Chapter 3 Question Bank: Institutional Support for Entrepreneurship Development

Chapter 3 Question Bank: Institutional Support for Entrepreneurship Development

Multiple Choice Questions (MCQs)

1. Which of the following organizations provides financial assistance to small-scale industries?
   a) NABARD
   b) SIDBI
   c) NSIC
   d) All of the above
   Answer: d) All of the above
2. The primary objective of NSIC (National Small Industries Corporation) is:
   a) Conducting market research
   b) Promoting and developing small industries
   c) Offering large-scale industrial loans
   d) Training employees
   Answer: b) Promoting and developing small industries
3. Which institution is responsible for rural development in India?
   a) NABARD
   b) FICCI
   c) CII
   d) SEBI
   Answer: a) NABARD
4. The primary function of SIDBI is:
   a) Developing infrastructure
   b) Providing financial support to MSMEs
   c) Managing foreign trade
   d) Regulating capital markets
   Answer: b) Providing financial support to MSMEs
5. DIC stands for:
   a) Department of Industrial Coordination
   b) District Industrial Centre
   c) Development Institute for Commerce
   d) Directorate of Investment Companies
   Answer: b) District Industrial Centre
6. Which of the following offers financial assistance to rural entrepreneurs?
   a) NABARD
   b) RBI
   c) IRDAI
   d) None of the above
   Answer: a) NABARD
7. Which institution focuses on promoting women entrepreneurship in India?
   a) Women’s Development Corporation
   b) NABARD
   c) NITI Aayog
   d) SIDBI
   Answer: a) Women’s Development Corporation
8. The Ministry responsible for MSMEs in India is:
   a) Ministry of Finance
   b) Ministry of MSME
   c) Ministry of Commerce
   d) Ministry of Labour
   Answer: b) Ministry of MSME
9. The Industrial Policy of 1991 emphasized:
   a) Privatization and liberalization
   b) Public sector expansion
   c) Increased import duties
   d) Strict industrial regulations
   Answer: a) Privatization and liberalization
10. Which of the following is NOT an institutional support for entrepreneurs?
    a) NSIC
    b) SIDBI
    c) SEBI
    d) LIC
    Answer: d) LIC
11. DICs provide support primarily to:
    a) Startups in urban areas
    b) Entrepreneurs in rural and semi-urban areas
    c) Large corporations
    d) Government projects
    Answer: b) Entrepreneurs in rural and semi-urban areas
12. The primary aim of KVIC (Khadi and Village Industries Commission) is:
    a) Promoting urban industries
    b) Supporting cottage industries
    c) Training IT professionals
    d) Facilitating imports
    Answer: b) Supporting cottage industries
13. MSME stands for:
    a) Micro, Small, and Medium Enterprises
    b) Medium and Small Market Enterprises
    c) Micro and Standard Manufacturing Entities
    d) Medium and Small-scale Marketing Entities
    Answer: a) Micro, Small, and Medium Enterprises
14. The Industrial Development Bank of India (IDBI) provides:
    a) Short-term loans
    b) Long-term finance for industrial development
    c) Subsidies for agriculture
    d) Insurance services
    Answer: b) Long-term finance for industrial development
15. Which agency provides credit insurance and risk cover for exporters?
    a) ECGC
    b) EXIM Bank
    c) RBI
    d) NABARD
    Answer: a) ECGC
16. NABARD stands for:
    a) National Bank for Agriculture and Rural Development
    b) National Bureau for Agricultural Research and Development
    c) National Agency for Banking and Rural Development
    d) None of the above
    Answer: a) National Bank for Agriculture and Rural Development
17. Which ministry manages the Khadi and Village Industries Commission?
    a) Ministry of MSME
    b) Ministry of Textiles
    c) Ministry of Commerce
    d) Ministry of Agriculture
    Answer: a) Ministry of MSME
18. The Industrial Finance Corporation of India (IFCI) was set up to provide:
    a) Marketing solutions
    b) Long-term finance to industries
    c) Insurance services
    d) IT support
    Answer: b) Long-term finance to industries
19. The National Innovation Foundation promotes:
    a) Financial assistance
    b) Grassroots innovations
    c) MSME investments
    d) Rural education
    Answer: b) Grassroots innovations
20. Which organization promotes exports in India?
    a) FIEO
    b) NABARD
    c) ECGC
    d) IRDAI
    Answer: a) FIEO
21. SIDBI is headquartered in:
    a) Delhi
    b) Mumbai
    c) Lucknow
    d) Chennai
    Answer: c) Lucknow
22. The primary function of SEBI is:
    a) Regulating the stock market
    b) Financing MSMEs
    c) Encouraging entrepreneurship
    d) Supporting rural industries
    Answer: a) Regulating the stock market
23. Which body supports rural entrepreneurship through training programs?
    a) RUDSETI
    b) SIDBI
    c) NABARD
    d) KVIC
    Answer: a) RUDSETI
24. EDPs (Entrepreneurship Development Programs) are conducted to:
    a) Provide infrastructure
    b) Train potential entrepreneurs
    c) Offer legal compliance guidelines
    d) Manage risk insurance
    Answer: b) Train potential entrepreneurs
25. The Small Industries Development Organization (SIDO) focuses on:
    a) Industrial policy formulation
    b) Providing support services to small enterprises
    c) Export promotion
    d) Agricultural financing
    Answer: b) Providing support services to small enterprises

