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BBA Business Environment June 2014 Solved Question Paper With Answers

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BBA Business Environment June 2014 Solved Question Paper With Answers

B.B.A. Examination June 2014 (BBA Mock Test Questions Papers)

Business Environment



Time Three Hours] [Maximum Marks: 75 Sect ion-A

(Very Short Answer Questions)

Note: Attempt all the five questions. Each question carries 3 marks. Very short answer is
required not exceeding 75 words. (3 x 5 = 15)

1. What is meant by capitalism?

Ans. Meaning and Definition of Capitalism: In a capitalist economy, households and firms are
the basic production units. The capitalist system is also known as free enterprise economy and market economy. It is characterized by the private ownership of the means of production, individual decision-making and the use of the market mechanism to carry out the decision of individual participants and facilitate the flow of goods and services in markets.”

2. (What is meant by free trade policy?

Ans. Free trade is a policy in international markets in which governments do not restrict imports or exports. Free trade is exemplified by the European Union/European Economic ea and the North American Free Trade Agreement, which have established open markets. Most nations are today members of the World Trade Organization (WTOJ multilateral trade agreements. However, most governme5 still impose some protectionist Policies that are intended to support local employment, such as applying tariffs to imports or subsidies to exports. Governments may also restrict free trade to limit exports of natural resources. Other barriers that may hinder trade include import quotas, taxes and non-tariff barriers, such as regulatory legislation.

3. Write three advantages of foreign trade.

Ans. The three advantages of foreign trade areas follows:

(a) Geographical Specialjsatj : Geographical speciaS helps to improve the productivfty and quality of goods and services. It also leads to lower cost of production

(b) Optimum use of Resources: Foreign trade helps each country to make optimum use of its national resources. Each country can concentrate on production of those goods for which its resotirces are best suited. It can exchange its surplus for those goods which it is not suited to I*oduce. In this way wastage of resources is avoided.

(c) Economic Development. With the help of advanced technology and capital goods from
abroad an underdeveloped countrycan use its natural resources and increase rate of growth. A
country can earn valuable foreign exchange through exports. Foreign trade also increases income of
government in the form of customs duty.

4. Why concept of privatisation has gaining importance?

Ans. The concept of privatisation has gained importance due to following reasons:

(a) Improved Efficiency: The main argument for privatisation is that private companies have a profit incentive to cut costs and be more efficient. A private firm is interested in making profit and so it is more likely to cut costs and be efficient. Since privatisation, companies such as BT and British Airways have shown degrees of improved efficiency and higher profitability.

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