CBSE - CLASS X - Economics -- Chapter 4 : Globalisation and the Indian Economy : Question And Answer

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  • Published date: November 26, 2018
  • Modified date: November 28, 2018
    • Vasai East, Thane, Maharashtra

Q1: What is Multinational Corporations ?

Ans: A Multinational corporation is a company that owns or controls production in more than one nation. .

Q2: Why Multinational corporations set up factories out of their countries ?

Ans: Multinational corporations set up offices and factories for production in regions where they can get cheap labour and other resources. This is done so that the cost of production is low and the MNC’s can earn greater profits.

Q3: What do you understand by globalisation ? Explain in your own words.

Ans: Globalisation is the process of interaction and integration between people, companies, and governments worldwide. Globalization has grown due to advances in transportation and communication technology. With increased global interactions comes the growth of international trade, ideas, and culture. Globalization is primarily an economic process of interaction and integration that's associated with social and cultural aspects.

Q4: What was the reasons for putting barriers to foreign trade and foreign investment by the Indian government ? Why did it wish to remove these barriers ?

Ans: Following are the reasons for putting barriers to foreign trade investment by Indian government:

a) To protect the producers within the country from foreign competition.

b) To allow domestic producers to grow and mature their products for domestic consumers.

c) To reduce cash outflow by reducing imports. Only essential items such as machinery, fertilisers, petroleum etc. were imported.

These barriers were removed around starting of 1991 because:

a) The government decided that the time had come for Indian producers to compete with producers around the globe.

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

Q5: How would flexibility in labour laws help companies ?

Ans: By bringing flexibility in labour laws, rather then hiring workers on a regular basis, companies hire workers for short periods when there is intense pressure of work. This is done to reduce the cost of labour for the company.

 Q6: What are the various ways in which MNC’s set up, or control, production in other countries ?

 Ans: The various ways in which MNC’s set up, or control, production in other countries are:

 a) By buying local company which gives them immediate access to local company market channel and consumer base.

 b) By placing production order on smaller companies, branding the product and selling in market.

 c) By setting up partnership with local companies.

 d) By authorising local companies to provides sales and services to the MNC’s products.

 Q7: What are the benefits to local company by jointly setting production with MNC’s ?

 Ans: Following are the benefits to the local companies by jointly setting production with MNC’s :

a) MNC’s can provide money for additional investments, like buying new machines for faster production.

b) MNC’s might bring with them the latest technology for production.

Q8: Why do developed countries want developing countries to liberalise their trade and investment ? What do you think should developing countries demand in return ?

Ans: The developed countries want developing countries to liberalise their trade and investment because it helps them in:

a) Doing business with ease.

b) Making decisions freely about what they wish to import or export.

c) The cost of production can be brought down by giving subsidise land and power to MNC’s for setting up factories.

In return the developing countries should demand:

a) Transfer of technologies and best practices of doing business.

b) Job assurance for their citizen

d) Investment in Government initiated welfare schemes.

Q9: “The impact of globalisation has not been uniform”. Explain this statement.

Ans: The impact of globalisation has not been uniform because:

a) It has largely enhanced life style of well-off in society as MNC’s mostly focussed on cell phones, automobiles, electronics, soft drinks, fast food or services such as banking in urban areas.

 b) New jobs have been created in these sectors.

 c) Local companies supplying raw materials for these industries also prospered.

 c) Globalisation has also created new opportunities for companies providing services, particularly those involving IT, call centers.

 Globalisation also brought its negative impact in terms of:

 a) Smaller businesses were impacted badly as they lost their market share due to rising competition and cheaper products.

 b) Consumers started opting for cheaper products against quality products as technology upgardes become frequent and shelf life of products decreased.

 c) Unskilled labours turned job less as small scaled industries closed down.

 Q10: How has competition benefited people in India?

 Ans: Following are the ways by which Competition has benefited India :

 a) It has brought new technologies and improved service qualities in market.

 b) Competition has brought the cost of product down without compromising qualities of product.

 c) Competition has brought option to choose from wide range of products.

 d) It has removed monopoly from market.

 e) It has also forced local producers to upgrade their product qualities and services.

 Q11: Why do governments try to attract more foreign investment?

 Ans: Governments try to attract more foreign investment because:

 a) It creates more quality job opportunities to suitably qualified work force.

 b) They bring global business practices which helps improving practices locally.

 c) Government get additional revenue by taxing the profit of these investors.

 Q12: What is foreign investment ?

 Ans: The investment made by MNC’s in purchasing of land, building, machinery etc in order to set up business in foreign countries are called foreign investment.

 Q13: What is foreign trade ?

 Ans: Foreign trade s export and import of goods, raw material, etc between various countries.

 Q14: How is information technology connected with globalisation? Would  globalisation have been possible without expansion of IT?

 Ans: Information technology has brought faster mean of communication and connected all the offices in various countries together using Internet. The email services, supply and chain management services, data analytical services provided by information technology helps company make quicker decisions, stay connected with every unit round the clock, set up better post sales services and keep a closer look on company finances as data is quickly available and corrective action, if needed, can be deployed without delay.

 Q15: Write short notes on World Trade Organisation.

 Ans: World Trade Organisation (WTO) is an intergovernmental organization that regulates international trade. The WTO officially commenced on 1 January 1995. The WTO has 164 members as on 2016. WTO rules have forced the developing countries to remove trade barriers. The WTO deals with regulation of trade in goods, services and intellectual property between participating countries by providing a framework for negotiating trade agreements and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements, which are signed by representatives of member governments. Its headquarter is at Geneva, Switzerland.






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