CBSE Class 10 Social Science Globalisation and Indian Economy Important Questions

Question. “Globalisation and greater competition among producers has been advantageous to consumers.” Support the statement with examples.
Answer : Yes, it is true to say that the Globalisation and greater competition among producers has been advantageous to consumers because: Consumers: a. They get different brands of the product. b. They get the goods and services at cheaper rate. c. They get better quality products.

Question. How has transportation technology stimulated the globalisation process-? Explain with suitable examples.
Answer : Development in technology is one of the most important factor that has enabled the process of globalization. Developments in transport technology: the world has done tremendous improvements in the field of transportation technology. Now we have different fastest means of transport with the help of which we can reach to different parts of the world in less time and can control trade and integrate the markets easily.

Question. Explain how globalisation can be made fairer.
Answer : The government can play the following roles to make the globalisation fairer: a. Government policies should protect both rich and the poor. b. Labour laws should be implemented properly and the workers get equal rights. c. Government should support the small producers so that they can improve their performance and compete. d. Government should use trade barriers if required. e. Government should negotiate the WTO for fairer rules. f. All the developing countries government should group together to fight against the developed countries at WTO. g. Governments can campaign and protest regarding the unfair rules.

Question. Explain any four ways in which globalisation and pressure of competition has changed the lives of workers substantially.
Answer : The four ways in which globalisation and pressure of competition has changed the lives of workers substantially are:
a. MNCs helped in reducing the unemployment in India.
b. It provided job opportunities to the people.
c. It helped in improving the standard of living of the workers.
d. It has given opportunity to the workers to move out from the primary sector and helped in their economic growth.

Question. “Information and communication technology has played a major role in spreading out products and services across countries.” Support the statement.
Answer : It is true to say that Information and communication technology has played a major role in spreading out products and services across countries. Developments in ICT (Information and Communication Technology): It includes telephones, mobile phones, computers, internet, fax, e-mails etc.
a remarkable development can be seen in the field of ICT throughout the world. Now the world is just a click away. With the help of ICT we can share and obtain information instantly across the globe at negligible cost.

Question. Explain the role of government in making globalisation fair.
Answer : The government can play the following roles to make the globalisation fairer: a. Government policies should protect both rich and the poor. b. Labour laws should be implemented properly and the workers get equal rights. c. Government should support the small producers so that they can improve their performance and compete. d. Government should use trade barriers if required. e. Government should negotiate at the WTO for fairer rules. f. All the developing countries government should group together to fight against the developed countries at WTO. g. Governments can campaign and protest regarding the unfair rules.

Question. What is globalisation? Describe the role of MNCs in promoting globalisation process.
Answer : Globalisation can be defined as the process of rapid interconnection or integration between the markets. MNCs play a vital role in promoting globalisation process as: By producing Goods and services at global level. a. Goods and services and sold at global level. Investments, technology and people are moving between countries. b. It gives opportunity to the local producers to reach beyond the domestic market. c. MNCs by the foreign trade connects/ integrates the markets in the world.

Question. How do large companies manipulate the market? Explain with examples.
Answer : It is very true to say that the large companies often manipulate the markets. They do this by influencing the price of the products, labour and the market conditions. They are able to do this because they have huge wealth, low cost of production, and better technology. For example, Chinese products in the Indian markets. Due to the low prices of the Chinese products in the Indian market they are able to expand their market in India. They have good number of buyers as they sell the products at cheap rate.

Question. “Technology has stimulated the globalisation process.” Support the statement with examples. or “Information and Communication Technology has played a major role in spreading our production of services across countries”. Justify the statement with examples. or How has Information and Technology stimulated globalisation process? Explain with examples.
Answer : It is true to say that the Information and Communication Technology has played a major role in spreading our production of services across countries. Development in technology is one of the most important factors that has enabled the process of globalization.
It can be studied under two different headings:
a. Developments in transport technology: The world has done tremendous improvements in the field of transportation technology. Now we have different fastest means of transport with the help of which we can reach to different parts of the world in less time and can control trade and integrate the markets easily.
b. Developments in ICT (Information and Communication Technology): It includes telephones, mobile phones, computers, internet, fax, e-mails etc. A remarkable development can be seen in the field of ICT throughout the world. Now the world is just a click away. With the help of ICT we can share and obtain information instantly across the globe at negligible cost.

