CBSE 10 SST Globalisation and Indian economy Questions and Answers


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Exercise Questions and Answers

1. What do you understand by globalisation? Explain in your own words.

Ans: Globalisation is the process of rapid integration or interconnection between countries. MNCs are playing an important role in the globalisation process. In globalisation goods, services, investments and technology are moving in huge amounts between countries. Most regions are more connected with each other a few decades back within countries. Besides the movements of goods, services, investments and technology, people are also moving from one country to another in search of a better income.

2. What were the reasons for putting barriers to foreign trade and foreign investment by the Indian government? Why did it wish to remove these barriers?

Ans: The Indian government had put barriers to foreign trade and foreign investment after Independence.

(i) This was considered necessary to protect the producers within the country from foreign competition.

(ii) Industries were just coming up in the 1950s and 1960s, and competition from imports at that stage would not have allowed these industries to come up.

(iii) Starting around 1991, some far-reaching changes in policy were made in India. The government decided that the time had come for Indian producers to compete with producers around the globe.

(iv) It felt that competition would improve the performance of producers within the country since they would have to improve their quality.

(v) This decision was supported by powerful international organisations.

Thus, barriers to foreign trade and foreign investment were removed to a large extent.

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3. How would flexibility in labour laws help companies?

Ans: Flexibility in labour laws will help companies in being competitive and progressive. By easing up on labour laws, company heads can negotiate wages and terminate employment, depending on market conditions. This will lead to an increase in the company’s competitiveness. The government has also allowed flexibility in the labour laws to attract foreign investment Instead of hiring workers regularly, companies hire workers ‘flexibly’ for short periods when there is intense pressure of work. This is done to reduce the cost of labour for the company.

4. What are the various ways in which MNCs set up, control or produce in other countries?

Ans: MNCs set up, or control, production in other countries in the following ways :

  1. MNCs set up production based on the following factors:
  2. Closeness of the place to the markets.
  3. Availability of skilled and unskilled labour at low costs.
  4. Availability of other factors of production e., raw material, etc.
  5. Government’s favourable policies.
  6. After the assuring above conditions, MNCs set up factories and offices for production. They buy assets such as land, buildings, machines and other equipment.
  7. MNCs buy up local companies to expand production. MNCs with huge wealth can quite easily do so.
  8. Some MNCs start as independent entities right from the beginning.
  9. While some of the MNCs produce entirely for the local market, many others produce for the export markets.
  10. MNCs in developed countries place orders for production with small producers of developing countries for various products such as garments, and footwear. These products are supplied to the MNCs which sell them under their brand names to the customers. The MNCs decide their price, quality, delivery, and labour conditions for these distant producers.

Thus we see that there are a variety of ways in which MNCs are spreading their production and interacting with local producers in various countries across the globe. As a result, production in these widely dispersed locations is getting interlinked.

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5. Why do developed countries want developing countries to liberalise their trade and investment? What do you think should the developing countries demand in return?

Ans: Developed countries want developing countries to liberalise their trade and investment because then the MNCs belonging to the developed countries can set up factories in less-expensive developing nations, and thereby increase profits, with lower manufacturing costs and the same sale price. In my opinion, developing countries should demand, in return, some manner of protection for domestic producers against competition from imports. Also, charges should be levied on MNCs looking to set bases in developing nations.

6. “The impact of globalisation has not been uniform.” Explain this statement.

Ans: The impact of globalisation has not been uniform because only developed countries have gained profits due to globalisation. The developing countries are only a source of setting industries and getting cheaper labour and the entire profits are earned by the developed countries. Small industries and companies in developing countries have been constantly facing challenges in terms of earning profits and bringing their goods in the market.

7. How has the liberalisation of trade and investment policies helped the globalisation process?

Ans: Liberalisation of trade and investment policies has helped the globalisation process by making foreign trade and investment easier. Earlier, several developing countries had placed barriers and restrictions on imports and investments from abroad to protect domestic production. However, to improve the quality of domestic goods, these countries have removed the barriers. Thus, liberalisation has led to a further spread of globalisation because now businesses are allowed to make their own decisions on imports and exports. This has led to a deeper integration of national economies into one conglomerate whole.

8. How does foreign trade lead to the integration of markets across countries? Explain with an example other than those given here.

