NATURE AND PURPOSE OF

BUSINESS
By Dhananjay Kochar and Jeenal
Arawalia
Guided by Prerna Mam
History of Trade and Commerce
 Silk route: Network of trade routes connecting
the East and West
Facts
 It began 2100 years ago

 Total length 9000 km

 5 silk roads from China

 Spice Route : Network of sea routes that link
East with West
Facts
 Also known as Maritime Route

 Spice Trade began in Middle East over 4000

years ago
 Questions
1. The progress of domestic and international
trade in ancient India developed due to flow of
wealth through and routes.
a) Silk route and Static route
b) Static route and Dynamic route
c) Dynamic and Spice route
d) Spice and Silk route
Ans d) spice and silk route
 2. Which of the following statement is true?

a) No trade centres and industrial belt

started
b) The trade was mainly carried but by air
c) There were some trade regulations,
different types of coins and weighting
practices
d) The maritime route was linked to North
and south
Ans c) there were some trade regulations, different types of coins and weighting
practises
 Indigenous Banking System
Banking system that involves private
firms or individual who acts as bank
for producing financial services such
as loan and accepting deposit.
Hundi and Chitti were used to buy
and sell of goods on credit
Hundi and Chitti:- Financial
instrument which was used for
carrying out trade and credit
transactions
 Types of Hundi
 Darshani : Hundi payable at sight or
hundi payable on demand
 Muddati : Payable after specific
period of time
 Development Of Indigenous Banking
System
1. People began to deposit precious metal.
2. Seths and banker started supplying money.
3. Agriculture and domestication of animals also
helped generating surplus and saving of
investment.
4. There was also a development of kharkhanas
and workshps.
 Questions

3. Which of the following is

Darshani hundi?
a) Dhani Jog

b) Firman Jog

c) Jokhmi

d) Sah Jog
Ans d) Sah Jog
 4. What is the function of Dekhan
har hundi?
a) Payable to the presenter or
bearer
b) Hundi made payable to order

c) Hundi payable on order

following fixed term
d) Payable to any person
Ans a) Payable to the presenter or bearer
5. Which coin become a
medium of exchange?
a) Gold

b) Silver

c) Metal

d) Bronze

Ans c) Metal
6. and become an instrument for
supplying money for producing more goods
during indigenous banking system
a) Hundi And Chitti
b) Banker And Seths
c) Commercial Banks And Industrial Banks
d) Commission Agents And Brokers

Ans d) Commission agents and brokers

7. Indigenous banks lost its charm
with the advent of .
a) The institution of Jagat Seths

b) Commission Agent

c) Commercial and foreign banks

d) Industrial banks

Ans c) Commercial and foreign bank

8. In development of kharkhanas and
workshop, family based system was
practiced.
a) Quality training

b) Apprenticeship

c) Managerial training

d) Team training

Ans b) Apprenticeship
Apprenticeship : An arrangement in
Which someone learns art, trade or job
Under another
 Rise in intermediaries
Intermiadiaries : A Mediator

9. Began to act as executor and a

trustee
a) Bankers

b) Jagat Seths

c) Brokers

d) Traders

Ans a) Bankers
10. Benefited the manufactured
traders and merchants with
additional capital funds for
expansion and growth.
a) Indigenous banking

b) Commercial banks

c) Industrial banks

d) Commission agents

Ans a) Indignous banking

11. Charged high rate of
interest on foreign trade .
a) Commercial banks

b) Brokers

c) The institutions of Jagat Seths

d) Commission agents

Ans c) The Institutions of Jagat

Seths
 Transport

Land Water
transport Transport
 Questions

12. The northern roadways route had stretched

from to .
a) Kashmir to Kanyakumari

b) Taxila to kashmir

c) Orissa to Bengal

d) Bengal to Taxila

Ans d) Bengal to Taxila

13. Coast on which muzuris is
situated has long history of
international trade.
a) Calicut

b) Malabar

c) Western

d) Eastern

Ans b) Malabar
14. Was known as Black Gold
a) Pepper.