Question. What is the meaning of SEZ? Mention any two features of SEZ.
Answer : SEZ means special economic zone. The two features of SEZ are: a. Governments are creating SEZs where they provide world class facilities for electricity, roads, water, transport, recreational and educational facilities to the MNCs. b. MNCs will not have to pay taxes for the initial period of five years if they set up their production units in the SEZs.

Question. How do large companies often manipulate the markets? Explain with an example.
Answer : It is very true to say that the large companies often manipulate the markets. They do this by influencing the price of the products, labour and the market conditions. They are able to do this because they have huge wealth, low cost of production, and better technology. For example, Chinese products in the Indian markets. Due to the low prices of the Chinese products in the Indian market they are able to expand their market in India. They have good number of buyers as they sell the products at cheap rate.

Question. Give the meaning of WTO. Mention any two shortcomings of WTO.
Answer : WTO means World Trade Organisation. The two shortcomings of the WTO are: a. WTO is not able to check the rules made for the free and fair international trade. b. In practice it can be seen that developing countries follow these rules whereas the developed countries have not liberalized their trade policies.

Question. Explain any three advantages of globalisation.
Answer : The three advantages of globalisation are: a. The producers are getting an opportunity to reach beyond the domestic market. b. The workers are getting more job opportunities. c. The consumers are getting variety of brands with quality and cheaper prices.

Question. What is a trade barrier? Why did the Indian government put trade barriers after independence? Explain.
Answer : Restrictions set by the government to increase or decrease (regulate) the foreign trade is what called trade barrier. Due to the following reasons the Indian government put barriers to foreign trade and foreign investment after independence: a. The Indian government wanted the domestic producers to face the global competition. b. By this competition the Indian producers will also get a chance to improve their quality. c. Removal of trade barriers will allow the producers of different countries to trade with India.

Question. Explain with three examples how top Indian companies have benefitted from globalisation?
Answer : It is true to say that the top Indian companies have benefitted from globalisation. The three examples are: a. The top Indian companies are benefitted from the competition. b. The top Indian companies invested in the newer technologies and production methods and thus increased their production tremendously. c. Some of the top Indian companies like the Tata Motors and Infosys have spread their unit worldwide.

FIVE MARKS QUESTIONS

Question. How has foreign trade been integrating markets of different countries? Explain with examples.
Answer : Foreign trade means trade with other countries. When we trade with other countries then we connect with the markets of different countries. For example, Chinese toys in the Indian market. In this process the goods and services and produced and sold at global level. There is movement of technology and people between the countries. It gives opportunity to the local producers to reach beyond the domestic market. Buyers get different choice, price and quality. An MNC from USA producing the industrial equipment is designing its product in the research, centres of the US, its components are manufactured in china, the assembling and the export work is done from Mexico and Eastern Europe and its call centres are there is India.

Question. How do we feel the impact of globalization on our daily life? Explain with examples. 
Answer : This is true to say that now there is wide ranging choice of goods available in the Indian markets. It is possible due to the policy of liberalisation, privatization and globalisation followed by India since 1991. Before 1990, we had limited brands and limited variety of products in the market but now the market is flooded with variety of brands. For example, earlier we had just Ambassador and Fiat cars on the Indian roads but now we have so many brands from all over the world,. The same happened in the field of T.V, mobile phones, garments etc.

Question. How has globalisation benefitted India? Explain with five examples.
Answer :  The process of globalisation has benefitted India in the following ways: Consumers: a. They get different brands of the product. b. They get the goods and services at cheaper rate. c. They get better quality products. Producers: a. The local producers joining hands with MNCs get a chance to expand their business. b. They get the newer technology from the MNCs. c. They get the investment done by MNCs in their companies. Workers: a. MNCs helped in reducing the unemployment in India. b. It provided job opportunities to the people, (c) It helped in improving the standard of living of the workers.

