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Class 10 Economics Chapter 4 Extra Questions and Answers Globalisation and the Indian Economy
Globalisation and the Indian Economy Class 10 Extra Questions and Answer Economics Chapter 4 Very Short Answers Type
Question 1.
Amit is using his money to buy assets like house, commercial land and machines. Write what is he actually doing?
Answer:
He is investing his money with a hope of earning profits from these assets.
Question 2.
What is meant by fair globalisation?
Answer:
Fair globalisation means that the benefits of globalisation are shared by all equally.
Question 3.
Why had the Indian Government put barrier to foreign trade and foreign investment after Independence? State any one reason.
Answer:
It was considered necessary to protect the producers within the country from foreign competition.
Question 4.
Why did the Indian Government remove barriers to a large extent on foreign trade and foreign investment?
Answer:
The Indian Government removed barriers so that goods could be imported and exported easily and also foreign companies could set up factories and offices here.
Question 5.
What are Multinational Corporations or MNCs?
Answer:
MNCs are companies that own or control production in more than one nation.
Question 6.
What is the most common route for MNC investments?
Answer:
The most common route for MNC investments is to buy up local companies and then to expand production.
Question 7.
What do you know about Mahindra and Mahindra?
Answer:
Mahindra and Mahindra is a major Indian manufacturer of jeeps and trucks.
Question 8.
Why are Chinese toys more popular in Indian markets?
Answer:
Because of the cheaper prices and new designs, Chinese toys are more popular in Indian markets.
Question 9.
When Chinese toys came into Indian markets they became popular. How did it affect the Chinese toy makers and Indian toy makers?
Answer:
For Chinese toy makers, this provided an opportunity to expand business. But Indian toy makers faced losses.
Question 10.
What purpose do telecommunication facilities serve?
Answer:
Telecommunication facilities are used to contact one another around the world, to access information instantly and to communicate from remote areas.
Question 11.
Why do governments use trade barriers?
Answer:
Governments use trade barriers to increase or decrease (regulate) foreign trade and to decide what kinds of goods and how much of each, should come into the country.
Question 12.
What are trade barriers?
Answer:
Trade barriers are restrictions imposed by the governments of a country to check free international exchange of goods and services.
Question 13.
Most employers prefer to empoy workers ‘flexibly’ these days. What does this mean?
Answer:
This means that workers’jobs are no longer secure. Companies hire them for short periods when there is intense pressure of work and after that they ask them to leave.
Question 14.
What is the aim of World Trade Organisation?
Answer:
The aim of WTO is to liberalise international trade.
Question 15.
Why is fair globalisation essential?
Answer:
It is essential to create opportunities for all and to ensure that the benefits of globalisation are shared better.
Question 16.
Name some of the large Indian companies which have emerged as multinationals due to globalisation.
Answer:
Tata Motors (automobiles), Infosys (IT), Ranbaxy (medicines), Asian Paints (paints), Sundaram Fasteners (nuts and bolts).
Globalisation and the Indian Economy Class 10 Extra Questions and Answer Economics Chapter 4 Short Answers Type
Question 1.
Define the term ‘liberalisation’. Explain the reasons for the Indian Government beginning the policy of liberalisation in 1991.
Answer:
Removing barriers or restrictions set by the government is known as liberalisation.
In 1991, the government decided that 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. So, it removed barriers on foreign trade and foreign investment.
Question 2.
“Technology has stimulated the globalisation process”. Support the statement with examples.
OR
How has information and communication technology stimulated globalisation process? Explain with examples.
Answer:
(i) Rapid improvement in technology has been a major factor that has stimulated the globalisation process. For instance, in the past fifty years these have seen several improvements in transportation technology. This has made much faster delivery of goods across long distances possible at lower costs.
(ii) In recent times, technology in the areas of telecommunications, computers, Internet has been changing rapidly. Telecommunication facilities are used to contract one another around the world, to access information instantly, and to communicate from remote areas.
(iii) Computers have now entered almost every field of activity. Through Internet we can obtain and share information on almost anything we want to know. Internet also allows us to send instant electronic mail and talk across the world at nominal costs.
Question 3.
“Foreign trade integrates the markets in different countries.” Support the statement with arguments.
Answer:
Foreign trade creates an opportunity for the producers to reach beyond the domestic markets. producers can sell their products not only in markets located within the country but can also compete in markets located in other countries of the world too. Similarly, for the buyers, import of goods produced in another country expands the choice of goods beyond what is domestically produced.
Japanese car in India and Indian ready made garments in other countries have resulted in connecting the markets in different countries. Thus, with the opening of trade between countries, goods travel from one market to another. This leads to integration of markets across countries.