True or False Questions

1. NSIC focuses on the promotion and development of large industries.
   Answer: False
2. NABARD provides credit and financial support primarily to the agriculture and rural sectors.
   Answer: True
3. SIDBI stands for Small Industries Development Bank of India.
   Answer: True
4. The Ministry of Commerce manages the Khadi and Village Industries Commission (KVIC).
   Answer: False
5. District Industries Centres (DICs) are set up to promote and support large-scale businesses in urban areas.
   Answer: False
6. The primary objective of SIDBI is to finance small and medium enterprises.
   Answer: True
7. KVIC promotes the production and sale of khadi and other village industries products.
   Answer: True
8. NABARD only supports large-scale industrial projects.
   Answer: False
9. SEBI primarily regulates stock markets and ensures transparency in trading activities.
   Answer: True
10. Women’s Development Corporations are primarily established to support women entrepreneurs.
    Answer: True
11. RUDSETI provides infrastructure development for rural businesses.
    Answer: False
12. SIDO is primarily concerned with providing legal support to large businesses.
    Answer: False
13. ECGC offers credit insurance and financial risk cover to exporters.
    Answer: True
14. SIDBI is headquartered in New Delhi.
    Answer: False
15. The Industrial Development Bank of India (IDBI) provides short-term financial support to startups.
    Answer: False
16. FIEO is responsible for promoting and supporting export activities in India.
    Answer: True
17. MSME is an acronym for Micro, Small, and Medium Enterprises.
    Answer: True
18. EDPs are conducted to train and develop entrepreneurial skills among individuals.
    Answer: True
19. NABARD is directly involved in regulating the stock market.
    Answer: False
20. NSIC provides technical and marketing support to small-scale industries.
    Answer: True
21. DICs cater to the needs of entrepreneurs in rural and semi-urban areas.
    Answer: True
22. The National Innovation Foundation supports grassroots innovations.
    Answer: True
23. SEBI stands for Securities and Exchange Board of India.
    Answer: True
24. SIDBI was established to promote startups in the field of agriculture exclusively.
    Answer: False
25. KVIC is managed by the Ministry of MSME.
    Answer: True

