Important Questions for Chapter 4 Globalisation and the Indian Economy Class 10 Economics
Important Questions1
Why do MNCs Set-up their offices and factories in those regions where they get cheap labour and other resources?
Answer
Because of low cost of production.
VSAQ
2
Amit is using his money to buy assets like house, commercial land and machines. Write what is he actually doing?
Answer
He is investing his money with a hope of earning profits from these assets.
VSAQ
3
What do you mean by Investment’?
Answer
The money that is spent to buy assets such as land, building, machines and other equipment is called investment.
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4
What is ‘Foreign Investment’?
Answer
Investment made by the MNCs from foreign countries is called foreign investment.
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5
What attracts the foreign investment?
Answer
Infrastructural facilities.
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6
Why had the Indian Government put barrier to foreign trade and foreign investment after independence?
Answer
To protect the producers within the country from foreign competition.
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7
Why are MNCs setting their customer care centres in India?
Answer
MNCs are setting up their customer care centres in India due to availability of cheap skilled labour and good English speaking people.
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8
Due to which reason the latest models of different items are available within our reach?
Answer
Globalisation.
VSAQ
9
How many countries are currently the members of the World Trade Organization (WTO)?
Answer
It has 164 member countries as on 29 July, 2016.
VSAQ
10
In which year, the government started to remove barriers on foreign trade and foreign investment.
Answer
In 1991.
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11
Why are the Chinese toys popular in the world?
Answer
Because Chinese toys are cheaper and have latest designs.
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12
Name the organization which lay emphasis on liberalisation of foreign trade and foreign investment in India.
Answer
World Trade Organization (WTO).
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13
Where is the main Head Office of WTO?
Answer
Geneva-Switzerland.
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14
What is the most common route for investments by MNCs in countries around the world?
Answer
Buy existing local companies.
VSAQ
1
Explain any three ways in which MNCs set up or control production in other countries.
Answer
• Jointly with some local companies of the existing country.
• Buy the local companies and then expand its production with the help of modern technology.
• They place orders for small producers and sell these products under their own brand name to the customers worldwide.
SAQ
2
How does foreign trade lead to integration of markets across the countries? Give any three examples.
Answer
Foreign trade is the main channel which connects the markets of various countries. Foreign trade lead to integration of markets across the countries as follows :
• Creates opportunities for the producers to reach beyond the domestic markets or the markets of their own countries.
• Import of goods from various countries provides choice of goods for consumer beyond the goods that are produced domestically.
• Producers of different countries compete with each other although they are thousands of miles away.
SAQ
3
Where do MNCs Set-up their production units? Explain.
Answer
• MNCs Set-up production units at such a place where they can produce their goods at a minimum cost.
• The place where markets are closer.
• The place where skilled and unskilled labour is available at low cost.
• Other factors of production are assured. Government policies are favourable.
SAQ
4
In recent years how our markets have been transformed? Explain with examples.
Answer
Transformation of our markets:
• There is relatively a wide choice of goods and services before us in the market. The latest models of digital cameras, mobile phones and televisions made by the leading manufactures of the world are within our reach.
• Every season new model of automobile can be seen on Indian roads and the Indian are buying vehicles produced by the top companies of the world.
• A similar explosion of brands can be seen for many other goods: from shirts to televisions to processed fruit juices.
SAQ
5
Enumerate any three features of Multinational Corporations.
Answer
• They Set-up their factories and offices in more than one country.
• They Set-up their units where the cost of production is low and higher profits can be earned.
• They set up their units where they can get cheap labour and other resources.
SAQ
6
“A wide ranging choice of goods are available in the Indian markets.” Support the statement with examples in context of Globalisation.
Answer
A wide ranging choice of goods:
• The latest models of the digital cameras, mobile phones and televisions made by world’s leading manufacturers of the world are available in the local market.
• New models of automobiles can be seen on Indian roads.
• Consumer now get a wide range of variety of a product at cheaper prices.
SAQ
7
Explain with three examples how top Indian companies have been benefited from Globalisation.
Answer
Several top Indian companies have been able to benefit from Globalisation:
• They have invested in newer technology and production methods and raised their production standards.
• Some have gained from successful collaborations with foreign companies.
• Globalisation has enabled some large Indian companies to emerge as multinational themselves. For example: Tata Motors and Infosys.
SAQ
8
How has Globalisation created new opportunities for companies providing services in India? Explain.
Answer
• Globalisation has created new opportunities for companies providing services particularly those involving IT.
• The Indian company producing a magazine for the London based company and call centres are some examples.
• Besides, a host of services such as data entry, accounting, administrative tasks and engineering are now being done cheaply in India and are exported to the developed countries.
SAQ
9
What is Globalisation? Explain.
Answer
• Globalisation is a process of rapid integration or interconnection between countries through foreign trade and foreign investments by multinational Corporations (MNcs).
• More and more goods and services, investments and technology are moving between countries.