Question 4.
Why did Ford Motors Company want to develop Ford India as a component supplying base for its other plants across the globe? Explain.
Answer:
The reasons behind it are given below-
(i) Wages and salaries are much lower in India in comparison to developed countries. Raw materials and power are also cheaper in India.
(ii) There are many companies which manufacture various auto-parts. For example, Sundaram Fasteners. These companies supply various parts at low rates.
(iii) India and China together provide a huge market for various companies. Making a production base in India means easy access to these two markets.
Question 5.
How do Multinational Companies manage to keep the cost of production of their goods low? Explain with examples.
Answer:
MNCs manage to keep the cost of production of their goods low in the following ways-
(i) They set up their production units in a country which offers cheap and skilled labour. For example, India, China and Bangladesh are the most wanted countries where MNCs find abundant labour force at cheap rate.
(ii) They locate their industry where raw material is easily available to avoid unnecessary delays.
(iii) MNCs need close-by markets for the sale of their products. Mexico and Eastern Europe are useful for their closeness to the markets in the US and Europe.
(iv) Large MNCs in developed countries place order for production with small producers. These producers supply products to the MNCs which then sell these under their own brand names to the customers at somewhat higher rates. In this way, they earn huge profits.
(v) MNCs hire workers flexibly for short periods when there is intense pressure of work. They do this to reduce the cost of labour.
Question 6.
How are local companies benefited by collaborating with multinational companies? Explain with examples.
Answer:
(i) MNCs at times set up production jointly with local companies. The benefit to the local company of such joint production is two-fold
- First, MNCs provide money for additional investments, like buying new machines for faster production.
- Second, MNCs bring with them the latest technology for production.
(ii) Parakh Foods was a small company earlier. When Cargill Foods, a very large American MNC, bought this company, it built a large marketing network in various parts of India where its brand is now well-reputed.
(iii) Also Prakash Foods had four oil-refineries, whose control has now shifted to Cargill. Cargill is now the largest producer of edible oil in India.
Question 7.
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—
- Those who wish to import these toys would have to pay tax on this.
- Because of the tax, buyers will have to pay a higher price on imported toys.
- Chinese toys will no longer be as cheap in the Indian markets and imports from China will automatically reduce.
- Indian toy makers would get an opportunity to expand their business.
Question 8.
What is the meaning of WTO? What is its main aim? Mention any two of its shortcomings.
Answer:
WTO stands for World Trade Organisation. Its aim is to liberalise international trade. It was started at the initiative of the developed countries. It establishes rules regarding international trade and sees that these rules are obeyed.
Two shortcomings of WTO are—
- Though it is supposed to allow free trade for all. In practice, it is seen that the developed countries have unfairly retained trade barriers as they still continue to provide protection to their producers.
- The organisation forces developing countries to remove trade barriers. This is an unfair practice which must be stopped.
Question 9.
Explain how the Indian companies gained after the trade barriers were removed by the government? Explain any three points.
Answer:
(i) Removal of trade barriers has helped the Indian companies to expand their markets globally. Now Indian products are being sold everywhere in the world. Also, a large number of foreign products can be seen in Indian markets.
(ii) Removal of trade barriers has developed a spirit of competition among the local companies. Several of the top Indian companies have been able to take benefit from the increased competition. They have invested in newer technology and production methods and raised their production standards. Some have gained from successful collaborations with foreign companies.
(iii) Removal of trade barriers has enabled some large Indian companies to emerge as multinationals themselves. For example, Tata Motors, Infosys, Ranbaxy, Asian Paints etc. are some of the Indian companies which are spreading their operations worldwide.
Question 10.
Does the US government obey the rules established by WTO regarding international trade? Explain with an example.
Answer:
The US government does not obey the rules established by WTO regarding international trade. It has unfairly retained trade barriers. For example, farmers in the US receive massive sums of money from the US government for production and for exports to other countries. Due to this massive money that they receive, the US farmers can sell the farm products at abnormally low prices. The surplus farm products are sold in other country markets at low prices, adversely affecting farmers in these countries.
Question 11.
Analyse one good and one bad effect of globalisation on India.
Answer:
One good effect of globalisation on India:
MNCs have increased their investment in India. Industries such as cell phones, automobiles, electronics, soft drinks, fast food or services such as banking in urban areas have come up. In these industries and services, new jobs have been created. Also, local compaines supplying raw materials, etc. to these industries have prospered.
One bad effect of globalisation on India:
For a large number of small producers and workers globalisation has posed a great problem. Batteries, capacitors, plastics, toys, tyres, dairy products, and vegetable oil are some examples of industries where the small manufacturers have been hit hard due to competition. Several of the units have been shut down rendering many workers jobless.