Question. How is the government of India trying to attract more foreign investment? Explain with examples.
Answer : The government of India trying to attract more foreign investment through the following ways: a. SEZ (Special Economic Zone): Governments are creating SEZs where they provide world class facilities for electricity, roads, water, transport, recreational and educational facilities. MNCs will not have to pay taxes for the initial period of five years if they set up their production units in the SEZs. b. Flexibility in Labour Laws: Governments has given the permission to the MNCs to hire the workers flexibly i.e., hiring the workers on temporary basis and also ignoring the labour laws. This will help the MNCs in reducing their labour cost and the total cost of production.

Question. Describe the contribution of technology in promoting the process of globalization. ( or How has improvement in technology stimulated the globalisation process? Explain. or Explain the role of technology in stimulating globalisation process.
Answer : It is true to say that the Information and Communication Technology has stimulated the globalisation process and played a major role in spreading our production of services across countries. Technological development: development in technology is one of the most important factor that has enabled the process of globalization. It can be studied under two different headings: a. Developments in transport technology: The world has done tremendous improvements in the field of transportation technology. Now we have different fastest means of transport with the help of which we can reach to different parts of the world in less time and can control trade and integrate the markets easily. b. Developments in ICT (Information and Communication Technology): It includes telephones, mobile phones, computers, internet, fax, e-mails etc. A remarkable development can be seen in the field of ICT throughout the world. Now the world is just a click away. With the help of ICT we can share and obtain information instantly across the globe at negligible cost.

Question. Explain by giving examples how multinational corporations are spreading their products in different ways. or How are multinational corporations spreading their products? Explain with examples.
Answer : The following are the three ways in which multinational corporations are spreading their products in different ways: a. Buying up the local companies: This is most common route for MNC investment and expanding production. MNCs can do so because they have huge wealth. For example: Cargill Foods an American MNC has bought Indian company named Parakh Food. Now the control on the large marketing network and the four oil refineries has shifted to the Cargill Food. Cargill Food has now become the largest producer of edible oil in India. b. Joining hand with local companies: Sometimes the MNCs join hands with the local companies and do the production. In this process, the local companies get twin benefits: (i) they get foreign investment and («) MNCs provide newer technology to them for the production. For example: In 1995, Ford Motors an American company joined hand with the Indian company called Mahindra and Mahindra (manufacturer of jeeps and trucks). c. By placing orders: Sometimes MNCs just place orders with small producers around the world for the production of garments, footwear and sports items. After that, the products are supplied to the MNCs and sold under the brand name of the MNCs.

Question. Define ‘Globalisation’. Describe any four benefits of globalisation to the Indian economy.
Answer : Globalisation can be defined as the process of rapid interconnection or integration between the markets.
The four benefits of globalization to the Indian economy are:
a. Producers: The big producers who join hands with the MNCs are getting the profit and expanded their, business across the globe.
b. Workers: MNCs helped in reducing the unemployment in India.
c. Buyers: The buyers are getting variety of brands with quality at cheaper rates.
d. The Indian producers are getting an opportunity to reach beyond the domestic market.
e. The Indian producers got foreign invest¬ment and newer technologies from the MNCs.

Question. Describe any three ways by which multinational companies are spreading their products across the world.
Answer : The following are the three ways in which multinational corporations are spreading their products in different ways a. Buying up the local companies: This is most common route for MNC investment and expanding production. MNCs can do so because they have huge wealth. For example: Cargill foods an American MNC has bought Indian company named Parakh Food. Now the control on the large marketing network and the four oil refineries has shifted to the Cargill Food. Cargill Food has now become the largest producer of edible oil in India. b. Joining hand with local companies: Sometimes the MNCs join hands with the local companies and do the production. In this process, the local companies get twin benefits: a) they get foreign investment and b) MNCs provide newer technology to them for the production. For example: In 1995 Ford Motors an American company joining hand with the Indian company called Mahindra and Mahindra (manufacturer of jeeps and trucks). c. By placing orders: Sometimes MNCs just place orders with small producers around the world for the production of garments, footwear and sports items. After that, the products are supplied to the MNCs and sold under the brand name of the MNCs.

