CBSE Class 10 Social Science Economics Globalization and the Indian Economy Assignment Set A

Question : What is the key idea behind the process of globalisation ?
Answer : Integration of production and integration of markets is a key idea behind understanding the process of globalisation and its impact. 

Question : Which areas are suitable for MNCs to invest ?
Answer : Regions which provide cheap raw material, cheap quality labour, good infrastructure, proximity to markets and better governance policies are suitable areas for MNCs to invest. 

Question : Which are the sectors in which MNCs have shown interest to invest in ?
Answer : MNCs have been interested in industries such as cell phones, automobiles, electronics, soft drinks, fast food or services such as banking etc. 

Question : What is the most visible phenomenon in the present global economic environment?
Answer : Nations are getting interconnected with each other more rapidly through foreign trade and foreign investment. 

Question : The lives of workers is substantially changed because of the pressure of__________.
Answer : Competition and globalisation.

Question : Complete the following table :

Answer : (A)– To liberalise international trade
(B)– 164 Countries.

Question. Correct the following statement and rewrite it. International Monetary Fund (IMF) is an organisation whose aim is to liberalise international trade.
Answer : World Trade Organisation (WTO) is an organisation whose aim is to liberalise international trade.

Question. MNC is the company that owns or control _______.
Answer : Production in more than one nation.

Question. World Trade Organisation (WTO) is an organisation whose aims is ______.
Answer : to liberalise international trade.

Question. Correct the following statement and rewrite it. Removing barriers or restrictions by the government is known as globalisation.
Answer : Removing barriers or restrictions by the government is known as liberalisation.

Question. Removing trade barriers and tax restriction set up by the government is called as _________ .
Answer : liberalisation.

Question. What is the most visible phenomenon in the present global economic environment ?
Answer : Nations are getting interconnected with each other more rapidly through foreign trade and foreign investment.

Question. What are the ways in which an MNC can start operating in a country ?
Answer : An MNC can start operating in a country either by directly establishing its own factory or by acquiring some running factory or by the way of joint association or joint venture with some existing company.

Question. Why are the MNCs spreading their production to other countries ?
Answer : Expanded markets, lower cost, proximity to other markets are some of the reasons for MNCs spreading their production to other countries.

Question. What is the objective of WTO ?
                        OR
What was the main aim of World Trade Organisation?
Answer : The main aim of World Trade Organisation (WTO) is to liberalise international trade.

Question. Which areas are suitable for MNCs to invest ?
Answer : Regions which provide cheap raw material, cheap quality labour, good infrastructure, proximity to markets and better governance policies are suitable areas for MNCs to invest.

Question. When is money called an investment ?
Answer : The money that is spent to buy assets such as land, building, machines and other equipment is called investment.

Question. What is the basic function of foreign trade?
                             OR 
State the basic functions of foreign trade. 
Answer : Basic function of foreign trade is to connect the market of different countries.

Question. What is foreign investment ?
Answer : An investment made by MNCs is called foreign investment.

Question. Give example of an industry where number of small producers produce goods.
Answer : Garments/Footwear.

Question. The MNC’s of a country sets up a production jointly with the local company of other country. State any one benefit of this joint production to the local company.
Answer : Benefits of Joint Production: (i) MNC can provide money for additional investment. (ii) MNC might bring latest technology for production.

Question. What are the reasons for the movement of people from one to another country ?
Answer : People usually move from one country to another in search of better income, better jobs or better education.

Question. WTO stands for?
Answer : World Trade Organisation

Question. Which countries are location-wise useful for their closeness to the markets in the US and Europe?
Answer : China, Mexico and Eastern Europe.

Question. What is the full form of SEZ?
Answer : Special Economic Zone.

Question. What are the ways to interconnect countries ?
Answer : (i) Foreign trade,
(ii) Foreign investments, and
(iii) Movement of people.

Question. Suppose the Indian government puts a tax on import of a commodity. What would happen ?
Answer : Those who wish to import this commodity would have to pay tax on this. Because of the tax, buyers will have to pay a higher price on imported goods. This may lead to reduced demand for the commodity.

Question. When did the process of liberalisation started in India?
Answer : 1991.

Question. How can we identify that we are living in a globalised world ?
Answer : The latest models of digital cameras, mobile phones and televisions made by the leading manufacturers of the world are within our reach. This is an indicator of a globalised world.

