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11th Class Business Studies Evolution And Fundamentals Of Business Question Bank Evolution and Fundamentals of Business (Short)

  • question_answer
    Explain political and legal causes of business risks.

    Answer:

    Ans.     The causes of business risk include:                                               
    (a) Changes in government policies regarding foreign trade                           
    (b) Entry of multinational companies
    (c) Changes in laws affecting the business like licensing, taxation, etc.
    (d) Changes in consumer laws and labour laws.
    For example, an increase in tax rates may reduce the profit margin of the business or an increase in minimum wages may increase labour cost for the business.


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