Question. Explain any three ways by which MNCs exercise control on production.
Answer : The following are the three ways in which multinational corporations are spreading their products in different ways a.
Buying up the Local Companies: This is most common route for MNC investment and expanding production. MNCs can do so because they have huge wealth.
For example: Cargill Foods an American MNC has bought Indian company named Parakh Food. Now the control on the large marketing network and the four oil refineries has shifted to the Cargill Food. Cargill Food has now become the largest producer of edible oil in India.
b. Joining hand with local companies: Sometimes the MNCs join hands with the local companies and do the production. In this process, the local companies get twin benefits: (t) they get foreign investment and (ii) MNCs provide newer technology to them for the production. For example: In 1995 Ford Motors an American company joined hand with the Indian company called Mahindra and Mahindra (manufacturer of jeeps and trucks).
c. By placing orders: Sometimes MNCs just place orders with small producers around the world for the production of garments, footwear and sports items. After that, the products are supplied to the MNCs and sold under the brand name of the MNCs,

Question. How is foreign trade interconnecting the markets in different countries? Explain with examples.
Answer : Foreign trade means trade with other . countries. When we trade with other countries then we connect with the markets of different countries. For example, Chinese toys in the Indian market. In this process the goods and services and produced and sold at global level. There is movement of technology and people between the countries. It gives opportunity to the local producers to reach beyond the domestic market. Buyers get different choice, price and quality. An MNC from USA producing the industrial equipment is designing its product in the research centres of the US, its components are manufactured in China, the assembling and the export work is done from Mexico and Eastern Europe and its call centres are there is India.

Question. Describe the impact of globalisation on Indian economy with examples.
Answer : The impact of globalization on the Indian economy can be noticed both as positive and negative. These are:
Positive impact
: a. Producers: The big producers who join hands with the MNCs are getting the profit and expanded their business across the globe.
b. Workers: MNCs helped in reducing the unemployment in India.
c. Buyers: The buyers are getting variety of brands with quality at cheaper rates.
d. The Indian producers are getting an opportunity to reach beyond the domestic market.
e. The Indian producers got foreign investment and newer technologies from the MNCs.
Negative impact:
a. The local small producers are not able to compete with the MNCs and they have to shut down their business.
b. Mostly MNCs produce goods and services for the rich people so the poor people are not able to enjoy the benefits of globalisation much.
c. Due to the globalisation the MNCs don’t hire the workers on permanent basis. They use flexibility in labour law policy.

Question. Describe any five factors that promote the MNCs to set up their production units in a particular place.
Answer : The five factors that promote the MNCs to set up their production units in a particular place are:
a. They set up their production units where there is easy availability of cheap and skilled labour.
b. They look for the locations from the markets are close so that they will have to pay less transportation cost in supplying the final goods to the consumers.
c. They set up their business in the countries where the government policies are favourable for them. Such as in India the Indian government has given them the benefit of flexibility in labour laws. d. MNCs set up their units where they get easy availability of raw materials. e. They start their offices and get world class facilities like education, health and concession on tax.

Question. Describe the major problems created by the globalisation for a large number of small producers and workers.
Answer : The major problems created by the globalisation for a large number of small producers and workers are: Small producers: The local small producers are not able to compete with the MNCs and they have to shut down their business. It is mainly due to the following factors:
a. Lack of newer technology.
b. MNCs have huge wealth to influence the price and market condition.
Workers:
a. Due to the globalisation the MNCs don’t hire the workers on permanent basis.
b. They use flexibility in labour law policy.