Fill in the Blanks

1. SIDBI stands for __________.
   Answer: Small Industries Development Bank of India
2. NABARD supports agriculture and rural development by providing __________.
   Answer: financial assistance
3. NSIC promotes the development of __________ industries.
   Answer: small-scale
4. The Ministry of __________ manages the Khadi and Village Industries Commission.
   Answer: MSME
5. ECGC provides credit insurance to __________.
   Answer: exporters
6. District Industries Centres (DICs) are established to promote industries in __________ areas.
   Answer: rural and semi-urban
7. RUDSETI conducts training programs for __________.
   Answer: rural entrepreneurs
8. The primary function of SEBI is to regulate the __________.
   Answer: stock market
9. MSME stands for __________.
   Answer: Micro, Small, and Medium Enterprises
10. SIDO provides support services to __________ enterprises.
    Answer: small
11. FIEO stands for __________.
    Answer: Federation of Indian Export Organisations
12. KVIC promotes __________ and village industries.
    Answer: khadi
13. The Industrial Policy of __________ emphasized privatization and liberalization.
    Answer: 1991
14. NABARD stands for __________.
    Answer: National Bank for Agriculture and Rural Development
15. Women’s Development Corporations are designed to support __________ entrepreneurs.
    Answer: women
16. NSIC provides __________ and marketing support to small-scale industries.
    Answer: technical
17. The headquarters of SIDBI is located in __________.
    Answer: Lucknow
18. ECGC stands for __________.
    Answer: Export Credit Guarantee Corporation
19. The Ministry of MSME manages __________ industries in India.
    Answer: micro, small, and medium
20. EDPs aim to develop __________ skills in individuals.
    Answer: entrepreneurial
21. The Industrial Development Bank of India provides __________ financial support to industries.
    Answer: long-term
22. NABARD primarily focuses on __________ development.
    Answer: rural
23. The National Innovation Foundation promotes __________ innovations.
    Answer: grassroots
24. DICs are primarily concerned with promoting industries in __________ areas.
    Answer: rural
25. KVIC is an initiative under the Ministry of __________.
    Answer: MSME

Answer in One Sentence

1. What does SIDBI stand for?
   Answer: SIDBI stands for Small Industries Development Bank of India.
2. What is the primary objective of NABARD?
   Answer: The primary objective of NABARD is to support agriculture and rural development.
3. What does NSIC focus on?
   Answer: NSIC focuses on promoting and developing small-scale industries.
4. Which ministry manages KVIC?
   Answer: The Ministry of MSME manages KVIC.
5. What is the primary function of SEBI?
   Answer: SEBI regulates the stock market and ensures transparency in trading.
6. Who does ECGC provide credit insurance to?
   Answer: ECGC provides credit insurance to exporters.
7. What is the purpose of EDPs?
   Answer: EDPs are conducted to train and develop entrepreneurial skills.
8. What does FIEO stand for?
   Answer: FIEO stands for Federation of Indian Export Organisations.
9. Where is the headquarters of SIDBI located?
   Answer: The headquarters of SIDBI is located in Lucknow.
10. What does NABARD stand for?
    Answer: NABARD stands for National Bank for Agriculture and Rural Development.
11. What is the focus of RUDSETI?
    Answer: RUDSETI focuses on conducting training programs for rural entrepreneurs.
12. What is the aim of SIDO?
    Answer: SIDO aims to provide support services to small enterprises.
13. What is the role of Women’s Development Corporations?
    Answer: Women’s Development Corporations support women entrepreneurs.
14. What does the Industrial Policy of 1991 emphasize?
    Answer: The Industrial Policy of 1991 emphasizes privatization and liberalization.
15. Who does DIC cater to?
    Answer: DIC caters to entrepreneurs in rural and semi-urban areas.
16. What does MSME stand for?
    Answer: MSME stands for Micro, Small, and Medium Enterprises.
17. What is the purpose of KVIC?
    Answer: KVIC promotes khadi and village industries.
18. What does ECGC stand for?
    Answer: ECGC stands for Export Credit Guarantee Corporation.
19. What does NSIC provide to small-scale industries?
    Answer: NSIC provides technical and marketing support to small-scale industries.
20. What is the role of FIEO?
    Answer: FIEO promotes and supports export activities in India.
21. What is the function of the National Innovation Foundation?
    Answer: The National Innovation Foundation promotes grassroots innovations.
22. What does DIC stand for?
    Answer: DIC stands for District Industries Centre.
23. Who regulates the stock market in India?
    Answer: SEBI regulates the stock market in India.
24. What is the full form of SIDO?
    Answer: SIDO stands for Small Industries Development Organization.
25. What is the focus area of NABARD?
    Answer: NABARD focuses on agriculture and rural development.