b) Alluminium

c) Clove

d) Mustard seeds

Ans a) Pepper
15. Coast was so popular that it was
even visited by chinese ships to
acquire essential items from middle
east as well as pepper, diamonds,
pears, cotton from India.
a) Western coast

b) Calicut coast

c) Coromandel coast

d) Malabar

Ans b) Calicut coast

 Trading Communities
16. In western India, which community dominates
trade?
a) Bhats

b) Merchants

c) Chettiars

d) Mahajans

Ans d) Mahajans
17. Bhats were trade dominating
community of which regions?
a) Western India

b) Punjab

c) Urban centres

d) Gujarat and Rajasthan

Ans d) Gujarat and Rajasthan

18. In urban centres Mahajans
communities represented their chief
called .
a) Nagar Seth

b) Hakim

c) Wakil

d) Mullas

Ans a) Nagar Seth

 Major Trading Centres
 Facts:
 Surat was the first trading centre in India.
 Patna was known as Patliputra earlier.
 Tamralipti is one of the greatest port connected
both by sea and land with west and far east
 World Trade centre Kolkata was the largest
trading centre before independence.
19. Was major centre of export
of stones.
a) Peshwar

b) Pataliputra

c) Mathura

d) Surat

Ans b) Pataliputra
20. Peshwar was an important export centre
for and for import of .
a) Wool and Horse

b) Cotton and Wool

c) Silk and Horse

d) Silk and Cotton

Ans a) Wool and Horse

21. Was a major centre of land
resource between India and central
Asia.
a) Mathura

b) Taxila

c) Surat

d) Kaveripatta

Ans b)Taxila
22. Become famous for beautiful
gold silk cloth and sandalwood
workmanship.
a) Ujjain

b) Varanasi

c) Indraprastha

d) Madura

Ans b) Varanasi
23. Here chinese used to come in
foreign chips to purchase pearls,
glass, and raw stones and in return
they sold gold silk. Which port is
this?
a) Madura

b) Kaveripatta

c) Kanchipuram

d) Surat

Ans b) Kaveripatta
24. was an emporium of trade .
a) Surat

b) Ujjain

c) Patna

d) Mathura

Ans d) Mathura
25. Which of the following is not
included in major exports?
a) Wheat

b) Copper

c) Turquoise

d) Coral

Ans d) Coral
26. Activity which undertaken by people
with an objective of earing money is
called?
a) Economic activities

b) Non economic activities

c) Business

d) None of above

Ans a) Economic activities

27. Refers to these activities which are
connected with the production, purchase,
sale or distribution of goods and services
with main objective of earing profit .
a) Employment

b) Business

c) Profession

d) None of the above

Ans b) Business
28. What is the main objective of
employment?
a) Earning profit

b) Providing service

c) Earn income in form of salary

d) None of these

Ans c) Earn income in the form of

salary
29. Do there is need of capital
investment in Profession?
a) Yes

b) No

Ans a) yes
30. Which of the following cannot be
classified as objective of business?
a) Investment

b) Productivity

c) Innovation

d) Profit earning

Ans a) Investment
31. What is the purpose of non
economic activities?
a) Creation of wealth

b) Service motive

c) Psychological satisfaction

d) NOTA

Ans c) Psychological satisfaction

32. Every business enterprise either
produces or procures goods or services
from producer. Which characteristics of
business is highlighted here?
a) Procurement of goods and services

b) An economic activity

c) Profit earning

d) Uncertainity of risk

Ans a) Procurement of goods and services

33. Ritu bought a pair of shoes for Rs 3000. her
friend liked that shoes very much so Ritu sold
that shoes to her friend for Rs 3500 and made a
profit of Rs 500.after completing her studies
Ritu opened a shop of shoes for girl.
1. Can transaction between Ritu and her friend
be termed as business?
a) No

