Globalisation and the Indian Economy Important Questions and Answers

JAC Class 10 Social Science Important Questions Economics Chapter 4 Globalisation and the Indian Economy

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JAC Board Class 10th Social Science Important Questions Economics Chapter 4 Globalisation and the Indian Economy

Multiple Choice Questions

Question 1.
What is an MNC?
(a) a company that controls production in more than one nation
(b) a company that controls production in more than one State in a country
(c) a company that controls production in more than one district of a State in a country
(d) a company that controls production in more than one village of a State in a country
Answer:
(a) a company that controls production in more than one nation

Question 2.
The finished products are sold by MNCs
(a) only in US and UK
(b) only in US
(c) globally
(d) only in China
Answer:
(c) globally

Question 3.
The goods and services are produced globally by
(a) China
(b) Mexico and Eastern Europe
(c) US and UK
(d) MNCs
Answer:
(d) MNCs

Question 4.
The money that is spent to buy assets, such as land, buildings, machines and other equipment is called
(a) marketing
(b) investment
(c) globalisation
(d) foreign trade
Answer:
(b) investment

Question 5.
Investment made by MNCs is called
(a) production
(b) liberalisation
(c) foreign investment
(d) foreign trade
Answer:
(c) foreign investment

Question 6.
Which large American MNC has bought smaller Indian companies, such as Parakh foods?
(a) Cargill Foods
(b) Burger King
(c) Baskin Robbins
(d) Costa Coffee
Answer:
(a) Cargill Foods

Question 7.
Which is the largest producer of edible oil in India, with a capacity to make 5 million pouches daily?
(a) Agro Tech Foods Limited
(b) Gujarat Ambuja Exports
(c) Adani Wilmar Limited
(d) Cargill
Answer:
(d) Cargill

Question 8.
Which American company is one of the world’s largest automobile manufacturers with production spread over 26 countries of the world?
(a) General Motors
(b) Ford Motors
(c) Fiat Chrysler Automobiles
(d) Tesla Motors
Answer:
(b) Ford Motors

Question 9.
What creates an opportunity for the producers to reach beyond the domestic markets?
(a) Investment
(b) Liberalisation
(c) Advertising
(d) Foreign trade
Answer:
(d) Foreign trade

Question 10.
A large part of the foreign trade is also controlled by whom?
(a) Moneylenders
(b) Communication technology
(c) MNCs
(d) Municipalities
Answer:
(c) MNCs

Very Short Answer Type Questions

Question 1.
What is globalisation?
Answer:
Globalisation is defined as the integration between countries through foreign trade and foreign investments by multinational corporations (MNCs).

Question 2.
Where are MNCs set up and why?
Answer:
MNCs have 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 MNCs can earn greater profits.

Question 3.
Why is Mexico and Eastern Europe useful for MNCs?
Answer:
Mexico and Eastern Europe are useful for their closeness to the markets in the US and Europe.

Question 4.
How has India attracted the MNCs?
Answer:
India has highly skilled engineers who can understand the aspects of production. It also has educated English speaking youth wjio can provide customer care services.

Question 5.
Define foreign investment. What is the most common route for MNC investments?
Answer:
Investment made by MNCs is called foreign investment. The most common route for MNC investments is to buy local companies and then to expand production.

Question 6.
With which company did Ford Motors collaborate within India to set up a large plant in Chennai?
Answer:
Ford Motors, an American company and one of the world’s largest automobile manufacturers collaborated with Mahindra and Mahindra, a major Indian manufacturer of jeeps and trucks.

Question 7.
What is liberalisation?
Answer:
Removing trade barriers or trade •restrictions set by the government is known as liberalisation.

Question 8.
Write the aim of World Trade Organisation.
Answer:
The aim of World Trade Organisation is to liberalise international trade.

Question 9.
How has globalisation benefited the well-off sections in the urban areas?
Answer:
There is a greater choice before the well – off sections in the urban areas. They enjoy improved quality and lower prices for several products. They enjoy higher standards of living than was possible earlier.

Question 10.
Mention the facilities enjoyed by Special Economic Zones (SEZs).
Answer:
Special Economic Zones (SEZs) have world class facilities: electricity, water, roads, transport, storage, recreational and educational facilities. Companies which set up production units in the SEZs do not have to pay taxes for an initial period of five years.