Chapter 2 Question Bank : Setting up a Venture

 Chapter 2 Question Bank: Setting up a Venture

Multiple Choice Questions 

1. What is the first step in setting up a venture?
   a) Business launch
   b) Idea generation
   c) Marketing plan creation
   d) Profit analysis
   Answer: b) Idea generation
2. Which factor is critical in the selection of a business location?
   a) Market proximity
   b) Low rental cost
   c) Remote location
   d) Lack of infrastructure
   Answer: a) Market proximity
3. A detailed project report includes:
   a) Only financial statements
   b) Operational and financial details
   c) Marketing strategies alone
   d) Just the business idea
   Answer: b) Operational and financial details
4. What is the purpose of market research in venture setup?
   a) To create financial instability
   b) To understand customer needs
   c) To ignore competition
   d) To reduce production quality
   Answer: b) To understand customer needs
5. Which of the following is an external source of funding?
   a) Personal savings
   b) Venture capital
   c) Family contributions
   d) Owner’s equity
   Answer: b) Venture capital
6. What is a significant challenge for startups?
   a) Access to technology
   b) Surplus resources
   c) Low market demand
   d) High competition
   Answer: d) High competition
7. The legal structure of a business is chosen based on:
   a) Financial resources and goals
   b) Manager’s preferences only
   c) Random selection
   d) Market fluctuations
   Answer: a) Financial resources and goals
8. What document is required for company registration?
   a) Memorandum of Association
   b) Marketing Plan
   c) Customer Feedback Form
   d) Purchase Order
   Answer: a) Memorandum of Association
9. A business's mission statement should:
   a) Be vague and non-specific
   b) Reflect its purpose and values
   c) Exclude long-term goals
   d) Focus only on profitability
   Answer: b) Reflect its purpose and values
10. What role does innovation play in setting up a venture?
    a) Reduces customer interest
    b) Drives business growth
    c) Decreases market relevance
    d) Eliminates the need for planning
    Answer: b) Drives business growth
11. The term "working capital" refers to:
    a) Long-term investments
    b) Day-to-day operational funds
    c) Fixed assets
    d) Inventory control
    Answer: b) Day-to-day operational funds
12. Licensing is required for:
    a) Market segmentation
    b) Adhering to legal regulations
    c) Hiring employees
    d) Advertising
    Answer: b) Adhering to legal regulations
13. A business plan is essential for:
    a) Securing funding
    b) Avoiding competition
    c) Excluding marketing strategies
    d) Limiting business growth
    Answer: a) Securing funding
14. SWOT analysis helps to identify:
    a) Business weaknesses and opportunities
    b) Marketing strategies only
    c) Financial stability alone
    d) Licensing requirements
    Answer: a) Business weaknesses and opportunities
15. Environmental scanning is performed to:
    a) Analyze external opportunities and threats
    b) Avoid competition
    c) Eliminate customer analysis
    d) Reduce internal strengths
    Answer: a) Analyze external opportunities and threats
16. The break-even point is when:
    a) Revenue equals expenses
    b) Profits exceed costs
    c) Losses begin to occur
    d) Expenses surpass revenue
    Answer: a) Revenue equals expenses
17. A sole proprietorship is characterized by:
    a) Single ownership
    b) Multiple investors
    c) Legal autonomy
    d) Complex registration
    Answer: a) Single ownership
18. What is the primary purpose of conducting feasibility studies?
    a) To assess the viability of a business idea
    b) To create financial challenges
    c) To avoid customer engagement
    d) To ignore market demands
    Answer: a) To assess the viability of a business idea
19. The success of a venture largely depends on:
    a) Proper planning and execution
    b) Luck and coincidence
    c) Minimal effort
    d) Ignoring market research
    Answer: a) Proper planning and execution
20. Which type of venture requires high innovation?
    a) Manufacturing business
    b) Technology startup
    c) Sole proprietorship
    d) Traditional farming
    Answer: b) Technology startup
21. Angel investors typically provide:
    a) Long-term loans
    b) Seed funding for startups
    c) Market research reports
    d) Marketing services
    Answer: b) Seed funding for startups
22. A limited liability partnership:
    a) Protects partners from personal financial losses
    b) Is similar to sole proprietorship
    c) Has unlimited liability
    d) Is not a legal entity
    Answer: a) Protects partners from personal financial losses
23. Government subsidies for startups:
    a) Support business development
    b) Limit business growth
    c) Replace market research
    d) Are mandatory for all ventures
    Answer: a) Support business development
24. The legal framework of a business affects its:
    a) Operational efficiency and compliance
    b) Marketing plans only
    c) Ignorance of taxation policies
    d) Flexibility in decision-making
    Answer: a) Operational efficiency and compliance
25. A unique selling proposition (USP) should:
    a) Differentiate the product or service
    b) Increase production costs unnecessarily
    c) Be similar to competitors' offers
    d) Focus only on pricing
    Answer: a) Differentiate the product or service