Question 12.
Describe the impact of flexible labour laws on workers.
OR
How has flexibility in labour laws affected the poor workers?
Answer:
(i) Flexibility in labour laws has badly affected the poor workers. Earlier the companies employed these workers on regular basis. They were bound to obey certain rules that aimed to protect workers’ rights. But now with flexibility in labour laws, they ignore many of these rules which makes the workers’ condition miserable.
(ii) Now they hire workers flexibly for short periods when there is intense pressure of work. Afterwards, they ask these workers to leave. By doing this, they reduce the cost of labour but at the same time increase the insecurity of the labourers.
(iii) Workers are made to work for long hours and in night shifts too. They are also not given fair wages. As a result, they lead a very tough life.
Globalisation and the Indian Economy Class 10 Extra Questions and Answer Economics Chapter 4 Long Answers Type
Question 1.
“The impact of globalisation has not been uniform.” Demonstrate with the help of illustrations.
Answer:
(i) While globalisation has benefited well-off consumers and also producers with skill, education and wealth, many small producers and workers have suffered as a result of the rising competition.
(ii) There is greater choice before well-off consumers who now enjoy improved quality and lower prices for several products. As a result, these people today, enjoy much higher standards of living than was possible earlier.
(iii) MNCs have increased their investments in India over the past 20 years, which means investing in India has been beneficial for them. MNCs have been interested in industries such as cell phones, automobiles, electronics, soft drinks or services such as banking in urban areas. These products have a large number of well-off buyers. In these industries and services, new jobs have been created. The supply of raw materials, etc. by the local companies to these industries have flourished.
(iv) Many Indian companies have turned into MNCs. Tata Motors, Infosys, Ranbaxy, Asian Paints, etc.are some Indian companies which are spreading their operations worldwide.
(v) Several of the top Indian companies have been able to benefit from the rising competition due to globalisation. They have invested in newer technology and production methods and raised their production standards. Some have gained from successful collaborations with foreign companies.
(vi) But small producers and workers have faced tough times in the process of globalisation. They have been hit hard due to competition. Several of the manufacturing units have been shut down rendering many workers jobless. Uncertain employment and insecurity among workers have made their lives quite different. Thus, we can say that the impact of globalisation has not been uniform.
Question 2.
How are multinational corporations (MNCs) controlling and spreading their productions across the world? Explain.
Answer:
(i) MNCs set up factories and offices for production in regions where they can get cheap labour and other resources. Countries like India, China, and Bangladesh provide best facilities for the MNCs.
(ii) At times, MNCs set up production jointly with some of the local companies of these countries. But the most common route for MNC investments is to buy up local companies and then to expand production. MNCs with huge wealth can easily do so.
(iii) In fact, many of the top MNCs have wealth exceeding the entire budgets of the developing countries governments. With such enormous wealth, the MNCs exercise greater power and influence.
(iv) There is still another way in which MNCs control production. Big MNCs in developed countries place orders for production with small producers. Garments, footwear, sports items etc. are some of the industries where production is carried out by a large number of small producers around the world. The products are supplied to the MNCs, which then sell these under their own brand names to the customers.
Thus, 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, MNCs control production in other countries.
Question 3.
“Fair globalisation would create opportunities for all and also ensure that benefits of globalisation are shared better.” Support the statement.
OR
What role can the government play in order to ensure fair globalisation?
OR
Explain how globalisation can be made more fair?
Answer:
We have seen that everyone has not benefited from globalisation. People with education, skill and wealth have made the best use of new opportunities. On the other hand, there are many people who have not shared the benefits. It is therefore, we need fair globalisation.
The government can work for the cause of fair globalisation in the following ways—
- It can make policies to protect the interests, not only of the rich and powerful, but all the people in the country.
- The government can ensure that labour laws are properly implemented and the workers get their rights.
- It can support small producers to improve their performance till the time they become strong enough to compete.
- If necessary, the government can use trade and investment barriers.
- It can negotiate at the WTO for fairer rules. It can also align with other countries with similar interests to fight against the domination of developed countries in the WTO.
Question 4.
Explain the role of multinational corporations in the globalisation process.
OR
What is globalisation? Describe the role of Multinational Corporations (MNCs) in promoting globalisation process.
Answer:
(i) MNCs set up offices and factories for production in various parts of the world.
(ii) They sell their finished products globally and more importantly, the goods and services are produced globally.
(iii) Foreign investment by MNCs in various countries has been rising. At the same time, foreign trade between countries has been rising rapidly.