Ans: Integration of markets across countries:

(i) Foreign trade creates an opportunity for the producers to reach beyond the domestic markets, i.e., markets of their own countries.

(ii) Producers can sell their products not only in markets located within the country but can also compete in markets located in other countries of the world.

(iii) Similarly, for the buyers, the import of goods produced in another country is one way of expanding the choice of goods beyond what is domestically produced.

(iv) In general, with the opening of trade, goods travel from one market to another. The choice of goods in the markets rises. Prices of similar goods in the two markets tend to become equal. And, producers in the two countries now closely compete against each other even though they are separated by thousands of miles.

(v) For example, during the Diwali season, buyers in India have the option of choosing between Indian and Chinese decorative lights and bulbs. Many shops have replaced Indian decorative lights with Chinese lights. For Chinese light manufacturers, this provides an opportunity to expand their business.

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9. Globalisation will continue in the future. Can you imagine what the world would be like twenty years from now? Give reasons for your answer.

Ans: Globalisation will continue in the future as well. Twenty years from now, the production of goods will be more efficient, competition in the market will increase, advancement in every field will be evident and the quality and quantity of goods produced will also increase. Small industries and entrepreneurs will increase as more opportunities will be provided to them.

10. Supposing you find two people arguing: One is saying globalisation has hurt our country’s development. The other is telling, globalisation is helping India develop. How would you respond to these arguments?

Ans: Both arguments have some truth as mentioned below :

Globalisation has helped India develop as mentioned below :

  • Many MNCs are making an investment in India in different sectors like insurance banking and food processing. These investments have benefited people in several ways which has resulted in the development of the country.
  • Now people have choices. They can buy anything of their choice costly or cheap. People are getting jobs with good salaries. They increased their stander of living.
  • Many projects are going on with the help of foreign investment. Different states are making efforts to attract foreign companies to invest in their states and are successful in their mission.

Globalisation, however, has hurt the country’s development as mentioned below :

  • Small producers faced many challenges in globalisation. Batteries, capacitors, plastics toys, tires, dairy products and vegetable oil industries have been hit badly due to competition.
  • Many small units have been shut down rendering many workers jobless.

Thus, both arguments have some truth in them. However, if steps are taken to have fair globalization, then the adverse effects may be minimised and may not hurt the country’s development.

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11. Fill in the blanks.

Indian buyers have a greater choice of goods than they did two decades back. This is closely associated with the process of globalisation. Markets in India are selling goods produced in many other countries. This means there is increasing trade with other countries. Moreover, the rising number of brands that we see in the markets might be produced by MNCs in India. MNCs are investing in India because of cheaper production costs. While consumers have more choices in the market, the effect of rising demand and purchasing power has meant greater competition among the producers.


12. Match the following.

(i) MNCs buy at cheap rates from small(a) Automobiles
(ii) Quotas and taxes on imports are used to regulate trade items  (b) Garments, footwear, sports items
(iii)Indian companies that have invested abroad  (c) Call centres
(iv) IT has helped in spreading of production of services(d) Tata Motors, Infosys, Ranbaxy
(v) Several MNCs have invested in setting up factories in India for production(e) Trade barriers

Answer

(i) MNCs buy at cheap rates from small producers(b) Garments, footwear, sports items
(ii) Quotas and taxes on imports are used to regulate trade  (e) Trade barriers
(iii)Indian companies who have invested abroad  (d) Tata Motors, Infosys, Ranbaxy
(iv) IT has helped in spreading of production of services(c) Call centres
(v) Several MNCs have invested in setting up factories in India for production(a) Automobiles

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13. Choose the most appropriate option.

(i) The past two decades of globalisation have seen rapid movements in

(a) goods, services, and people between countries.

(b) goods, services, and investments between countries.

(c) goods, investments, and people between countries.

Ans: (b) goods, services, and investments between countries.

(ii) The most common route for investments by MNCs in countries around the world is to

(a) set up new factories.

(b) buy existing local companies.

(c) form partnerships with local companies.

Ans: (b) buy existing local companies.

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(iii) Globalisation has led to improvement in living conditions

(a) of all the people

(b) of people in the developed countries

(c) of workers in the developing countries

(d) none of the above

Ans: (d) none of the above

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Additional Questions and Answers

A. Multiple choice questions. (1 mark each)

1. for how long production was organised in countries only?

