Target Exam

CUET

Subject

Business Studies

Chapter

Business Environment

Question:

Which of the following can create fear in the minds of investors to invest in long-term projects?

Options:

Privatisation

Political Uncertainty

Liberalisation

None of the above

Correct Answer:

Political Uncertainty

Explanation:

The political environment includes political conditions such as general stability and peace in the country 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.