CMA Foundation · Fundamentals of Business Economics and Management · Economic and Business Environment
A packaged food company in India reviews the following developments: (i) a fall in household savings rate, (ii) a ban by the food regulator on a preservative it uses, (iii) a growing share of working women increasing demand for ready-to-eat meals, (iv) a new automated packing technology. Which of these is correctly matched with its environment component?
The correct matching is savings rate as economic, regulator's ban as political-legal, working women driving ready-meal demand as socio-cultural, and automated packing as technological. Each development originates from the nature of its source: financial variables, law, social change and technology respectively.
- A(i) Economic, (ii) Political-legal, (iii) Socio-cultural, (iv) TechnologicalCorrect
- B(i) Socio-cultural, (ii) Political-legal, (iii) Economic, (iv) Technological
- C(i) Economic, (ii) Technological, (iii) Socio-cultural, (iv) Political-legal
- D(i) Demographic, (ii) Economic, (iii) Natural, (iv) Technological
Explanation
Savings rate is an economic variable. A regulator's ban is a legal or regulatory action, hence political-legal. Changing roles of women altering consumption is a socio-cultural trend. Automated packing is technological. The second option swaps economic and socio-cultural for (i) and (iii), and the others misplace the ban or the technology.
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