  1. Till the middle of the twentieth century
  2. Till the middle of the nineteenth century
  3. Till the middle of the seventeenth century
  4. Till the middle of the eighteenth century

Ans: b) Till the middle of the twentieth century

2. what did India export?

  1. Raw materials, foodstuff,
  2. Food stuff, finished product
  3. Raw materials, finished goods

Ans: a) Raw materials, foodstuff,

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3. what did India import?

  1. Raw materials
  2. Foods
  3. Finished goods

Ans: c) finished goods

4. how did distant countries get connected to each other?

  1. By trade
  2. By bus
  3. By import

Ans: a) by trade

5. full form of MNC.

  1. Multinational corporation
  2. Many national countries
  3. Metro national corporation

Ans: a) multinational corporation

6. how much cost saving do the workers of India do in MNC?

  1. 40-50%
  2. 50-60%
  3. 30-50%
  4. 50-70%

Ans: b) 50-60%

7. where do MNCs set up the office?

  1. where skilled labour available at low costs
  2. where unskilled labour available at low costs
  3. where markets are near production
  4. all the above

Ans: d) all the above

8. Investment made by MNCs is called

  1. foreign investment
  2. local investment
  3. domestic investment

Ans: a) foreign investment

9. who bought Parakh Food?

  1. American MNC
  2. Indian MNC
  3. London MNC

Ans: a) American MNC

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10. who controls Parakh food?

  1. America
  2. Cargill
  3. India

Ans: b) Cargill

11. what does Cargill food produce in large quantities?

  1. Garments
  2. Edible oil
  3. Sports item
  4. Medicine

Ans: b) Edible oil

12.full form of W.T.O.

  1. Worldwide trade organisation
  2. Workforce trade organisation
  3. World trade organisation

Ans: c) world trade organisation

13. who take initiative to start W.T.O?

  1. Developed countries
  2. Developing countries
  3. Undeveloped countries

Ans: a) Developed countries

14. which Indian industry has more benefited by Globalisation?

  1. IT
  2. Toy making
  3. Medicine

Ans: b) toy making

15. which country gets more benefits from Globalisation?

  1. Developed countries
  2. Developing countries
  3. Undeveloped countries

Ans: a) Developed countries

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16. Removing barriers by the government is known as

  1. Investment
  2. Foreign trade
  3. Liberalisation  

Ans: c) Liberalisation

17. who put restrictions on export?

  1. Developed countries
  2. W.T.O
  3. Government

Ans: c) Government

18. the process of integration or interconnection between countries is known as

  1. Liberalisation
  2. Globalisation
  3. Privatisation

Ans: b) Globalisation

19. tax on imports is an example of

  1. Foreign trade
  2. Trade barriers
  3. Export

Ans: b) trade barriers

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20. when did the barriers removed from foreign trade and foreign investment?

  1. 1950
  2. 1960
  3. 1991

Ans: c) 1991

21. when did industries come up?

  1. In 1950 & 1960
  2. In 1960 & 1970
  3. In 1930 & 1950

Ans: a) in 1950 & 1960

22. what is the aim of W.T.O?

  1. To privatised
  2. To liberalise international trade
  3. To manufacture

Ans: b) To liberalise international trade

23. how many members are in WTO till 2006?

  1. 150
  2. 149
  3. 139

Ans: a) 150

24. who play an important role for achieving the goal of globalisation?

  1. People & government
  2. Government & MNC
  3. MNC & people

Ans: a) people & government 

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B. Short answer type questions:

25. what is globalisation?

Ans: Globalisation is the process of rapid integration or interconnection between countries. MNCs are playing an important role in the globalisation process. In globalisation goods, services, investments and technology are moving in huge amounts between countries

26. what are the factors of globalisation?

Ans: the factors of globalisation

  • Development in telecommunication and transportation
  • Rapid growth in technology
  • Rise of multinational companies

27. state the drawback of globalisation.

Ans: a drawback of globalisation

  • Small industries have to face competition with many large companies
  • Due to competition, many small companies were shut down and workers were jobless.
  • Large companies need flexible workers that’s why workers are facing problems regarding jobs.

