnover of around Rs. 3600 crores. Over the years the company has increased its sales volumes through better product mix, focus on R&D, and proper advertising. As a part of its ‘Corporate Social Responsibility’ ABC Ltd. has ventured into secondary and higher education and runs educational institutions with a determination to serve the society and create a goodwill. Quality education and vocational training is imparted to the needy free of cost. It has also set up old age homes in the state of Gujarat.

1 – Read the profile of ABC Ltd and carry out SWOT analysis for presenting before the board if it is feasible to expand the operations.

Assignment – C

Q1: Banking sector will fall under which of the following sectors?
1.Agricultural sector
2.Service sector
3.Manufacturing sector
4.Industrial sector

Q2: In which production India has attained self-sufficiency?
1.Fertilizers
2.Edible oil
3.Petroleum
4.Foodgrains

Q3: The main watchdog of international trade is –
1.IMF
2.World Bank
3.WTO
4.UNCTAD

Q4: Find the odd one out-Options
1.IOCL
2.HPCL
3.ONGC Ltd.
4.ESSAR OIL

Q5: National Income estimates in India is prepared by
1.Planning Commission
2.RBI
3.Finance Ministry
4.S.O

Q6: Who is the Chairman of NDC?
1.Finance Minister
2.Prime Minister
3.Lok Sabha Speaker
4.Minister of Planning

Q7: The Plan Holiday refers to the period-Options
1.1965-68
2.1966-69
3.1967-70
4.1978-80

Q8: Which of the following regulates the working of stock markets in India?
1.FEMA
2.RBI
3.SEBI
4.Ministry of Finance

Q9: The New Economic Policy launched in 1991 consist of-

(i) Stabilization policy

(ii) Import control policy

(iii) Deficit financing

(iv) Structural adjustment policy Options
1.only

i, iii. and iv.
1.and iv.
2.and iv

Q10: Closed economy’ is one in which-
1.Only export takes place
2.Neither exports nor imports take place
3.Money supply is fully controlled
4.Exchange rates are under a full control of the government

Q11: Mixed economy means-Options
1.Co-existence of small and large industries
2.Promoting both agriculture and industries in the economy
3.Co-existence rich and poor
4.Co-existence of public and private sectors

Q12: The largest share in India’s national income is from-
1.Service sector
2.Agriculture sector
3.Manufacturing sector
4.Trade sector

Q13: VAT is imposed-
1.Directly on consumer
2.On final stage of production
3.On first stage of production
4.On all stages of production up to the final sale

Q14: Which of the following countries per capita income is the highest?
1.India
2.Bangladesh
3.Thailand
4.Pakistan

Q15: India is not a member of-
1.G-15
2.ASEAN
3.UNO
4.ILO

Q16: Black money in India
1.Raises domestic prices
2.Encourages lavish consumption
3.Causes loss of revenue to the exchequer
4.Effects all of the above

Q17: Stagflation means
1.Inflation with recession
2.Recession and stagnation
3.Inflation galloping like a stag
4.Inflation and increasing output

Q18: The President of India is elected by-
1.Parliament (i.e. both the Lok Sabha and the Rajya Sabha]
2.By an Electoral College comprising of the elected members of the Lok Sabha, the Rajya Sabha and the State Legislatures.
3.Together by the Central and the State governments
4.By the people directly

Q19: Which of the following is not a fundamental right enshrined in the Indian Constitution?
1.Right to freedom of religion
2.Right to equality
3.Right to equal pay for equal work for men as well as women
4.Right to freedom of thought and expression

Q20: India has-
1.Parliamentary form of government
2.Presidential form of government
3.Both parliamentary and presidential form of government
4.None of these

Q21: Income tax is an item of-
1.Concurrent List
2.State list
3.Union List
4.Residuary List

Q22: The objective of case-study is-
1.Remedial
2.Diagnostic
3.Educational
4.All of the above

Q23: Inflation, in theory occurs-
1.When prices of essential commodities outstrip income
2.When money supply grows at a higher rate than GDP in real terms
3.When exchange rate of domestic currency falls in foreign exchange markets
4.When fiscal deficit exceeds balance of payments deficit.