True/False Questions 

1. A business idea must always align with the entrepreneur's interests and skills.
   Answer: True
2. Market research is optional when setting up a venture.
   Answer: False
3. A detailed project report includes only financial forecasts.
   Answer: False
4. Licensing and legal permits are mandatory for most businesses.
   Answer: True
5. SWOT analysis helps in identifying external opportunities and threats.
   Answer: True
6. A sole proprietorship involves shared decision-making among partners.
   Answer: False
7. Innovation plays a crucial role in attracting customers and differentiating a business.
   Answer: True
8. The Memorandum of Association is a document required for company registration.
   Answer: True
9. A break-even analysis determines the point at which profits begin.
   Answer: False
10. Feasibility studies are unnecessary for established businesses.
    Answer: False
11. A USP (Unique Selling Proposition) helps differentiate a product or service in the market.
    Answer: True
12. Venture capital is an internal source of funding for startups.
    Answer: False
13. The legal structure of a business impacts its tax obligations and liability.
    Answer: True
14. Proper planning and execution are the key to the success of a new venture.
    Answer: True
15. Angel investors typically invest in late-stage businesses only.
    Answer: False
16. A limited liability partnership protects partners from personal financial losses.
    Answer: True
17. Startups require minimal planning due to their small scale.
    Answer: False
18. Government subsidies and grants can provide financial support to new ventures.
    Answer: True
19. A poorly planned business model is likely to fail, even with sufficient funding.
    Answer: True
20. Environmental scanning focuses solely on the business’s internal strengths and weaknesses.
    Answer: False
21. Selecting the right location for a business is critical for its operational success.
    Answer: True
22. Working capital refers to long-term fixed assets.
    Answer: False
23. A business's mission statement outlines its long-term goals and core purpose.
    Answer: True
24. High competition is often a significant challenge for startups.
    Answer: True
25. Licensing requirements vary depending on the type and size of the business.
    Answer: True