Question. How can import of Chinese toys in India be reduced ?
Answer : The import of Chinese toys in India can be reduced by imposing import duty or tax on them. This way the toys will become costlier and their demand will fall.

Question. Which are the sectors in which MNCs have shown interest to invest in ?
Answer : MNCs have been interested in industries such as mobile phones, automobiles, electronics, soft drinks, fast food or services such as banking etc.

Question. What is meant by trade barrier ?
Answer : Trade barrier refers to the restriction imposed by the government to stop or reduce the export/import of the specified commodities.

Question. Why do MNCs set up their offices and factories in those regions where they get cheap labour and other resources ?
Answer : To minimise the cost of production and maximise profit earning, MNCs set up their offices and factories in region where they get cheap labour and other resources.

Question. What is Liberalisation ?
Answer : Liberalisation is the process of removing barriers or restrictions to trade and investment limits set by the government.

Question. Define globalisation.
Answer : Globalisation can be defined as the integration between countries through foreign trade and foreign investments by Multinational Corporations (MNCs).

Question. How many countries are the members of WTO ?
Answer : 165 countries.

Question. Give an example of trade barrier.
Answer : Tax on imports is an example of trade barrier.

Question. Name some of the Indian multinationals.
Answer : Videocon (Electronics), Tata Motors (automobiles),
Infosys (IT), Ranbaxy (medicines), Asian Paints (paints),
Sundaram Fasteners (nuts and bolts) etc.

Short Answer Type Questions  

Question : How have Indian companies benefited from globalisation ?
Answer : Following are some of the ways in which Indian companies have benefited :
(i) Globalisation has increased competition in the market. Many of the top Indian companies have taken benefit from the increased competition. They have invested in newer technologies and production methods and raised their production standards.
(ii) To take such benefits, many of the companies have made successful collaborations with foreign companies.
(iii) Globalisation has enabled some large Indian companies to emerge as multinationals. For example, Tata Motors (automobiles), Infosys (IT), Ranbaxy (medicines), Asian Paints (paints) etc.
(iv) Globalisation has also created new opportunities for companies providing services, particularly those dealing in IT. Business Process Outsourcing and call centres are some examples. Besides, a host of services such as data entry, accounting, administrative tasks, engineering are now being done cheaply in countries such as India and are exported to the developed countries.

Question : What are the impacts of foreign trade?
Answer : Following are some of the impacts of foreign trade:
(i) Foreign trade creates an opportunity for the producers to reach beyond the domestic markets, i.e., markets of their own countries. Producers can sell their produce not only in markets located within the country, but they can also compete in markets located in other countries of the world.
(ii) Similarly, for buyers, import of goods produced in another country expands their choice of goods beyond what is domestically produced. So, the choice of goods in the markets increases.
(iii) When the goods travel from one market to another, prices of similar goods in the two markets tend to become equal. Foreign trade thus results in connecting the markets or integration of markets in different countries.

Question. What are the impacts of foreign trade ?
Answer : Following are some of the impacts of foreign trade :
(i) Foreign trade creates an opportunity for the producers to reach beyond the domestic markets, i.e., markets of their own countries. Producers
can sell their produce not only in markets located within the country but can also compete in markets located in other countries of the world.
(ii) Similarly, for the buyers, import of goods produced in another country expands their choice of goods beyond what is domestically produced. So the choice of goods in the markets rises. 
(iii) When the goods travel from one market to another, prices of similar goods in the two markets tend to become equal. Foreign trade thus results in connecting the markets or integration of markets in different countries.

Question. Analyse any five positive effects of globalisation on the India economy.
Answer : The visible impacts of globalisation on the Indian economy can be described in following ways :
(i) There is a wide choice of goods and services in the markets.
(ii) The latest models of digital cameras, mobile phones, and television made by the leading manufacturers of the world are available in the markets. These products are affordable and within the reach of the people.
(iii) Several improvements in the transportation technology has made much faster the delivery of goods across long distances and that too on lower rates.
(iv) The improvement in information and telecommunication technology is even more remarkable. The invention and use of computers, internet, mobile phone, fax, etc, has made contact with each other around the world quite easy. 
(v) New jobs have been created in industries where MNCs have invested such as electronics, fast foods, cell phones etc.
(vi) Some Indian companies have become multinational themselves due to globalisation, such as Tata Motors (automobiles), Ranbaxy (medicines), Infosys (computer and information technology), L & T (construction).