(iv) MNCs control a large part of the foreign trade. For instance, the car manufacturing plant of Ford Motors in India not only produces cars for the Indian markets but also it exports cars to other developing countries and exports car components for its many factories around the world.
(v) More and more goods and services, investments and technology are moving between countries. Most regions of the world are in closer contact with each other due to those MNCs. Thus, MNCs are playing a major role in the globalisation process.
Question 5.
“Globalisation has been advantageous to consumers as well as to producers.” Support the statement with suitable examples.
Answer:
(i) While globalisation has benefited well-off consumers and also producers with skill, education arid wealth, many small producers and workers have suffered as a result of the rising competition.
(ii) There is greater choice before well-off consumers who now enjoy improved quality and lower prices for several products. As a result, these people today, enjoy much higher standards of living than was possible earlier.
(iii) MNCs have increased their investments in India over the past 20 years, which means investing in India has been beneficial for them. MNCs have been interested in industries such as cell phones, automobiles, electronics, soft drinks or services such as banking in urban areas. These products have a large number of well-off buyers. In these industries and services, new jobs have been created. The supply of raw materials, etc. by the local companies to these industries have flourished.
(iv) Many Indian companies have turned into MNCs. Tata Motors, Infosys, Ranbaxy, Asian Paints, etc. are some Indian companies which are spreading their operations worldwide.
(v) Several of the top Indian companies have been able to benefit from the rising competition due to globalisation. They have invested in newer technology and production methods and raised their production standards. Some have gained from successful collaborations with foreign companies.
(iv) But small producers and workers have faced tough times in the process of globalisation. They have been hit hard due to competition. Several of the manufacturing units have been shut down rendering many workers jobless. Uncertain employment and insecurity among workers have made their lives quite different. Thus, we can say that the impact of globalisation has not been uniform.
Question 6.
How can trade between countries be made more fair? Explain five measures.
OR
Suggest any five measures to make globalisation just and fair.
Answer:
We have seen that everyone has not benefited from globalisation. People with education, skill and wealth have made the best use of new opportunities. On the other hand, there are many people who have not shared the benefits. It is therefore, we need fair globalisation.
The government can work for the cause of fair globalisation in the following ways—
- It can make policies to protect the interests, not only of the rich and powerful, but all the people in the country.
- The government can ensure that labour laws are properly implemented and the workers get their rights.
- It can support small producers to improve their performance till the time they become strong enough to compete.
- If necessary, the government can use trade and investment barriers.
- It can negotiate at the WTO for fairer rules. It can also align with other countries with similar interests to fight against the domination of developed countries in the WTO.
Question 7.
In what ways has competition affected workers, Indian exporters and foreign MNCs in the garment industry?
Answer:
(i) Large MNCs in the garment industry in Europe and America order their products from Indian exporters. These large MNCs with worldwide network look for the cheapest goods in order to maximise their profits.
(ii) To get these large orders, Indian garment importers try hard to cut their own costs. As costs of raw materials cannot be reduced, exporters try to cut labour costs.
(iii) Earlier a factory used to employ workers on a permanent basis. But now they employ workers on a temporary basis so that they do not have to pay workers for the whole year.
(iv) Workers also have to put in long working hours and work night shifts on a regular basis during the peak season. Wages are low and workers are forced to work overtime to look after their families.
(v) While the competition among the garment exporters has allowed the MNCs to make large profits, workers are denied their fair share of benefits brought about by globalisation.
Question 8.
What is globalisation? Explain with three examples how top Indian companies have benefited from globalisation?
Answer:
Globalisation is the process of rapid integration or interconnection between countries. MNCs are playing a major role in the process of globalisation. More and more goods and services, investments and technology are moving between countries. Most regions of the world are now in close contact with each other.
Several of the top Indian companies have benefited from the rising competition due to globalisation
- They have invested in newer technology and production methods and raised their production standards.
- Some have gained from successful collaborations with foreign companies.
- Globalisation has enabled some large Indian companies to emerge as multinationals. For example, Tata Motors, Infosys, Ranbaxy, Asian Paints, etc. are some Indian companies which are spreading their operations worldwide.
Question 9.
How has improvement in technology stimulated the globalisation process? Explain with five examples.
Answer:
(i) Rapid improvement in technology has been a major factor that has stimulated the globalisation process. For instance, in the past fifty years these have seen several improvements in transportation technology. This has made much faster delivery of goods across long distances possible at lower costs.
(ii) In recent times, technology in the areas of telecommunications, computers, Internet has been changing rapidly. Telecommunication facilities are used to contract one another around the world, to access information instantly, and to communicate from remote areas.
