Strengthen Your Reasoning with Assertion–Reason MCQs – Chapter 3: Business Environment

Can you logically connect how different environmental factors influence business decisions?
Put your understanding to the test with this Assertion–Reason Based Mock Test on “Business Environment”, crafted for Class 12 Business Studies students as per the latest CBSE syllabus (2025–26).

This test is designed to challenge your analytical thinking by linking concepts, causes, and effects related to the dimensions of business environment — economic, social, political, legal, and technological — along with the impact of government policy changes like LPG reforms.

Why Attempt This Mock Test?
Focused exclusively on Assertion–Reason type questions
Develops conceptual clarity and critical reasoning skills
Covers all NCERT-based and board-relevant concepts
Helps connect theory with practical business situations
Ideal for board exam preparation and quick revision

Reason out, analyze better, and think like a true business leader!
Attempt the Chapter 3: Business Environment – Assertion–Reason Mock Test today and make your Class 12 BST preparation stronger than ever.

1. Assertion (A): Understanding and analysis of environment helps the business in planning and policy formulation.

Reason (R): Environment is a source of both opportunities and threats for a business enterprise.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Assertion (A) is true but Reason (R) is false

Assertion (A) is false but Reason (R) is true

2. Assertion (A): Early identification of opportunities helps the enterprise in getting first mover advantage.

Reason (R): Environmental awareness helps managers to identify threats on time.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Assertion (A) is true but Reason (R) is false

Assertion (A) is false but Reason (R) is true

Assertion (A): Economic environment includes the social forces like customs and traditions.

Reason (R): Reserve Bank of India is the key regulator of county’s economic environment.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Assertion (A) is true but Reason (R) is false

Assertion (A) is false but Reason (R) is true

Assertion (A): Increase in technology will benefit in expansion of business.

Reason (R): Social environment for business provides freedom of choice to consumer.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Assertion (A) is true but Reason (R) is false

Assertion (A) is false but Reason (R) is true

5. Assertion (A): Business environment does not affect much the decision-making of the companies.

Reason (R): Business environment is related to all external forces outside the organisation.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Assertion (A) is true but Reason (R) is false

Assertion (A) is false but Reason (R) is true

6. Assertion (A): Business environment is a complex phenomenon.

Reason (R): Business environment consists of various inter-related and dynamic forces.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Assertion (A) is true but Reason (R) is false

Assertion (A) is false but Reason (R) is true

7. Assertion (A): Bangalore is called the silicon valley of India.

Reason (R): The favourable economic conditions of the country encouraged the IT industry.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Assertion (A) is true but Reason (R) is false

Assertion (A) is false but Reason (R) is true

Assertion (A): Bangalore is called the silicon valley of India.

Reason (R): The favourable economic conditions of the country encouraged the IT industry.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Both Assertion (A) and Reason (R) are true but Reason (R) is not the correct explanation of Assertion (A)

Assertion (A) is true but Reason (R) is false

Assertion (A) is false but Reason (R) is true

Assertion (A): Business environment is a complex phenomenon.

Reason (R): Business environment consists of various inter-related and dynamic forces.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Assertion (A) is true but Reason (R) is false

Assertion (A) is false but Reason (R) is true

10. Assertion (A): Business Environment is aggregative in nature.
Reason (R): Business environment is the sum total of all things which are external to business.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Assertion (A) is true but Reason (R) is false

Assertion (A) is false but Reason (R) is true

11.

Assertion (A): Political factors play a major role in shaping the environment, in which business firms operate.

Reason (R): Political instability builds up confidence among the business people to invest in the long-term projects.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Assertion (A) is true but Reason (R) is false

Assertion (A) is false but Reason (R) is true

12. Assertion (A): Business Environment is a relative concept.

Reason (R): Business environment is uncertain as it is difficult to predict future happenings.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Assertion (A) is true but Reason (R) is false

Assertion (A) is false but Reason (R) is true

13. Assertion (A): Demonetisation has lead to rise in income tax collection.

Reason (R): This is due to increased disclosure of declared income by the people.

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Assertion (A) is true but Reason (R) is false

Assertion (A) is false but Reason (R) is true

Question 1 of 13