Question. ‘‘Globalisation and greater competition among producers has been advantageous to consumers.’’ Support the statement with examples.
                                                                             OR
Describe any five advantages to consumers due to globalisation and greater competition among producers. 
                                                                             OR
‘‘Globalisation and greater competition among producers has been of advantage to consumers.‘‘ Justify the statement with examples.
Answer : Globalisation and greater competition among producers both local and foreign, has been of advantage to consumers in the following ways :
(i) Companies have invested in new technology to raise their production quality to compete with the MNCs, thus, ensuring that consumers get better quality products and be satisfied.
(ii) Indian companies have collaborated with MNCs to produce more functional and advanced products, thus, benefitting the consumers.
(iii) Consumer can enjoy improved quality at lower prices for several products. This has led to higher standard of living.
(iv) There is greater choice available to the consumers in goods.
(v) The quality of goods has been improved. (vi) Due to competition, the prices of various products has come down.

Question. 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 policies because developed countries view developing countries as the ideal source and destination for their purpose. Developed countries want their companies to setup their production facilities in developing countries due to availability of cheap raw material and cheap labour. In the same way, as destination, developed countries want to sell their products in developing countries because in most of the developing countries, the level of income is rising. So developed countries see possibility of higher profit and demand in the developing countries. The developing countries must ask for better reach of their products to the developed countries so that the indigenous industries may also prosper. They may also ask the developed countries for investment in the development of public goods so that the productive capacity of developing countries may also increase.

Question. How do multinational Corporations (MNCs) interlink their production across countries ? Explain with examples.
Answer : Multinational Corporations (MNCs) control their production across countries in various ways :
(i) MNC is a company that owns and control production in more than one nation. MNCs set up offices and factories for production in regions where they can get cheaper labour and other resources. This is done so that the cost of production is low and the MNCs can earn greater profits.
(ii) The MNC is not only selling its finished products globally, but more important, the goods and services are produced globally.
(iii) The production process is divided into small parts and spread out across the globe. In the above example, China provides the advantage of being a cheap manufacturing location.
(iv) The most common route for MNCs investments is to buy up local companies and then to expand production. For example, Cargill Foods, a very large American MNC bought over Indian company Parekh Foods which had their large marketing network in various parts of India and also a good reputation. With this advantage, Cargill has now become the largest producer of edible oil in India. 
(v) There is another way in which MNCs control production. Large MNCs in developed countries place order for production with small producers of cheaper countries. Garments, footwear, sport items come in this category and MNCs after quality check put their brand name on these items. 
(vi) As a result, production in these widely dispersed locations is getting interlinked.

Question. What is liberalisation ? Describe any four effects of liberalisation on the Indian economy.
Answer : The Indian Government has liberalized many barriers in foreign trade and foreign investment due to following reasons :
(i) The Indian government took on the basis of perception, membership of WTO, an international organisation.
(ii) It was thought that WTO would protect India from the pressures of stronger trading partners as WTO’s rules envisage non-discrimination inthe form of national treatment and most favoured nation (MFN) treatment to India’s exports in the market of other WTO members.
(iii) It was said that members would not discriminate tariff regimes among various WTO members as also would honour their respective rules, regulations and incentives etc.
(iv) However, in implementation, WTO agreements did just contrary to what was envisaged in its rules.

Question. Describe any five factors that promote the Multinational Corporations (MNCs) to setup their production units in a particular place.
Answer : Following are the various factors:
(i) MNCs establish their production facilities in such areas where they get cheap raw material.
(ii) MNCs establish their production facilities in such areas where they get cheap but quality labour.
(iii) MNCs always establish their production facility near to market which helps them to keep their transportation cost low.
(iv) MNCS establish production units in those areas where the availability of electricity is sufficient and predictable.
(v) MNCs establish the production facilities in those areas where there is rule of law and crime rate is very low.