Question. How are MNCs controlling and spreading their productions across the world? Explain.
Answer : The following are the three ways in which multinational corporations are controlling and spreading their production across the world:
a. Buying up the local companies: This is most common route for MNC investment and expanding production. MNCs can do so because they have huge wealth.
For example: Cargill Foods an American MNC has bought Indian company named Parakh Food, Now the control on the large marketing network and the four oil refineries has shifted to the Cargill Food. Cargill Food has now become the largest producer of edible oil in India.
b. Joining hand with local companies: Sometimes the MNCs join hands with the local companies and do the production. In this process, the local companies get twin benefits: (z) they get foreign investment and (ii) MNCs provide newer technology to them for the production. For example: In 1995 Ford Motors an American company joining hand with the Indian company called Mahindra and Mahindra (manufacturer of jeeps and trucks).
c. By placing orders: Sometimes MNCs just place orders with small producers around the world for the production of garments, footwear and sports items. After that, the products are supplied to the MNCs and sold under the brand name of the MNCs.

Question. “Fair globalisation would create opportunities for all and also ensure that benefits of globalisation are shared better.” Support the statement.
Answer : Yes, it is true to say that Fair globalisation would create opportunities for all and also ensure that benefits of globalisation are shared better. /
a. At present the globalisation is not free and fair. The developed countries are dominating over the developing countries. The MNCs have huge wealth and thus they influence the labour, price and market conditions.
b. In practice it can be seen that developing countries follow the rules whereas the developed countries have not liberalized their trade policies.
c. Also it is seen that the MNCs are producing goods mostly for the rich buyers. The workers are not getting permanent jobs due to the policies like flexibility in labour laws.
d. MNCs have better technology and capital investment which makes them superior in the market and the other producers are out of the race.

Question. Explain the role of MNCs in the globalisation process.
Answer : Globalisation can defined as the process of rapid interconnection or integration between the markets. MNCs play a vital role in promoting globalisation process as:
a. By producing goods and services at global level.
b. Goods and services are sold at global level.
c. Investments, technology and people are moving between countries.
d. It gives opportunity to the local producers to reach beyond the domestic market. e. MNCs by the foreign trade connects/ integrates the markets in the world.

Question. “Globalisation has been advantageous to both consumers as well as producers.” Support the statement with suitable examples.
Answer : Yes, it is true to say that the Globalisation has been advantageous to both consumers as well as producers because:
Consumers:
a. They get different brands of the product.
b. They get the goods and services at cheaper rate.
c. They get better quality products.
Producers:
a. The local producers joining hands with MNCs get a chance to expand their business.
b. They get the newer technology from the MNCs.
c. They get the investment done by MNCs in their companies. For example: In 1995 Ford Motors an American company joined hand with the Indian company called Mahindra and Mahindra (manufacturer of jeeps and trucks).

Question. Analyse any five positive effects of globalization on the Indian economy.
Answer : (All India 2017) The five positive effects of globalization on the Indian economy are:
a. Producers: The big producers who join hands with the MNCs are getting the profit and expanded their business across the globe.
b. Workers: MNCs helped in reducing the unemployment in India.
c. Buyers: The buyers are getting variety of brands with quality at cheaper rates.
d. The Indian producers are getting an opportunity to reach beyond the domestic market. e. The Indian producers got foreign investment and newer technologies from the MNCs.

Question. What is liberalization? Describe any four effects of liberalization on the Indian economy. 
Answer : Removing trade barriers set by the government is termed as liberalisation. If the country uses the policy of liberalisation then it means that it allows other countries to interact, which will lead to globalisation. The four effects of liberalisation on the Indian economy are:
a. The MNCs of other countries started coming to India.
b. The Indian producers got an opportunity to reach beyond the domestic market.
c. The Indian producers got foreign investment and newer technologies from the MNCs. d. The Indian buyers are getting variety of brands with quality at cheaper rates.

Question. How have our markets been transformed in recent years? Explain with examples.
Answer : This is true to say that now there is wide ranging choice of goods are available in the Indian markets. It is possible due to the policy of liberalisation, privatisation and globalisation followed by India since 1991. Before 1990, we had limited brands and limited variety of products in the market but now the market is flooded with variety of brands. For example, earlier we had just Ambassador and Fiat cars on the Indian roads but now we have so many brands from all over the world. The same happened in the field of TV, mobile phones, garments etc. ,

[A].1 MARK QUESTIONS:-

Question. What is Globalisation?
Answer : Globalisation refers to integration of a country's economy with world economy.

