Question

Economic policies determine the —

• A. Volume of business
• B. Direction of business
• C. Both (A) and (B)
• D. None of these

Hint:

Economic policies influence both the size and type of industries that develop within a nation.

Answer 1

The Correct Option is C

Step 1: Understanding Economic Policies.
Economic policies are government strategies formulated to guide the functioning of the economy and the business environment.
These include fiscal policy, monetary policy, trade policy, and industrial policy.
Step 2: Role of Economic Policies in Business.
Economic policies directly influence both the volume (extent or scale of business activities) and the direction (nature and type of industries encouraged) of business operations.
For example, liberal trade policies increase business volume, while policies promoting green industries determine business direction.
Step 3: Analysis of options.
- (1) Volume of business: Correct — policies affect the scale of production and trade.
- (2) Direction of business: Correct — policies guide business priorities and sectors.
- (3) Both (A) and (B): Correct — covers both aspects accurately.
- (4) None of these: Incorrect.
Step 4: Conclusion.
Hence, Economic policies determine both the volume and direction of business.