NCERT Solutions for Class 10 Social Economics Chapter 4 Globalisation and the Indian Economy

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Question 1: What do you understand by globalisation? Explain in your own words.
Answer: Globalisation in today’s world has come to imply many things. It is the process by which the people of the world are unified into a single society and function together. This term is also often used to refer to economic globalisation: the integration of national economies into the international economy through trade, foreign direct investments, capital flows, migration and the spread of technology.

Question 2: What was the reason for putting barriers to foreign trade and foreign investment by the Indian government? Why did it wish to remove these barriers?
Answer: Barriers to foreign trade and foreign investment were put by the Indian government to protect domestic producers from foreign competition, especially when industries had just begun to come up in the 1950s and 1960s. At this time, competition from imports would have been a death blow to growing industries. Hence, India allowed imports of only essential goods.
Later, in the 1990s, the government wished to remove these barriers because it felt that domestic producers were ready to compete with foreign industries. It felt that foreign competition would in fact improve the quality of goods produced by Indian industries. This decision was also supported by powerful international organisations.

Question 3: How would flexibility in labour laws help companies?
Answer: 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.

Question 4: What are the various ways in which MNCs set up, or control, production in other countries?
Answer: The various ways in which MNCs set up, or control, production in other countries are by buying out domestic companies or making the latter work for them. Sometimes, MNCs buy mass produce of domestic industries, and then sell it under their own brand name, at much higher rates, in foreign countries. MNCs look towards developing nations to set up trade because in such places, the labour and manufacturing costs are much lower.

Question 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?
Answer: 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, the developing countries should demand, in return, for some manner of protection of domestic producers against competition from imports. Also, charges should be levied on MNCs looking to set base in developing nations.

Question 6: “The impact of globalisation has not been uniform.” Explain this statement.
Answer: “The impact of globalisation has not been uniform”. The truth of this statement can be verified if we observe the impact of MNCs on domestic producers and the industrial working class. Small producers of goods such as batteries, capacitors, plastics, toys, tyres, dairy products and vegetable oil have been hit hard by competition from cheaper imports. Also, workers are now employed “flexibly” in the face of growing competition. This has reduced their job security. Efforts are now on to make globalisation “fair” for all since it has become a worldwide phenomenon.

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

Question 8: How does foreign trade lead to integration of markets across countries? Explain with an example other than those given here.
Answer: Foreign trade leads to integration of markets across countries by the processes of imports and exports. Producers can make available their goods in markets beyond domestic ones via exports. Likewise, buyers have more choice on account of imports from other countries. This is how markets are integrated through foreign trade. For example, Japanese electronic items are imported to India, and have proved to be a tough competition for less-technologically-advanced companies here.

Question 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.
Answer: Globalisation will continue in the future. Twenty years from now, the world will be more globally connected and integrated into one international economy, if this process continues on a fair and equitable basis. Trade and capital flows will increase alongside the mobility of labour. This will occur because liberalisation will get augmented and MNCs will converge with other companies producing the same goods.

Question 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 organisations?
Answer: Globalisation has hurt our country’s development because: firstly, it has led to the annihilation of small producers who face stiff competition from cheaper imports. Secondly, workers no longer have job security and are employed “flexibly”.
Globalisation is helping India develop on account of the following reasons: firstly, the competition it entails has led to rise in the quality of products in the market. Secondly, it has made available a wider variety of goods in the market, for the buyer to choose from. Now, imported goods are easily available alongside domestic products.

Question 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 ______________. Markets in India are selling goods produced in many other countries. This means there is increasing ______________ 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 _____________. While consumers have more choices in the market, the effect of rising _______________ and ______________has meant greater ________________among the producers.
Answer:
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.

Question 13: Choose the most appropriate option.
(i) The past two decades of globalisation has 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.
(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.
(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
Answer:
(i) (b)
(ii) (b)
(iii) (d)

Multiple Choice Questions

1. Cargill Food’s is the largest producer of which of the following in India? [Delhi, 2012]
(a) Medicines
(b) Asian Paints
(c) Edible oil
(d) Garments

2. W.T.O. was started at the initiative of which one of the following group of countries? [Delhi, 2012]
(a) Rich countries
(b) Poor countries
(c) Developed countries
(d) Developing countries

3. Which one of the following organisations lays stress on liberalisation of foreign trade and foreign investment? [Delhi, 2012]
(a) International Labour Organisation
(b) International Monetary Fund
(c) World Health Organisation
(d) World Trade Organisation

4. Which one of the following is not characteristic of ‘Special Economic Zone’? [AI, 2012]
(a) They do not have to pay taxes for long period.
(b) Government has allowed flexibility in labour laws.
(c) They have world class facilities.
(d) They do not have to pay taxes for an initial period of five years.