28. what were the roles of government in globalisation?

Ans: the government play an important role in globalisation:

  1. The government should ensure that the benefits of globalisation must be shared among all people of the country.
  2. The government have to protect the labour law and rights of the worker.
  3. The government support small industries to improve their performance till the time they become strong to compete.

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29. In a matter of years, our markets have been transformed! Explain.

Ans:  our markets are transforming digitally.

  1. As consumers, we have a wide range of choices of goods and services at our reaches like digital cameras, televisions and mobile phones.
  2. Earlier days when Ambassador and Fiat were the only cars in India. now in every season, new automobiles can be seen.
  3. Nowadays we have a wide-ranging choice of goods in the market which is a relatively recent phenomenon. Even two decades back we would not have a variety of goods in the Indian market.

30. What is Multinational Corporation?

Ans: MNCs is a company which owns or controls production in more than one nation. The MNCs set up their factories and offices in regions where labour and other materials are easily available. This is done so that the cost of production is low and the MNCs can earn greater profits. 

31. Write features of a Multinational Corporation?

Ans: features of Multinational Corporation:

  1. MNCs own or control the production in more than one Nation.
  2. MNCs set up their factories all over the world and widely spread.
  3. MNCs buy materials from small industries and sell the product by labelling their own brand name and earn profit.

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32. why MNCs are investing in China?

Ans: MNCs are investing in China because China produces products at a cheap rate. China’s production rate is high. They supply goods smoothly.

33. why do MNCs set up customer care centres in India?

Ans: India has skilled people. The youth of India is educated. They can speak English. MNCs can get low-pay employee to set up their customer services in India.

34. what is WTO?

Ans: WTO stands for World Trade Organisation whose aim is to liberalise international trade.

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Long answer

35. why do MNCs prefer to set up factories and offices in India?

Ans: MNCs prefer to set up factories and offices in India for the following reasons:

  1. India has labours who can work for low pay.
  2. India has resources for raw materials.
  3. India has skilled engineers who can handle technology easily.
  4. India has educated youth who can speak English.
  5. India has small industries that produce products for MNCs at low cost

36. what are the differences between foreign trade and foreign investment?

Ans:

Foreign trade: Trade between two or more two countries is called foreign trade. It includes imports and export among the nation.

Foreign investment: Investment made by MNCs is called foreign investment. Foreign investment is made to earn profits.

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37. what are the steps taken by developing countries of farmers against developed countries?

Ans: governments of developing countries have reduced trade barriers in accordance with WTO whereas developed countries ignore the rule and regulations of WTO.

They pay vast money for production to farmers. They also pay for export to other nations. So the farmer of developed countries can sell their product at low prices in other countries. This situation affects the farmer of developing countries negatively.

38. why have MNCs tried to interact with local producers across the globe?

Ans: MNCs tried to interact with local producers across the globe:

  1. For setting up factories with local companies.
  2. For using local companies for supplies products easily.
  3. For shutting down the competition in the market
  4. For buying local companies to spread connection

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39. what are the factors that enable globalisation in India?

Ans: the factors are:

  1. IT play an important role in spreading production over the countries. For news magazine published for London readers is designed and printed in Delhi.
  2. Inventions of technology like the internet, the phone etc are boosting communication and information technology in India.
  3. Rapid improvement in transport helps to deliver goods across long distances possible at a lower cost.

40. Describe Special Economic Zones (SEZs).

Ans: Special Economic Zones are those industrial areas which are set up to attract foreign investment in India. Those companies who set up their units are provided relaxation in taxes for an initial period of five years. The government has allowed flexibility in labour laws.

In such Special Economic Zones, world-class facilities like electricity, water, transport, storage, roads, and recreational and educational facilities are available.

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41. What are the steps taken to promote trade in developing countries?

Ans: The steps are:

  1. There should be no barriers.
  2. Trade between countries should be ‘free’.
  3. All countries in the world should liberalise their policies.

42. Why do governments use trade barriers? Example.

Ans: Tax on imports is called a barrier because some restriction has been set up.

Tax on imports is an example of trade barrier. Governments use trade barriers to increase or decrease (regulate) foreign trade and to decide what kinds of goods and how much of each, should come into the country.

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