b) Yes

c) Maybe

d) Having no idea

Ans a) No
2. Can you state the feature of above
question ?
a) Earning profit

b) Regular basis

c) An economic activity

d) None of the above

Ans b) regular basis

3. Can the sale of shoes on her
shop be called as business ?
a) Yes

b) No

c) Maybe

d) Having no idea

Ans a) yes
34. Which of the following is not an
economic objective of bussiness?
a) Social service

b) Survival

c) Profit

d) Growth

Ans a) Social service

35. Large business houses undertake
various projects of community services
such as running charitable dispensaries,
schools, hospitals etc. which objective of
business is shown here?
a) Employment generation

b) Survival

c) Growth

d) Social service

Ans d) social service

Role of Profit in Business
36.ABC ltd. is charging very low price which is
just covering their cost so that it can remain in
competitive market. ABC ltd is achieving
which organisational objective?
a) Survival

b) Profit

c) Growth

d) NOTA

Ans a) survival
37. More risk more profit, which
objective is highlighted here?
a) Symbol of efficiency

b) Reward for risk bearing

c) Goodwill

d) Expansion

Ans b) Reward for risk bearing

38. Canara bank openend a new branch in
Mumbai. It is fullfilling which of the
following organisational objective?
a) Survival

b) Growth

c) Profit

d) Innovation

Ans b) Growth
Classification of Business Activities
39. Refers to an activity which converts
raw material into useful products.
a) Commerce

b) Industry

c) Business

d) NOTA

Ans b) Industry
40. The term is also refer to a group
of firms producing similar goods.
a) Industry

b) Business

c) Trade

d) NOTA

Ans a) Industry
42. Industries are those activities which
involve extraction of somethinng from natural
resoures such as minerals from earth, fish from
rivers etc.
a) Primary Industry

b) Genetic industry

c) Extractive industry

d) Secondary industry

Ans c) Extractive industry

43. Which of the following is not an
example of genetic industry?
a) Pisiculture

b) Sericulture

c) Rearing of cattle

d) Mining

Ans d) Mining
44. Which of the following is an
example of consumer goods?
a) Tools

b) Machinery

c) Soap

d) Equipment

Ans c) Soap
45. In industry, the basic raw
material is broken into different
parts to produce finished products?
a) Synthetic

b) Manufacturing

c) Secondary

d) Analytical

Ans b)Manufacturing
46. Name the type of manufacturing
industry in which various finished
products are combined to produce a new
finished product.
a) Assembly

b) Synthetic

c) Processing

d) Analytical

Ans a) assembly
47. Industry is concerned with
providing services which facilitate a
smooth flow of goods and services.
a) Primary

b) Constructiom

c) Manufacturing

d) Tertiary

Ans d) Tertiary
Commerce : Directly or indirectly helps in
distributin of goods to the ultimate consumer
48. Is considered as backbone of industry.
a) Commerce

b) Trade

c) Aids to trade

d) NOTA

Ans a) Commerce
49. The service which is related to the
following cases:
The sevices which helps in removing
hindrance of knowledge
a) Knowledge

b) Advertising

c) Insurance

d) All of the above

Ans b) Advertising
50. Functions of commerce does not
include:
a) Helps in removing hindrance of place

b) Helps in removing hindrance of time

c) Helps in removing hindrance of

knowledge
d) Helps in removing hindrance of money

Ans d) Helps in removing hindrance of

money
 Business risk
51. What is the nature of risk and no risk no gain
a) Risk arises due to uncertainities

b) Risk is an essential part of every business

c) Profit is the rweward for bearing risk

d) NOTA

Ans c) Profit is the rweward for bearing risk

52. Earthquake comes under which
type of risk?
a) Natural cause risk

b) Economic cause risk

c) Human cause risk

d) Physical cause risk

Ans a) Natural cause risk

53. Change in technology comes under which
type of risk?
a) Economic cause

b) Natural cause

c) Physical cause

d) NOTA

Ans c) Physical cause

54. Business risk is not likely to arise
due to
a) Changes in government policy

b) Good management

c) Employee dishoesty

d) Power failure

Ans b) Good management