• Globalisation is the integration between countries through foreign trade and foreign investments by Multinational Companies (MNCs).
SAQ
10
How can the benefits of globalisation be shared better? Explain.
Answer
The benefits of Globalisation can be shared better in the following ways:
• The government policy must protect the interest, not only of the rich and the powerful, but of all the people in the country.
• The government can ensure that labour laws are properly implemented and workers get their rights.
• It can support small producers to improve their performance till they become strong enough to compete.
• It can use trade and investment barriers.
SAQ
11
Should more Indian companies emerge as MNCs? How would it benefit the people in the country?
Answer
Yes, more Indian companies should emerge as MNCs. It would benefit the people in the country as:
• New job opportunities would be created by the emergence of Indian companies as MNCs.
• Local companies that provide raw materials and other services to these companies to get prospered.
• It would also lead to rise in production standards, and improvement in the standard of living of the people.
SAQ
12
Describe any three ways in which countries can be linked through globalisation.
Answer
• By movement of goods
• By movement of services
• By movement of investments
• By movement of technology
SAQ
13
“Foreign trade is an important component of globalization”. Explain any three points in this regard.
Answer
• Foreign trade implies exchange of goods and services across the countries.
• It helps to expand the size of market for producers.
• Producers and consumers can get commodities produced in any part of the world.
• It works to integrate markets in different countries.
SAQ
14
How did ‘Cargill Foods’ become the largest producer of edible oils in India? Explain.
Answer
• Cargill foods is a very large American MNC. It has bought over smaller Indian companies such as Parakh Foods in order to expand the range of its production of edible oils in India.
• Parakh foods had built a large marketing network in various parts of India. Where its brand was well reputed.
• Also, Parakh foods had four oil refineries whose control has now shifted to Cargill. It has become the largest producer of edible oils in India. It refines processes and markets various edible oils for the food industry.
SAQ
15
What are the Special Economic Zones (SEZs)? Why is the government setting up SEZs?
Answer
SEZs or Special Economic Zones are industrial areas with world class facilities.
• Companies who Set-up units in SEZs are exempted from tax for 5 years.
• They are set-up to attract foreign investment.
SAQ
16
Describe the impact of globalisation on small producers.
Answer
• The small producers were hit badly by globalisation as they have limited resources.
• They could not stand the competition and had to shut down. Some industries like batteries, capacitors, plastics, toys, tyres, dairy products and vegetable oils are the industries which have suffered a lot.
• Due to this, a lot of people lost their jobs and faced unemployment.
SAQ
17
How globalisation has affected the lives of the people? Explain with any three examples.
Answer
Effect of globalisation on the lives of people are:
• Increased their investment in industries such as cell phones, automobiles, electronics, soft drinks, fast food or services such as banking in urban areas.
• Local companies supplying raw materials to these industries have prospered.
• Several top Indian companies have been able to benefit from the increased competition. They have invested in newer technology and production methods and raised their production standards. Some have gained from successful collaborations with foreign companies.
SAQ
18
Elaborate any three disadvantages of Multinational Corporations.
Answer
The disadvantages of MNCs are:
• Small manufacturers like—batteries, capacitors, plastic toys, tyres, dairy products and vegetable oil were victims of competition.
• Closing down of small units rendered many workers jobless.
• Most employers prefer to employ workers ‘flexibly’ which means that workers jobs are no longer secure.
SAQ
19
Explain the meaning of fair globalisation.
Answer
Fair globalisation would creat opportunities for all and also ensures that the benefits of globalization are shared by all.
• Government can play a major role in making this possible. Its policies must protect the interest of rich and poor both.
• Labour laws are properly implemented and the workers get their rights.
• It can support small producers by putting some restrictions or barriers.
• It can negotiate at the WTO for fairer rules.
SAQ
1
Describe any five factors that promote the Multinational Corporations (MNCs) to Set-up their production units in a particular place.
Answer
Factors that promotes MNCs:
• Close proximity to the market
• Availability of skilled and unskilled labour at low cost
• Assured production
• Governments liberalised policies
• Developed infrastructure.
• Safety measures.
LAQ
2
How are Multinational Corporations (MNCs) controlling and spreading their productions across the world? Explain.
Answer
The Multinational Corporations (MNCs) are controlling and spreading their production across the world in the following ways:
• MNCs Set-up their production units close to market.
• MNCs Set-up production units jointly with local companies.
• They Set-up units where there is skilled and unskilled labour available at low cost.
• Large MNCs in developed countries place orders for productions with small producers and gain tremendous power to determine price, quality, delivery and labour conditions for distant producers.
• By purchasing local companies.
LAQ
3
What steps should be taken to make trade more fair between the countries?
Answer
The following steps should be taken:• Before imposing trade barrier interest of the developing countries should be taken care.
• Rules and regulations should be uniform.
• Small producers should be supported to improve their performance till they become strong enough to compete.
• Labour laws should be implemented properly.
• Ensure that the developed countries do not retain trade barriers unfairly.