(iii) Computers have now entered almost every field of activity. Through Internet we can obtain and share information on almost anything we want to know. Internet also allows us to send instant electronic mail and talk across the world at nominal costs.
Globalisation and the Indian Economy Class 10 Extra Questions and Answer Higher Order Thinking Skills (HOTS) Questions
Question 1.
“Globalisation and greater competition among producers has been advantageous to consumers.” Support the statement with examples.
Answer:
Globalisation has given birth to competition among producers which has been a great advantage for the consumers
- There is greater choice before these consumers.
- Competition has improved the quality of goods.
- Bargain can be possible due to competition among producers. As a result, consumers can buy several products at lower prices.
- People today enjoy much higher standards of living than was possible earlier.
Question 2.
How is information technology connected with globalisation?
Answer:
(i) Rapid improvement in technology has been a major factor that has stimulated the globalisation process. For instance, in the past fifty years these have seen several improvements in transportation technology. This has made much faster delivery of goods across long distances possible at lower costs.
(ii) In recent times, technology in the areas of telecommunications, computers, Internet has been changing rapidly. Telecommunication facilities are used to contract one another around the world, to access information instantly, and to communicate from remote areas.
(iii) Computers have now entered almost every field of activity. Through Internet we can obtain and share information on almost anything we want to know. Internet also allows us to send instant electronic mail and talk across the world at nominal costs.
Question 3.
Explain how the developing countries which are members of the WTO suffer due to trade barriers.
Answer:
Nearly 160 countries of the world are currently members of the WTO (as on June 2014). These are mostly developing countries which have got fed up with the developed countries due to their unfair trade practices.
We know that WTO aims to liberalise international trade. It establishes rules regarding international trade and sees that these rules are obeyed. But in practice, these rules are ignored by the developed countries. For instance, farmers in the US receive huge sums of money from the government and as a result they can sell the farm products at abnormally low prices in other countries, adversely affected farmers in those countries.
On the other hand, developing countries are forced to obey the rules set by WTO. This is unfair and therefore, developing countries are asking developed countries to stop this wrong practice.
Question 4.
Explain three factors that MNCs take into account before setting up production in other countries.
Answer:
(i) MNCs set up offices and factories for production in those regions of the world where cheap labour is abundantly available.
(ii) Availability of raw materials and markets in close proximity is also a major factor that MNCs take into account for their purposes.
(iii) Favourable government policies are also important. If the government of a particular country allows flexibility in labour laws, it will help MNCs in reducing cost of labour and increasing their own profits.
Question 5.
What is an MNC? Give two examples of Indian companies that have emerged as MNCs. What are the harmful effects of MNCs to a host country? Give three examples.
Answer:
A Multinational Corporation or MNC is a company that owns or controls production in more than one nation.
Two examples of Indian companies that have emerged as MNCs
- Tata Motors (automobiles)
- Ranbaxy (medicines)
Harmful effects of MNCs to a host country
- Small producers of the host country usually fail to compete and get perished.
- MNCs in order to earn huge profits, employ workers flexibly. This means that workers’jobs are no longer secure.
- MNCs exploit the resources of the host country in a very irresponsible manner. Due to this attitude of theirs, a poor country turns into a poorer country in a span of few years.
Globalisation and the Indian Economy Class 10 Extra Questions and Answer Economics Chapter 4 Value-based Questions (VBQs)
Question 1.
Give three advantages of globalisation.
OR
Which values are associated with globalisation?
Answer:
More and more goods and services, investments and technology are moving between countries. Most regions of the world are in closer contact with each other than a few decades back.
Movement of people between countries has increased. They move from one country to another in search of better income, better jobs or better education.
Advancement in transportation technology has made delivery of goods across long distances faster and at lower costs. Globalisation has resulted in greater competition among producers. As a result of it, there is greater choice before consumers. They enjoy improved quality and lower prices for several products.
Question 2.
What is the meaning of SEZ? Mention any three features of SEZ. Do you think with the setting up of SEZs. There will be a sea charge in the life of the people?
Answer:
SEZ stands for Special Economic Zone. In recent years, SEZs are being set up by the central and state governments in India to attract foreign companies to invest in India.
Features of SEZs
- SEZs are to have world class facilities such as electricity, water, roads, transport, storage, recreational and educational facilities.
- The companies that set up production units in the SEZs do not have to pay taxes for an internal period of five years.
- Government has allowed flexibility in labour law to attract foreign investment. This is done to reduce the cost of labour for the company.
The main aims of the SEZs are: increased trade, investment, job creation and effective administration. It has been set up to attract foreign direct investment. A company produces and trade goods at a globally competitive price with the setting up of SEZs people will get more employment opportunities and there will be a sea charge in the life of the people.