Short Answer Type Questions

Question 1.
Discuss the factors that the MNCs look into when setting up a production plant in a particular location.
Answer:
MNCs have set up production where it is close to the markets where there is skilled and unskilled labour available at low costs  and where the availability of other factors of production is assured. In addition, MNCs might look for government policies that look after their interests. MNCs 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 MNCs can earn greater profits.

Question 2.
Discuss the two-fold benefits of a local company when it sets up production jointly with an MNC.
Answer:
Sometimes, an MNC sets up production jointly with some of the local companies of a country. First, MNCs can provide money for additional investments, such as buying new machines for faster production. Secondly, MNCs might bring with them the latest technology for production.

Question 3.
The most common route for MNC investment is to buy up local companies and then to expand production. Explain it through the example of Cargill Foods.
Answer:

  1. Cargill Foods, a very large American MNC, has bought smaller Indian companies such as Parakh Foods.
  2. 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.
  3. Cargill is now the largest producer of edible oil in India, with a capacity to make 5 million pouches daily.

Question 4.
Besides MNCs buying up local companies, what is another way in which they control production?
Answer:

  1. Large MNCs in developed countries place orders for production with small producers.
  2. Garments, footwear, sports wear are examples of industries where production is carried out by a large number of small producers around the world.
  3. The products are supplied to MNCs, who then sell these under their o\yn brand names to the customers.
  4. These large MNCs have tremendous power to determine price, quality, delivery, and labour conditions for these distant producers.

Question 5.
How has production by MNCs across the globe in diverse locations got linked?’
Answer:
There are a variety of ways in which MNCs are spreading their production and interacting with local producers in various countries across the globe:

  1. By setting up partnerships with local companies, by using the local companies for supplies, by closely competing with the local companies or buying them up,
  2. MNCs are exerting a strong influence on production at these distant locations.
  3. As a result, production in these widely dispersed locations is getting interlinked.

Question 6.
Describe the problems faced by the workers because of globalisation and liberalisation.
Answer:

  1. For a large number of small producers and workers, globalisation has posed major challenges. Batteries, plastics, toys, vegetable oil, etc., are some examples of industries where the small manufacturers have been hit hard because of competition.
  2. Several of the units have shut down rendering many workers jobless.
  3. Globalisation and the pressure of competition have substantially changed the lives of workers. Most workers prefer to employ workers ‘flexibly’. Therefore, workers jobs are no longer secure.
  4. In most factories workers have to put in long hours and work night shifts on a regular basis during the peak season.

Question 7.
Why did the government introduce trade barriers after Independence?
Answer:
All developed countries, during the early stages of development, gave protection to domestic producers through a variety of means. The Indian government, after Independence, had put barriers to foreign trade and foreign investment. It was considered essential to protect the producers within the country from foreign competition. 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. Thus, India allowed imports of only essential items, such as machinery, fertilisers, petroleum, etc.

Question 8.
How has telecommunications stimulated the globalisation process?
Answer:

  1. Telecommunication facilities are used to contact one another around the world, to access information instantly, and to communicate from remote areas.
  2. Computers have now entered almost every field of activity.
  3. From the Internet, one may obtain and share information on almost anything one may want to know.
  4. It enables one to send instant e – mail and talk across the world at negligible costs. It has played a major role in spreading out production of services across countries.
  5. For example, a news magazine published for London readers may be designed and printed in an office in Delhi. After completion and submission of their work, they are paid by London office through Internet banking.

Question 9.
“Globalisation and competition among producers has been of advantage to the Cnsumers.” Give arguments in support of this statement.
Answer:
The following arguments support the given statement:

  1. There is greater choice available to the consumers in goods.
  2. The quality of goods has been improved.
  3. Prices of goods are lower.
  4. Consumers are now able to enjoy a better life.

Long Answer Type Questions

Question 1.
Explain how markets have transformed in the recent years with examples.
Answer:

  1. Until the middle of the twentieth ‘ century, production was largely organised within countries. What crossed the boundaries of these countries were raw materials, food stuff and finished products. Trade, was the main channel connecting distant countries.
  2. With the emergence of multinational corporations (MNCs), there has been a spread in production and interaction with local producers. Foreign trade has interlinked the markets.
  3. The producers are selling their produce not only in the domestic market but also in the markets located in other countries.
  4. Choices of goods in the markets have risen. With technology and liberalisation, the service sector has also grown.
  5. MNCs hire workers from developing countries to provide services to them at low rate.
  6. For example, the BPOs and KPOs employ thousands of young people to serve the multinational corporations.

