Q.1 Which of the following is a primary role of entrepreneurship in economic development?
Increasing unemployment
Generating wealth
Reducing production
Limiting innovation
Explanation - Entrepreneurs create businesses that generate income, produce goods/services, and thus increase wealth in the economy.
Correct answer is: Generating wealth
Q.2 Entrepreneurship contributes to economic development by:
Discouraging foreign investment
Creating employment opportunities
Reducing taxes
Increasing import dependency
Explanation - New businesses started by entrepreneurs employ people, reducing unemployment and enhancing the economy.
Correct answer is: Creating employment opportunities
Q.3 How does entrepreneurship promote innovation?
By copying existing products
By developing new products and processes
By reducing competition
By increasing bureaucracy
Explanation - Entrepreneurs introduce innovative ideas, products, and services, which drives technological and economic progress.
Correct answer is: By developing new products and processes
Q.4 Which of the following shows entrepreneurship's role in regional development?
Only urban growth
Development of rural industries
Limiting local businesses
Increasing imports
Explanation - Entrepreneurs can set up industries in rural areas, providing jobs and reducing regional imbalances.
Correct answer is: Development of rural industries
Q.5 Entrepreneurs help in capital formation by:
Spending savings on luxury goods
Investing in productive ventures
Avoiding investments
Relying only on government funds
Explanation - Entrepreneurs invest savings in productive businesses, increasing the stock of capital in the economy.
Correct answer is: Investing in productive ventures
Q.6 Which of the following is a social benefit of entrepreneurship?
Widening income inequality
Promoting skill development
Reducing education opportunities
Increasing social conflicts
Explanation - Entrepreneurship creates opportunities for skill development and self-employment, improving social welfare.
Correct answer is: Promoting skill development
Q.7 Entrepreneurship increases national income by:
Reducing production
Enhancing industrial and service output
Limiting trade
Discouraging investments
Explanation - Entrepreneurs increase production of goods and services, thereby raising the GDP and national income.
Correct answer is: Enhancing industrial and service output
Q.8 Which sector benefits the most from entrepreneurial activity?
Public sector only
Private sector only
Both private and public sectors
Foreign sector only
Explanation - Entrepreneurship stimulates overall economic activity, benefiting both private and public sectors.
Correct answer is: Both private and public sectors
Q.9 Entrepreneurs contribute to export growth by:
Producing goods only for local use
Manufacturing competitive products for foreign markets
Restricting international trade
Reducing product quality
Explanation - Entrepreneurs produce quality goods for export, earning foreign exchange and promoting economic growth.
Correct answer is: Manufacturing competitive products for foreign markets
Q.10 Entrepreneurship promotes balanced regional development by:
Focusing only on metro cities
Setting up industries in backward regions
Increasing rural-urban migration
Ignoring local resources
Explanation - By establishing businesses in underdeveloped areas, entrepreneurs reduce regional disparities.
Correct answer is: Setting up industries in backward regions
Q.11 Which of the following is an economic function of entrepreneurs?
Conserving traditional methods
Resource mobilization for production
Reducing employment opportunities
Promoting unemployment
Explanation - Entrepreneurs gather and organize resources like land, labor, and capital to produce goods and services.
Correct answer is: Resource mobilization for production
Q.12 Entrepreneurship reduces dependence on foreign goods by:
Promoting imports
Encouraging domestic production
Discouraging local businesses
Focusing only on services
Explanation - Entrepreneurs produce goods locally, reducing the need for imports and strengthening the economy.
Correct answer is: Encouraging domestic production
Q.13 Which of the following indicates entrepreneurship’s role in poverty reduction?
Generating employment opportunities
Increasing taxes on the poor
Restricting rural industries
Promoting corruption
Explanation - Entrepreneurs create jobs and income opportunities, helping to lift people out of poverty.
Correct answer is: Generating employment opportunities
Q.14 Entrepreneurship fosters technological development by:
Avoiding research and development
Investing in innovation and new technologies
Copying existing technologies only
Restricting knowledge sharing
Explanation - Entrepreneurs drive technological progress through research, innovation, and adopting new technologies.
Correct answer is: Investing in innovation and new technologies
Q.15 Which is a direct effect of entrepreneurship on industrial growth?
Declining production
Increase in the number of industries
Reduction in investments
Lowering exports
Explanation - Entrepreneurial activity leads to the establishment of more industries, fostering industrial growth.
Correct answer is: Increase in the number of industries
Q.16 How does entrepreneurship help in skill development?
By creating educational institutions only
Through on-the-job training and self-employment
By hiring unskilled labor exclusively
By avoiding technological adoption
Explanation - Entrepreneurs provide opportunities for learning and skill acquisition, which strengthens human capital.
Correct answer is: Through on-the-job training and self-employment
Q.17 Entrepreneurship contributes to GDP growth by:
Increasing production of goods and services
Reducing employment
Limiting investments
Discouraging exports
Explanation - Entrepreneurial ventures increase the production output of an economy, thereby contributing to GDP growth.
Correct answer is: Increasing production of goods and services
Q.18 Which role of entrepreneurship encourages social change?
Promoting traditional jobs only
Introducing innovative ideas and products
Maintaining status quo
Discouraging new ventures
Explanation - Entrepreneurs bring new ideas and products that change consumption patterns and societal behavior.
Correct answer is: Introducing innovative ideas and products
Q.19 Entrepreneurship attracts foreign investment by:
Increasing market opportunities
Reducing domestic production
Limiting exports
Discouraging innovation
Explanation - Entrepreneurial activities make a country’s economy more attractive to foreign investors seeking growth opportunities.
Correct answer is: Increasing market opportunities
Q.20 Which of the following best describes entrepreneurship’s role in economic diversification?
Focusing only on agriculture
Encouraging a variety of industries and services
Restricting to a single sector
Promoting only imports
Explanation - Entrepreneurs help in diversifying the economy by establishing businesses across multiple sectors.
Correct answer is: Encouraging a variety of industries and services
Q.21 How does entrepreneurship help in mobilizing resources?
By hoarding capital
By organizing land, labor, and capital for production
By avoiding investments
By reducing labor participation
Explanation - Entrepreneurs efficiently gather and utilize resources to create goods and services, promoting economic activity.
Correct answer is: By organizing land, labor, and capital for production
Q.22 Entrepreneurship promotes economic development by:
Creating monopolies only
Encouraging innovation and competition
Discouraging investment
Reducing employment opportunities
Explanation - Entrepreneurs introduce new products, services, and competition, which boosts overall economic growth.
Correct answer is: Encouraging innovation and competition
Q.23 Which of the following is an indirect effect of entrepreneurship?
Reduction in national income
Improvement in infrastructure and social services
Decline in skill levels
Limiting technology adoption
Explanation - Entrepreneurial growth often leads to better infrastructure, healthcare, and education indirectly benefiting the economy.
Correct answer is: Improvement in infrastructure and social services
Q.24 Entrepreneurs play a key role in economic development by:
Encouraging unemployment
Creating new business opportunities
Reducing production capacity
Limiting investments
Explanation - Entrepreneurs stimulate economic activity by identifying opportunities and converting them into viable businesses.
Correct answer is: Creating new business opportunities
Q.25 Which of the following statements reflects entrepreneurship’s contribution to export earnings?
Entrepreneurs discourage exports
Entrepreneurs produce competitive goods for international markets
Entrepreneurs focus only on domestic markets
Entrepreneurs increase import dependency
Explanation - Entrepreneurial ventures that produce quality goods for global markets enhance export earnings and foreign exchange.
Correct answer is: Entrepreneurs produce competitive goods for international markets