Question. What are MNC?
Answer :  Multinational Corporations are the companies operating in more than one or more countries.

Question. Define Trade Barrier.
Answer :  Trade barriers are the restrictions put by the government to regulate foreign trade.

Question. How many countries are currently the members of WTO?
Answer :  More than 159 countries are the members of WTO.

Question. What does SEZ stands for ?
Answer : Special Economic Zone.

Question. What are Special Economic Zone?
Answer : Special Economic Zones are the industrial centre having world class facilities provided by the host government to the multinational company.

Question. Name two top MNCs of India
Answer : (i)Tata Motors(Automobiles)
(ii) Infosys(IT).

Question. Name the Finance Minister of India who initiated Globalisation.
Answer : Dr. Manmohon Singh initiated Globalisation.

Question. What is Trade Surplus?
Answer : Trade Surplus refers to the profits incurred by a company or government from international trade.

Question. Which sector of India is a rising sector in the field of communication?
Answer :  Information and Technology sector is a rising sector in the field of communication.

[B]. 3 MARKS QUESTIONS:-

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

 (i)  Labour force can be utilised beyond working hours.

(ii)  Maximum profit or least cost.

(iii) Less liability of the company in case of any casuality.

Question. Write the ways MNCs set up control production in other countries.
Answer :  (i) Some MNC directly take over the sick industries of the host countries.
(ii) MNC work in collaboration with the companies of host countries.
(iii) Many MNC have tie-up with small companies.They supply them raw materials and technology and finished products are branded by them.

Question. What is Globalisation? What do you understand by liberalisation of Foreign Treade ?
Answer : Globalisation refers to integration of a country’s economy with world economy. Removing barriers or restrictions set by the government is what is known as liberalisation.

Question. Why government of India put trade barrier?
Answer :  (i) Trade barriers are restrictions in foreign trade.
(ii) Government gave enough oppurtunities to indigeneous companies of India to flourish.
(iii) Through trade barriers government wants to protect labours and environment.  

Question. Explain the concept of Fair Globalisation.
Answer : (i)  Fair Globalisation refers sharing the benefits of globalisation by all countries-developed and developing.

           (ii)  Fairer rules set by World Trade Organisation.

           (iii) Participation of people in the process of globalisation .  (Any other relevant point.)

Question. In what ways MNCs are different from other companies?
Answer : 

Question. Explain the ways government adopt to attract foreign companies for investment in India.
Answer :  (i)  Liberalise Labour Laws.

         (ii)  Establishment of Special Economic Zones.

         (iii) Relaxation in taxation policies for MNC. 

[C]. 5 MARKS QUESTIONS:-

 Question. Globalisation is a mixed blessing.’Explain the statement in context of India.
Answer :  Advantages:-
(i)   FDI accelerates economic growth of the host country.
(ii)  Consumers paradise due to competition in market.
(iii) MNC provide employment opportunities to the people in host countries.
Disadvantages:-
(i) Environmental hazards.
(ii) Exploitation of labours.
(iii) Drainage of resources of the host country and profit swallowed by MNC.

Question. Why do developed countries want developing countries to liberalise their trade and investment? What do you think should developing countries demand in return?
Answer :  Developed countries want to:-

      (i)  Liberalisation of the developing countries .

     (ii)  Establishment of SEZ.

     (iii) Concessions in matters as taxation, customs etc.

Developing countries want in return:-

(i) Fair globalisation.

(ii) Part of profit to be spent for eco-friendly approach.

(iii) More job opportunities for the unemployeds.

Question."Globalisation will continue in future". Give reasons for your answer.
Answer : (i)Globalisation process (LPG) opted by more and more countries.

         (ii) World is shrinking day by day.

        (iii) Exchange of technology between countries .

        (iv) Sharing of countries in matters of environment,resources etc.

       (v) Role of UNO and WTO to formulate fairer rules for the members countries.

Question. Write about the organisation and functions of WTO.
Answer : (i) WTO came to limelight in handling globalisation.

         (ii) More than 159 countries are the members of WTO.

        (iii) WTO is entrusted to formulate laws for international trade and commerce.

