CBSE 2025, BS Set 1

Question

Seeing the increasing demand for automobiles in Buleti, 'Veso Cars', a global car manufacturing company planned to expand its operations and sell its cars there. However, the government of Buleti imposed high import duties on foreign made cars to protect local manufacturers from foreign competition. This attitude of the Buleti government towards foreign car manufacturers increased the cost of importing cars, making it less affordable for 'Veso Cars' to sell its cars at competitive prices in Buleti.

The component of business environment highlighted above is: A). Political environment B). Social environment C). Legal environment D). Economic environment

Edvaya · Accepted Answer

The correct answer is Political environment. The **Political Environment** encompasses the attitude, actions, and policies of the elected government and political parties towards businesses — both domestic and foreign. The imposition of high **import duties** specifically to protect local manufacturers from foreign competition is a classic example of a **protectionist government policy**, which directly reflects the **political environment** of Buleti. - **Legal environment** relates to laws and regulations already enacted. - **Economic environment** relates to economic conditions like inflation, interest rates, and GDP. - **Social environment** relates to society's customs, values, and demographics.

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Business Studies > Principles And Functions Of Management > Business Environment

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