5. Which one of the following Indian industries has been hit hard by globalisation? [AI, 2012]
(a) IT
(b) Toy making
(c) Jute
(d) Cement

6. Which one of the following type of countries has been more benefited from globalisation? [AI, 2012]
(a) Rich countries
(b) Poor countries
(c) Developing countries
(d) Developed countries

7. Removing barriers or restrictions set by the government is called: [CBSE (CCE) 2012]
(a) Liberalisation
(b) Investment
(c) Fovourable trade
(d) Free trade

8. Investment made by MNCs are termed as: [CBSE (CCE)2012]
(a) Indigenous investment
(b) Foreign investment
(c) Entrepreneur’s investment
(d) None of the above

9. What is the process of rapid integration or inter connection between countries called? [CBSE (CCE) 2012]
(a) Industrialization
(b) Globalization
(c) Liberalization
(d) Privatization

10. Which one of the following is an example of trade barrier? [CBSE (CCE) 2012]
(a) Tax on Exports
(b) Tax on Imports
(c) Free Trade
(d) Restriction on Export

11. Removal of barriers set by the government is known as: [CBSE(CCE)2012]
(a) Globalisation
(b) Liberalisation
(c) Industralisation
(d) Privatisation

12. Globalisation does NOT involve which one of the following? [Delhi 2011]
(a) Rapid integration between countries.
(b) More goods and services moving between countries.
(c) Increased taxes on imports.
(d) Movement of people between countries for jobs, education etc.

13. Which of the following is not a feature of a Multi-National Company? [AI 2011]
(a) It owns/controls production in more than one nation.
(b) It sets up factories where it is close to the markets.
(c) It organises production in complex ways.
(d) It employs labour only from its own country.

14. Liberalisation involves which one of the following? [Foreign 2011]
(a) Removal of trade barriers
(b) Increasing subsidy on fertilisers
(c) Increasing import duties on goods
(d) Increasing export duties on goods

15. The past two decades of globalisation has 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.

16. 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.

17. 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.

18. Globalisation, by connecting countries, shall result in
(a) lesser competition among producers.
(b) greater competition among producers.
(c) no change in competition among producers.

Additional Questions
19. Company that owns or controls production in more than one nation
(a) Foreign companies
(b) Government companies
(c) Multinational companies
(d) Private companies

20 Investment made by MNCs is called
(a) Mutual investment
(b) Inter-government investment
(c) Portfolio Investment
(d) Foreign investment

21. Benefit to the local company of joint production with MNCs is
(i) Money from MNCs for additional investments
(ii) Moral and Social support
(iii) Latest technology for production
(iv) All of them
(a) (i) and (ii)
(b) (ii) and (iii)
(c) (iii) and (iv)
(d) (i) and (iii)

22. Cargill Foods, a very large American MNC, has bought over smaller Indian companies such as
(a) Parakh Foods
(b) Amul
(c) Britannia
(d) None of the above

23. Cargill is now the largest producer of edible oil in India, with a capacity to make ………… pouches daily.
(a) 6 million
(b) 5 million
(c) 4 million
(d) 55 million

24. Examples of industries where production is carried out by a large number of small producers around the world
(a) Garments
(b) Footwear
(c) Sport items
(d) All of them

25. Ford motors came to India in
(a) 1996
(b) 1995
(c) 1994
(d) 1990

26. Effect of Chinese toys on Indian toy makers is
(a) No effect
(b) Making profits
(c) Suffering losses
(d) None of them

27. Rapid integration or interconnection between countries is known as
(a) Privatisation
(b) Globalisation
(c) Liberalisation
(d) Socialisation

28. Post 50 years have seen several improvements in
(a) Transportation technology
(b) Information technology
(c) Communication technology
(d) All of them

29. Tax on imports is an example of
(a) Terms of Trade
(b) Collateral
(c) Trade Barriers
(d) Foreign Trade

3B Removing barriers or restrictions set by the government is known as
(a) Privatisation
(b) Liberalisation
(c) Globalisation
(d) Socialisation

31. Around which year, need for removing barriers on foreign trade and foreign investment in India was felt ?
(a) 1990
(b) 1991
(c) 1992
(d) 2000
32. ……………. is one such organisation whose aim is to liberalise international trade
(a) UNICEF
(b) World Bank
(c) WTO
(d) IDBI

33. Till 2006, how many members were there in WTO?
(a) 139
(b) 150
(c) 101
(d) 149

34. Companies who set up production units in the Special Economic Zones (SEZs) do not have to pay taxes for an initial period of
(a) 2 years
(b) 5 years
(c) 4 years
(d) 10 years

35. Industries where small manufacturers have been hit hard due to competition.
(a) Batteries
(b) Tyres
(c) Dairy Products
(d) All of them

36. Number of workers that small industries in India employ
(a) 18 million
(b) 19 million
(c) 20 million
(d) 21 million

37. To get large orders, Indian exporters try hard to cut their own costs by
(a) Reducing cost of raw materials
(b) Reducing advertising and marketing cost
(c) Reducing electricity cost
(d) Cutting labour cost

38. To achieve the goal of fair globalisation, major role can be played by
(i) People
(ii) Government
(iii) MNCs
(iv) None of the above
(a) (i) and (iii)
(b) (ii) and (iv)
(c) (i) and (ii)
(d) (iii) and (iv)

39. It refers to globalisation which creates opportunities for all and ensures that its benefits are better shared.
(a) Privatisation
(b) Special Economic Zones (SEZ)
(c) WTO
(d) Fair globalisation

40. Allowing private sector to set up more and more of such industries as were previously reserved for public sector.
(a) Globalisation
(b) Privatisation
(c) Liberalisation
(d) Socialisation

ANSWERS