        (iv) Putting pressure on countries …….’Trade Barriers’.

        (v) Judicious attitude towards following a fair globalisation policy.

Question. What factors enabled globalization in India?
Answer :  (i) Failure of mixed economy pattern in India within 40 years.

         (ii) Government owned enterprises incurred huge loss.

         (iii) India took ‘U’ turn to embrace globalisation.Initiative taken by the then Finance Minister Dr.Manmohan Singh.

         (iv) Integration of India’s economy with world economy. 

         (v) Globalisation helps in coming of technology,goods and services.(Any other relevant point.) 

VERY SHORT ANSWER TYPE QUESTIONS

Question. Give the meaning of globalisation.
Answer : Globalisation means integrating the economy of a country with the economies of other countries under conditions of free flow of trade, capital and movement of persons across borders.

Question. How are the MNCs spreading their production across the globe?
Answer : MNCs are spreading their production across the globe by setting up partnerships with local companies, by using the local companies for supplies and by closely competing with local companies or buying them up.

Question. Why do MNCs set up their offices and factories in those regions where they get cheap labour and other resources?
Answer : MNCs set up their offices and factories in those regions where they get cheap labour and other resources because they bring down the cost of production and ensure more profits for themselves.

Question. What is the meaning of investment?
Answer : The money that is spent to buy assets such as land, building, machines and other equipments is called investment.

Question. What is meant by trade barrier?
Answer: It refers to the various restrictions which are used by the government of a country to increase or decrease foreign trade such as tax on imports.

Question. Why did the Indian government remove barriers to a large extent on foreign trade and foreign investment?
Answer : The Indian government realised that its domestic industries had established themselves and it was the proper time to face competition and improve the quality of production. So, barriers on foreign trade and investment were removed.

Question. Due to what reason are the latest models of different items available within our reach?
Answer : Globalisation

Question. In which two different forms do we participate in the market?
Answer: We participate in the market as producers and consumers.

Question. Differentiate between investment and foreign investment.
Answer : The money that is spent to buy assets such as land, building, machines etc. is called investment whereas investment made by a MNC to buy such assets is called foreign investment.

Question. Why had the Indian Government put barriers to foreign trade and foreign investment after independence? State any one reason.
Answer : To protect the producers within the country from foreign competition.

Question. Define the term investment.
Answer: An investment is an asset or item that is purchased with the hope that it will generate income in future. 

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

Question. What is multinational corporation?
Answer : A multinational corporation is a company that owns or controls the production of its goods in more than one country.

SHORT ANSWER TYPE QUESTIONS

Question. What are the harmful effects of MNCs to a host country? Give three examples.
Answer : The harmful impacts of MNCs to a host country are:
♦ They can hamper the growth of local industries by giving them tough competition.
♦ They generally use capital intensive techniques which may not be suitable for a developing country like India, where unemployment is a big problem.
♦ They may misuse the environment of the host country by over exploiting its natural resources.

Question. Why had the Indian government put barriers to foreign trade and foreign investment after independence? Analyse the reasons.
Answer : The Indian government put barriers on foreign trade and foreign investment after independence because:
(a) It was considered necessary to protect the producers within the country from foreign competition.
(b) In 1950s and 1960s, the industries were in nascent stage and competition from imports at that stage would not have allowed these industries to develop.
(c) Therefore, India allowed the imports of only essential items like machinery, fertilizers, petroleum etc.

Question. Explain the role of government in- making globalisation fair.
Answer : Government can play an important role in making globalisation fair in the following ways:
♦ Policies should be made in such a way that they protect the interests of not only the rich and prosperous producers but also the workers.
♦ Labour laws should be properly implemented favouring the workers so that their basic rights like sustainable wages, better working conditions, health etc. are not hampered.
♦ Efforts should be made to protect the small producers from international competition and prepare a stage for their survival.

Question. Why had Indian government put barriers to foreign trade and foreign investment after independence? Explain.
Answer : The Indian government put barriers on foreign trade and foreign investment after independence because:
♦ It was considered necessary to protect the producers within the country from foreign competition.
♦ In 1950s and 1960s, the industries were in nascent stage and competition from imports at that stage would not have allowed these industries to develop.
♦ Therefore, India allowed the imports of only essential items like machinery, fertilizers, petroleum etc.

