Question

Which of the following is not an element of social environment?

• A. Composition of family
• B. Consumption habits
• C. Educational system and literacy rates
• D. Policies of taxation and investment

Hint:

Elements like values, habits, lifestyle = Social; monetary or fiscal policies = Economic. Always cross-match with real-world business implications.

Answer 1

The Correct Option is D

The correct answer is (D) Policies of taxation and investment, which is not an element of the Social Environment. Instead, it belongs to the Economic Environment. The social environment includes customs, traditions, values, social trends, and literacy levels, all of which shape consumer preferences and business strategies.
Explanation:

• Social Environment: Deals with social customs, habits, values, beliefs, population demographics, and lifestyle.
• Economic Environment: Includes fiscal policies, tax structure, interest rates, inflation, and investment norms.
• Tax policies influence savings, investment, and income distribution—not directly linked with societal customs or lifestyle.

Why others are correct elements of Social Environment:

• (A) Composition of family: Joint vs. nuclear families affect product demand and marketing strategy.
• (B) Consumption habits: Changes in diet, fashion, or gadgets directly affect consumer markets.
• (C) Literacy rates: Affects demand for educational, tech, and banking services.

Final Answer: (D) Policies of taxation and investment