Q24: Among the supply side measures to control inflation is-
1.Curtailing public expenditure
2.Mopping up excess liquidity through taxation
3.Credit control measures of RBI
4.Maintaining price levels through ‘administered price mechanism’ and ‘effective PDS’

Q25: ‘Level playing field’ argument of industries requires-
1.MNCs to be stopped from investing in India
2.Licence to MNCs be given only in environment-friendly technologies
3.MNCs to be treated at par with the domestic industry
4.Domestic industry to be given preference over MNCs.

Q26: In a flexible exchange-rate system, an increase in the domestic interest rate would tend to-
1.Improve the current account and worsen the capital account
2.Improve the capital account and worsen the current account.
3.Improve both the current and the capital accounts.
4.Worsen both the accounts.

Q27: Which of the following items is not included in a country’s balance of payments?
1.Shipping services
2.Interest received from abroad
3.Import and export duties
4.Tourists’ expenditure

Q28: Which two of the following are the most likely effects of the imposition of a tariff on an imported good?

(a) The domestic price of the imported good will fall

(b) Overseas production of the good may be stimulated

(c) Overseas employment will rise

(d) The domestic price of the imported good will rise

(e) Gain of tax revenue by the government

[c] and [d]

[a] and [c]

[d] and [e]

[b] and [d]

Q29: Which two of the following are regarded as the main aims of the World Trade Organisation (WTO)?
1.a) To eliminate discrimination in world trade
2.b) To provide financial assistance to countries with debt
3.c) To reduce tariff barriers
4.d) To make ‘infant industry’ protection illegal
5.e) To help give preferences to smaller economies Options

[b) and (d]

[a] and (c]

[d) and (e]

[b) and (d]

Q30: Which of the following is the most integrated form of regional economic arrangement?
1.Customs union
2.Economic union
3.Free trade area
4.Multilateral trading area

Q31: Which two of the following arguments are most likely to be used to justify protectionism?
1.a) To protect high cost domestic industries
2.b) To protect strategically important industries
3.c) To protect industries which are still immature
4.d) To maximise government tax revenue
5.e) To protect environmental standards
6.d) and e]
7.a) and b]
8.c) and d]
9.b) and c]

Q32: A situation where any advantage given by one member of the WTO to another member must be extended to all WTO members.
1.The excessive invoicing principle
2.The intra-regional principle
3.The trade diversion principle
4.The most favoured nation principle

Q33: A situation where a country exports a product at a price below its cost of production.
1.Full cost pricing
2.New protectionism
3.Dumping
4.Price skimming

Q34: A protectionist measure whereby members of a regional trading bloc agree to impose an identical rate of protection on all goods imported from non-member countries.
1.Common quota arrangements
2.Technological standards control
3.Non-tariff agreement
4.VER agreements

Q35: An MNC (multinational company or corporation) can be denned as a firm which:
1.Is beyond the control of any government.
2.Is one of the largest 200 firms in the world?
3.Operates directly or owns subsidiaries in more than one country
4.All of the above

Q36: Coca Cola is a good example of a__________MNC (Multinational Corporation).
1.conglomerate
2.free-standing
3.vertically integrated
4.horizontally integrated

Q37: MNCs are in a good position to vary their strategies in different phases of the product life cycle. For instance in the.. phase(s) they will usually
1.decline, maintain high prices
2.launch, move production to low-cost countries
3.growth and maturity, move production to low-cost countries
4.growth, maintain high prices

Q38: Which of the following is NOT likely to be a benefit that host countries will obtain from MNCs? Options
1.Technology transfer
2.Import substitution
3.The ability to impose high tax rates on them
4.Job creation

Q39: When MNCs reduce their tax bill in different host countries this is usually done by a technique called:
1.Technology transfer.
2.Transfer pricing.
3.Import substitution.
4.Product switching.

Q40: Which of the following can be a disadvantage to the host country of MNC investment:
1.Drives out domestic competitors
2.Sends profits abroad
3.Threatens to leave if not “helped”.
4.Imports components

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