Question. In recent years, how our markets have been transformed ? Explain with examples.
Answer : Transformation of markets in recent years :
(i) The advent of globalisation and the policy of liberalisation has opened the market to the world players. The economy of our country has rapidly grown with the onset of LPG i.e., Liberalisation, Privatisation and Globalisation reforms in 1991.
(ii) MNCs play a vital role in the world market and as a result foreign trade and investment in the country has increased. MNCs are playing a major role in the market by introducing exchange of technology between countries.
(iii) Foreign trade affects the integration of domestic markets in different countries.
(iv) Globalisation has also created new opportunities for companies providing services, particularly those dealing in IT.
(v) Better job opportunities for people have given rise to migration.
(vi) Also globalisation has enabled some large Indian companies to emerge as multinationals themselves. Tata Motors (automobiles), Infosys (IT), Ranbaxy (medicines) are some Indian companies which are spreading their operations worldwide

Question. What factors have enabled globalisation ?
Answer : Following are the various factors that have promoted globalisation :
(i) Technology : Rapid improvement in technology has been one major factor that has stimulated the globalisation process. For instance, in the past seven decades, we have seen several improvements in transportation and communication technology.
This has led to much faster delivery of goods across long distances at lower costs. Similarly, communication facilities (telegraph, telephone including mobile phones, fax) have changed the pace of information sharing. It has also changed the way of doing business.
(ii) Liberalisation policies : Starting around 1991, the Indian government had the realisation that in order to improve the functioning of the Indian economy, the time had come for Indian producers to compete with producers around the globe. It felt that competition would improve the performance of producers within the country since they wo uld have to improve their quality. Thus, barrierson foreign trade and foreign investment were removed to a large extent and foreign trade and investments were liberalised.
(iii) World Trade Organisation : The liberalisatio n of foreign trade and investment in India wassupported by some very powerful international organisations. These organisations were of the view that all barriers to foreign trade and investment are harmful and they supported free trade. World Trade Organisation (WTO) was onesuch organisation which supported free trade and investment in the country.

Question. How can globalisation be an integrating force ?
Answer : Globalisation is an integrating force that integrates the economies of the nations. This integration takes place through foreign trade, foreign investment and movement of people. Foreign trade creates an opportunity for the producers to reach beyond the domestic markets. The producers can sell their produce not only in markets located within the country but can also compete in markets located in other countries of the world. When the goods travel from one market to another, prices of similar goods in the two markets tend to become equal. Foreign trade thus results in connecting the markets or integration of markets in different countries. Similarly, for the buyers, import of goods produced in another country expands their choice of goods beyond what is domestically produced. So the choice of goods in the markets rises. This has also raised their standard of consumption at par with their counterparts in other countries. Foreign investments through MNCs play a major role in the integration process. More and more goods and services, investments and technology are moving between countries. This has led to the profitability of MNCs getting affected by their performance in other countries. There is one more way in which the countries are getting connected. This is through the movement of people between countries who move from one country to another in search of better income, better jobs or better education. This leads to the sharing of culture between the people.

Question. Why do you think that the Chinese toys are more popular in Indian market ? What would happen if Indian government impose heavy import duties on Chinese toys ?
Answer : Chinese toys are more popular in Indian markets because they are cheaper in comparison to Indian toys. Other reasons for Chinese toys’ popularity are their better make and design. Now almost all the toy shops are selling Chinese toys in large numbers. It seems that Chinese toys have almost replaced the Indian toys. This is a very serious situation for Indian toys manufacturers in terms of their income and employment. If the Indian government imposes heavy import duty on Chinese toys, it will increase their cost and hence the prices in the Indian market. This will decrease their demand in the market. This will lead to more demand of Indian toys and fall in the imports of Chinese toys. This will happen only when their prices become higher than the prices of Indian toys due to import duties. So if even after imposing the import duty, the Chinese products remain cheaper in comparison to Indian toys than their imports will not fall.

Question. Explain in what ways has competition affected workers, Indian exporters and foreign MNCs in the garment industry?
Answer : Competition has affected workers, Indian exporters and foreign MNCs in the garment industry in a very significant manner in the following ways:
Workers:
(i) The workers in the garment industry feel insecure as far as their jobs are concerned. Most of them work on temporary basis.
(ii) They work on very less wages without any social security.
(iii) They have to work for undue longer hours.
Indian exporters:
(i) They get orders from MNCs at lower price.
(ii) They are working as outsourcing firms.
(iii) They cannot compete with international brands on global level.
Foreign MNCs:
(i) Global brands have entered the Indian market.
(ii) They have secured a large market share from domestic producers.
(iii) They are making huge profits in Indian market.

Question. What policy decisions were taken by the Indian government in 1991 ?
Answer : Starting around 1991, the Indian government had the realisation that in order to improve the functioning of the Indian economy, the time had come for Indian producers to compete with producers around the globe. It felt that competition would improve the performance of producers within the country since they would have to improve their quality. This decision was supported by powerful international organisations like IMF and WTO. Thus, barriers on foreign trade and foreign investment were removed to a large extent. This means that goods could be imported and exported easily and also foreign companies could set up factories and offices here.

