Answer question based on following case study.
Mr. Rajan wants to start a new business. Before starting new business he made an analysis and found various external and uncontrollable forces which affect individual enterprise directly and indirectly. Because these forces keep on changing, it is difficult to predict future happenings. Some examples of these forces are growth rate of GDP, consumption habits, expansion of communication facilities etc.
'Expansion of Communication Facilities' is a component of:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Economic Environment
Option (1) Economic Environment — Correct. The economic environment includes all the economic forces that affect business, such as income, savings, imports and exports, production trends and money supply. Expansion of transportation and communication facilities is one of its components, so the passage’s phrase fits here. Roads, transport and telephone networks are part of the country’s infrastructure (basic facilities), and they help trade grow.
Option (2) Technological Environment — Incorrect. This option looks tempting, because communication uses technology. But the technological environment means new inventions and new methods of making goods. The spread of communication facilities across the country is a part of the economic environment.
Option (3) Social Environment — Incorrect. The social environment covers customs, values, lifestyles and population trends, not facilities like transport and communication.
Option (4) Legal Environment — Incorrect. The legal environment means laws and court decisions.
NCERT (2026-27 Edition):
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