Question 2.
The advantage of spreading out production across the borders to the multinationals can be truly immense. Justify.
Answer:
1. MNCs are not only selling their products globally but are also producing their goods globally.

2. The production process is divided into small parts and spread out across the globe.

3. For example, China provides the advantage of being a cheap manufacturing location. Mexico and Eastern Europe are useful for their closeness to the markets in the US and Europe. India has highly skilled engineers who can understand the technical aspects of production. The country has educated English speaking youth who can provide customer care services. This means 50 – 60 per cent cost savings for the MNC. Therefore, the advantage of spreading out production across the borders to the multinationals can be truly immense.

Question 3.
Discuss liberalisation of foreign trade.
Answer:

  1. Removing trade barriers or trade restrictions set by the government is known as liberalisation.
  2. The Indian government had initially introduced trade barriers after Independence to support the Indian producers from foreign competition.
  3. But in 1991, some far-reaching changes in policy were made in India. The government thought it was time for the producers to compete with foreign producers.
  4. It was felt that competition would improve the performance of producers within the country as they would have to improve the quality of the products.
  5. Barriers on foreign trade were lifted to a large extent. Goods could be imported and exported easily and also foreign companies could set up factories and offices in India.
  6. With liberalisation of trade, businesses were allowed to make decisions freely about what they wished to export or import.
  7. The government imposed much less restrictions than before and was therefore said to be more liberal.

Question 4.
What steps are the Central and State governments taking to attract foreign investment?
Answer:
The Central and State governments in India are taking special steps to attract foreign companies to invest in India:

  1. Industrial Zones, called Special Economic Zones (SEZs), are being set up.
  2. SEZs are to have world class facilities: electricity, water, roads, transport, storage, and recreational and educational facilities. Companies which set up production units in the SEZs do not have to pay taxes for an initial period of five years.
  3. Government has also allowed flexibility in the labour laws to attract foreign investment. It has allowed companies to ignofie many rules that aim to protect workers’ rights.
  4. The companies instead of hiring regular employees, can hire workers ‘flexibly’ for short periods when there is intense pressure of work and can be laid off later when there is less work. This reduces the cost of labour for the company.

Question 5.
How can government play a major role in creating a fair globalisation?
Answer:
Government can play a major role in creating a fair globalisation that would create opportunities for all, and also ensure that the benefits of globalisation are shared better.

  1. The policies of the government must protect the interests of not only the rich and the powerful, but all the people in the country.
  2. It needs to ensure that the labour laws are properly implemented and the workers get their rights.
  3. It can support small producers to improve their performance till they become strong enough to compete.
  4. If necessary, government can use trade and investment barriers.
  5. It can negotiate at the WTO for ‘fairer rules’.
  6. It can also align with other developing countries with similar interests to fight against the domination of developed countries in the WTO.

Activity Based Questions

Question 1.
Write one word answer for the following:
(a) It is a company that owns or controls production in more than one nation.
(b) It is the money that is spent to buy assets such as land, building, machines and other equipment.
(c) It is the investment made by MNCs.
(d) It is the process of rapid integration or interconnection between countries.
(e) It is the removing of trade barriers or trade restrictions set by the government.
Answer:
(a) MNC
(b) Investment
(c) Foreign investment
(d) Globalisation
(e) Liberalisation
(e) Liberalisation

Question 2.
Picture – study Study the picture carefully and answer the following questions:
JAC Class 10 Social Science Important Questions Economics Chapter 4 Globalisation and the Indian Economy 1
(a) Identity the sector of the organisation.
Answer:
This is a call centre or a BPO, equipped with telecom facilities and access to the Internet.

(b) What is the work of the people in this sector?
Answer:
In this sector, people are employed to provide information and support to customers abroad.

(c) In which countries is this sector found, and why?
Answer:
BPO or call centres are mainly found in developing countries. These employ huge number of young employees to work at low wages with long working hours. The workers are also required to work night shifts.

JAC Class 10 Social Science Important Questions