The correct answer is option 1- A-II, B-IV, C-I, D-III.
List I
(Business environment) |
List II
(Dimension) |
| (A) Economic |
(II) Construction companies prefer low longer-term interest rates |
| (B) Social |
(IV) Rise in demand for goods during festivals |
| (C) Legal |
(I) KYC compliance is mandatory in mutual funds investment |
| (D) Political |
(III) The government maintains general stability and peace in the country |
(A) Economic- (II) Construction companies prefer low longer-term interest rates.
The economic environment includes factors like inflation, interest rates, economic growth, and employment. Low longer-term interest rates make borrowing cheaper for companies. Construction companies often take large loans for long-term projects. So, they prefer low interest rates to reduce financing costs and increase profitability.
(B) Social- (IV) Rise in demand for goods during festivals.
The social environment refers to societal norms, values, beliefs, customs, and traditions. During festivals, people tend to spend more on gifts, clothes, sweets, and other products. This reflects social behavior. Businesses respond to these trends by increasing production or offering discounts.
(C) Legal- (I) KYC compliance is mandatory in mutual funds investment.
The legal environment includes laws, regulations, and legal frameworks businesses must follow. KYC (Know Your Customer) norms are a legal requirement for financial services. Mutual fund companies must verify the identity of investors to comply with anti-money laundering laws. This is an example of how legal rules impact business operations.
(D) Political- (III) The government maintains general stability and peace in the country.
The political environment involves the stability of the government, its policies, and its attitude toward businesses. A stable political system ensures peace, law, and order, which are essential for business confidence. If the government maintains stability, it encourages both domestic and foreign investment. |