Question. ‘‘The impact of globalisation has not been uniform.” Explain with examples.
Answer : The impact of globalisation has not been uniform because :
(i) Globalisation has been beneficial only for developed countries. It had a bad impact on the underdeveloped and developing countries.
(ii) Developed countries took resources from underdeveloped countries at cheap rate and exported costly finished products to underdeveloped countries.
(iii) The developed countries are rich in machinery and finance. They exploits resources of the underdeveloped countries.
(iv) Competition from companies in developed countries also cripple industries of underdeveloped and developing countries.
(v) Small manufacturers have been hard hit due to globalisation.
(vi) Many illiterate and poor people lost their jobs due to closure of small units.

Source/Case Based Questions 

Question : Answer the following questions on the basis of data: 

"The advent of globalisation and the policy of liberalization have opened the market to the world players. It has given rise to wide choice of goods and services to the consumer. MNCs have played a vital role in the world market. Foreign trade and investment in the country has increased. It has also resulted in exchange of technology between countries. In recent times, technology in the areas of telecommunications, computers and internet has been changing rapidly. Globalisation has also created new opportunities for companies providing services, particularly those involving in IT. Better job opportunities for people have given rise to migration. Globalisation has also enabled some large Indian companies to emerge as multinationals For example, Tata Motors, Infosys, Ranbaxy have expanded their operations around the world." 

(i) ______has been a major force in the globalisation process connecting distant regions of the world.
(a) Traders
(b) International companies
(c) Multinational corporations
(d) Businesses houses
Answer : (c) Multinational corporations 

(ii) What is a multinational corporation (MNC)?
(a) A corporation that conducts international trade.
(b) A corporation that manufactures goods for other countries.
(c) A company that owns or controls production in more than one nation.
(d) None of the above
Answer : (c) A company that owns or controls production in more than one nation. 

(iii) Globalisation has created new opportunities for those companies which are involved in:
(a) Manufacturing
(b) IT
(c) Food business
(d) None of these
Answer : (b) IT 

(iv) Assertion : The advent of globalisation and the policy of liberalization have opened the market to the world players.
Reason : Globalisation has also enabled some large Indian companies to emerge as multinationals.
Options :
(a) Both A and R are true and R is the correct explanation of A.
(b) Both A and R are true but R is not the correct explanation of A.
(c) A is true but R is false.
(d) A is false but R is true.
Answer : (a) Both A and R are true and R is the correct explanation of A. 

(v) Which Indian Company has emerged as a MNC?
(a) Mahindra & Mahindra
(b) Tata Motors
(c) Renault
(d) Maruti Suzuki
Answer : (b) Tata Motors

Question : Read the source given below and answer the following questions—

In recent years, the central and state governments in India are taking special steps to attract foreign companies to invest in India. Industrial zones, called Special Economic Zones (SEZs), are being set up. SEZs are to have world class facilities: electricity, water, roads, transport, storage, recreational and educational facilities. Companies who set up production units in the SEZs do not have to pay taxes for an initial period of five years. Government has also allowed flexibility in the labour laws to attract foreign investment. The companies in the organised sector have to obey certain rules that aim to protect the workers' rights. Instead of hiring workers on a regular basis, 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.

Answer the following MCQs by choosing the most appropriate option:

(i) The passage given above relates to which of the following options?
(a) Labour laws and global investment
(b) India's preparedness to lure investment
(c) Impact of globalization
(d) Steps to attract foreign investment in India
Answer : (d) Steps to attract foreign investment in India.

(ii) By setting up more SEZs, the government wants to : 
(a) reduce taxes
(b) ensure equality in public and private sector.
(c) develop infrastructure
(d) make flexible labour laws
Answer : (c) develop infrastructure.

(iii) Which of the following is not a characteristic of SEZs?
(a) Better infrastructure
(b) Focus on attracting foreign investment.
(c) Tax relaxation for initial period of seven years
(d) Flexibility in labour laws.
Answer : (c) Tax relaxation for initial period of seven years

(iv) Instead of hiring workers on a regular basis,companies hire workers ‘flexibly’ for short periods when there is intense pressure of work is an evidence of -
(a) Cost reduction
(b) Globalisation
(c) Extreme competition
(d) Developed SEZ
Answer : (a) Cost reduction.