LAQ
4
How has information and communication technology stimulated globalisation process? Explain with examples.
Answer
Rapid improvement in technology has stimulated the globalisation process:
• Transportation technology has made much faster delivery of goods across long distances possible at lower costs.
• There are even more remarkable developments in information and communication technology.
• Telecommunication facilities are used to contact anyone around the world, to access information instantly, and to communicate from remote areas.
• Through internet, one can obtain and share information on almost anything. It also allows to send e-mail and talk across the world at negligible costs.
• For example a news magazine published for London readers is to be designed and printed in Delhi. The text of the magazine is sent through Internet to the Delhi office. The designers in the Delhi office get orders on how to design the magazine from the office in London using telecommunication facilities. The designing is done on a computer. After printing, the magazines are sent by air to London. Even the payment of money for designing and printing from a bank in London to a bank in Delhi is done instantly through the Internet.
LAQ
5
“Globalisation and greater competition among producers has been advantageous to consumers.” Support the statement with examples.
Answer
• There is greater choice before these consumers who now enjoy improved quality and lower prices for several products.
• People enjoy higher standards of living.
• Services of the top Indian companies have been able to benefit from the increased competition.
• They have invested in newer technology and production methods and raised their production standards.
• Wide ranging choice of goods in our markets is a recent phenomenon and have brought changes in lives of people.
LAQ
6
Explain the role of Multinational Corporations in the globalisation process.
Answer
MNCs play an important role in the globalisation process.
• MNCs control production in more than one country.
• They compete with the local producers directly even after being miles apart, thus integrating the markets.
• Their working leads to exchange of investments and products which leads to interconnection between diverse countries. Countries get linked when movement of goods, people, investment and services between different countries takes place. They can be linked as producers or consumers of same products or one can be a producer and the other consumer. The recent advancement in technology, transport and communication systems has enhanced globalisation.
LAQ
7
‘Globalisation has been advantageous to consumers as well as to producers.’’ Support the statement with suitable examples.
Answer
Globalisation has been advantageous to producers in the following ways:
• The producers now have access to the international markets.
• Globalisation has also enabled free movement of capital, i.e., via electronic transfers, etc.
• Globalisation has enabled access to foreign investment in capital and technology via Foreign Direct Investment, etc.
Globalisation has been advantageous to consumers in the following ways:
• Globalisation has also given rise to intense competition due to opening up of markets to foreign companies. As a result, this has led to the increase in product quality and decrease in the prices of the products.
• The consumers have benefited from the arrival of MNCs as they have now larger choice in the goods that are available to them in the market.
LAQ
8
Describe the impacts of globalisation on Indian economy with examples.
Answer
Impacts of globalization on Indian economy:
• Higher standard of living in urban areas.
• The impact has not been uniform among producers and workers.
• There is greater choice before the consumers who now enjoy improved quality and lower prices for several products.
• MNCs have increased their investments in India leading to more job opportunities.
• Globalization has enabled some large Indian companies to emerge as MNCs themselves like Tata Motors, Infosys, Ranbaxy, Asian Paints etc.
• Globalisation has also created new opportunities for companies providing services particularly those involving IT(Information Technology). For example: The Indian company publishing magazine for the London based company and call centers.
• Local companies supply raw materials to foreign industries and have prospered.
LAQ
9
Describe the major problems created by the globalisation for a large number of small producers and workers.
Answer
Globalisation for small producers and workers:
• It has led to widening of income inequalities among various countries.
• Workers jobs are no longer secure.
• Expansion of unorganized sector.
• Small manufacturers have been hit hard due to severe competition.
• Several units have been shut down rendering many workers jobless.
• Lives of workers are on the whims of employers.
• Workers are denied their fair share of benefits.
LAQ
10
“Fair globalisation would create opportunities for all and also ensure that benefits of globalisation are shared better.” Support the statement.
Answer
Fair globalisation create opportunities: If globalisation is not proving to be a fair deal. Fair globalisation would create opportunities for all and also ensure that benefits of globalisation are shared better.
• Government policies must protect the interests not only of the rich and powerful but of all the people in the country.
• Government can ensure that labour laws are properly implemented and the workers get their rights.
• Government can support small producers to improve their performance till they become strong enough to compete.
• If necessary the government can use trade and investment barriers.
• It can negotiate at the WTO for fairer rules.
• It can also align with other developing countries with similar interests to fight against the domination of developed countries in the WTO.
LAQ
1
“World Trade Organization rules have forced the developing countries to remove trade barriers.” Explain the values hampered due to this.
Answer
Values hampered due to this are:
• Equal benefits and opportunities for all the people.
• Equality.
• Fair trade rules and practices.
VBQ
2
“Information and communication technology has played a major role in spreading out production of services across countries.” Support the statement with suitable examples.
Answer
• Telecommunication facilities are used to contact and communicate and to access information.
• Internet includes transfer of technology, money and capital across countries.
• Speedy transfer of information technology, money and capital integrate different countries of the world.
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