"The attitudes of government officials towards business may have either positive or negative impact upon business." Identify the dimension of business environment referred here:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Political
Option (1) Political — Correct. The political environment covers political conditions such as stability and peace in the country, and the attitudes of the government and its officials towards business. A helpful official can speed up a business; an unfriendly one can hold it back.
Option (2) Economic — Incorrect. The economic environment covers interest rates, inflation, income of people and similar economic factors.
Option (3) Legal — Incorrect. The legal environment covers the laws passed by the government, administrative orders and court judgments. It is about the rules themselves, not the attitude of officials.
Option (4) Social — Incorrect. The social environment covers customs, traditions, values and lifestyles of the people.
NCERT (2026-27 Edition): “(iv) Political Environment: Political environment includes political conditions such as general stability and peace in the coun-try and specific attitudes that elected government representatives hold towards business. The significance of political conditions in business success lies in the predictability of business activities under stable political conditions. On the other hand, there may be uncertainty of business activities due to political unrest and threats to law and order. Political stability, thus, builds up confidence among business people to invest in the long term projects for the growth of the economy. Political instability can shake that confidence. Similarly, the attitudes of government officials towards business may have either positive or negative impact upon business.” |
Note: The same/similar question has been asked in different years by NTA as per the details given below:
| 2026 | 2025 | 2024 | 2023 | 2022 |
| 31-05 S1 | – | 19-07 S1 | – | – |