Fill in the Blanks Questions

1. The first step in setting up a venture is __________.
   Answer: Idea generation
2. __________ analysis identifies the strengths, weaknesses, opportunities, and threats of a business.
   Answer: SWOT
3. Market research helps to understand __________ needs.
   Answer: Customer
4. A __________ is required for legal registration of a company.
   Answer: Memorandum of Association
5. The point at which revenue equals expenses is known as the __________ point.
   Answer: Break-even
6. A detailed project report includes operational and __________ details.
   Answer: Financial
7. Angel investors provide __________ funding to startups.
   Answer: Seed
8. __________ capital refers to the funds used for day-to-day operations.
   Answer: Working
9. A sole proprietorship is owned and managed by __________ person.
   Answer: One
10. The __________ of a business affects its tax liabilities and legal requirements.
    Answer: Legal structure
11. A unique selling proposition (USP) __________ a product or service from its competitors.
    Answer: Differentiates
12. Venture capital is an __________ source of funding.
    Answer: External
13. Proper __________ and execution are critical to the success of a venture.
    Answer: Planning
14. A __________ partnership protects partners from personal financial losses.
    Answer: Limited liability
15. Government __________ help businesses financially in their early stages.
    Answer: Subsidies
16. Environmental __________ helps to identify external opportunities and threats.
    Answer: Scanning
17. A business __________ outlines its purpose and values.
    Answer: Mission statement
18. __________ investors fund startups in exchange for equity.
    Answer: Angel
19. Feasibility studies assess the __________ of a business idea.
    Answer: Viability
20. Innovation is essential for creating __________ products or services.
    Answer: Unique
21. Licensing is necessary for adhering to __________ regulations.
    Answer: Legal
22. __________ demand can be assessed through market research.
    Answer: Market
23. The __________ report is a blueprint for the business.
    Answer: Business plan
24. The primary aim of a break-even analysis is to calculate __________.
    Answer: Profitability
25. Startups often face challenges such as __________ competition.
    Answer: High

One-Sentence Answer Questions

1. What is the primary purpose of SWOT analysis?
   Answer: To identify the strengths, weaknesses, opportunities, and threats of a business.
2. What is the role of a unique selling proposition (USP)?
   Answer: To differentiate a product or service from competitors.
3. What does working capital refer to?
   Answer: Funds used for the day-to-day operations of a business.
4. What document is required for company registration?
   Answer: Memorandum of Association.
5. What is the main purpose of market research?
   Answer: To understand customer needs and preferences.
6. What is a break-even point?
   Answer: The point at which revenue equals expenses.
7. What is the primary challenge for startups?
   Answer: High competition.
8. How does a limited liability partnership benefit partners?
   Answer: It protects them from personal financial losses.
9. What do feasibility studies evaluate?
   Answer: The viability of a business idea.
10. What is the role of government subsidies in business?
    Answer: To provide financial support for new ventures.
11. What is the significance of a business's mission statement?
    Answer: It outlines the business's purpose and values.
12. What is the function of angel investors?
    Answer: To provide seed funding in exchange for equity.
13. How does innovation benefit a business?
    Answer: It helps create unique products or services.
14. Why is licensing important?
    Answer: To comply with legal regulations.
15. What is the importance of a business plan?
    Answer: To secure funding and outline operational strategies.
16. What does environmental scanning analyze?
    Answer: External opportunities and threats.
17. Why is idea generation the first step in venture creation?
    Answer: It lays the foundation for the business concept.
18. What is the purpose of a detailed project report?
    Answer: To outline operational and financial plans.
19. What is a sole proprietorship?
    Answer: A business owned and managed by one person.
20. Why is market location critical?
    Answer: To ensure proximity to customers and suppliers.
21. How does venture capital help startups?
    Answer: By providing financial resources for growth.
22. What does a SWOT analysis focus on?
    Answer: Business strengths, weaknesses, opportunities, and threats.
23. What is the importance of innovation in startups?
    Answer: To attract customers and maintain competitiveness.
24. Why is proper planning crucial for a new business?
    Answer: To ensure smooth operations and success.
25. What is the benefit of government schemes for startups?
    Answer: They help provide financial stability and growth opportunities.