Question. “The impact of globalisation has not been visualised uniformly among producers and workers.” Support the statement with facts.
Answer : Everyone has not benefitted from globalisation. While people with education, skill and wealth have made the best use of the opportunities offered by globalisation, the others have not shared the benefits. While producers have become MNCs, the workers are facing many problems.
Globalisation and competition among producers have changed the life of the workers. Most employers want to employ workers flexibly which means: jobs are no longer secure. Earlier workers were employed permanently. Now, they employ the workers temporarily, when there is pressure of work, otherwise they are dismissed.

Question. What is a trade barrier? Wliy did the Indian government put trade barriers after Independence? Explain.
Answer : Trade barriers are the restrictions that are imposed by the government on free import and export activities so as to protect its producers and entrepreneurs.
The Indian government put barriers on foreign trade and foreign investment after independence because:
♦ It was considered necessary to protect the producers within the country from foreign competition.
♦ In 1950s and 1960s, the industries were in nascent stage and competition from imports at that stage would not have allowed these industries to develop.
♦ Therefore, India allowed the imports of only essential items like machinery, fertilizers, petroleum etc.

Question. Why did Ford Motors want to develop Ford India as a component supplying base for its other plants across the globe? Explain.
Answer : Ford Motors wanted to develop Ford India as a component supplying base for its other plants across the globe because:
♦ Ford Motors was selling 27,000 cars in the Indian market and 24,000 cars were exported from India to South Africa, Mexico and Brazil. India was making components and know how to produce them, so they could be easily manufactured and sent across the globe.
♦ Sending components from India to other plants will reduce the time in manufacturing the components and the orders could be placed immediately.
Same plants would not need to be set up at all locations.

Question. What would happen if Government of India puts heavy tax on import of Chinese toys? Explain any three points.
Answer :
If Government of India puts heavy tax on import of Chinese toys, then
(a) the Chinese toys will become expensive and may be people will not buy them and, thus, the Chinese toys will loose their market in India.
(b) people in India, will buy local made goods (toys) and the local industries will get a boost and their sale will also go up.
(c) as there would be greater demand of Indian goods, the Indian, manufacturers, then, will earn more profits and workers will get more employment.

Question. How are local companies benefited by collaborating with multinational companies? Explain with examples.
Answer : The local companies are benefited by collaborating with multinational companies in the following ways:
♦ They provide money to the local companies for additional investments like buying new machines to replace the old ones.
♦ They bring the latest technology for production.
♦ They may build new stores and office buildings, thus providing employees with modern surroundings.

Question. ‘Barriers on foreign trade and foreign investment were removed to a large extent in India since 1991.’ Justify the statement.
Answer : In 1991, the Indian government decided that the time has come for Indian producers to compete with producers around the world. It felt that foreign competition would improve the quality of goods produced by Indian producers within the country.
Thus, barriers on foreign trade and foreign investment were removed to a large extent. It meant goods could be imported or exported easily and foreign companies could set up factories and offices in India.

Question. How did ‘Cargill Foods’ become the largest producer of edible oils in India? Explain.
Answer : Cargill Foods, a very large American MNC, bought Parakh foods, which had a large marketing network in many parts of India. It was a well reputed company. It had four oil refineries, whose control passed to Cargill Foods. Cargill Foods is, now, the largest producer of edible oil in India, with a capacity of making 5 million pouches daily.

Question. How does foreign trade integrates the markets of different countries? Explain with examples.
Answer : Foreign trade integrates the markets of different countries as:
(a) It provides an opportunity for both producers and consumers to reach beyond the markets of their own country.
(b) Producers now compete with markets located in other countries.
(c) There is an expansion of choice of goods beyond the domestic market.
(d) For example, during the Diwali season, buyers in India have the option of buying either Indian or Chinese decorative lights and bulbs. The Chinese manufacturers get the opportunity to expand their business.