Economics Mock Test- 5 - Class 10 MCQ

Explanation:

• Assertion (A): The rupee is widely accepted as a medium of exchange in India.


• Reason (R): It is authorized by the government of the country.

Detailed

• Acceptance of Rupee: The rupee is the official currency of India and is widely accepted as a medium of exchange for goods and services in the country.


• Legal Tender: The Indian government has authorized the use of the rupee as legal tender, which means that it must be accepted for payment of debts and transactions within the country.


• Government Authorization: The fact that the rupee is authorized by the government gives it legitimacy and ensures its widespread acceptance in the Indian economy.


• Correct Explanation: The reason provided (R) correctly explains why the assertion (A) is true. The government's authorization of the rupee as the official currency is the reason why it is widely accepted as a medium of exchange in India.

Therefore, option A is the correct answer as both the assertion and reason are true, and the reason is the correct explanation of the assertion.

Bank laying down norms for bank is

• RBI: The Reserve Bank of India (RBI) is the central bank of the country and is responsible for laying down norms and regulations for all banks operating in India.


• SBI: State Bank of India (SBI) is a prominent public sector bank in India but it does not lay down norms for other banks.


• Syndicate Bank: Syndicate Bank is a public sector bank in India but it is not responsible for laying down norms for other banks.


• All of these: The correct answer is RBI as it is the regulatory authority that sets guidelines and regulations for all banks to follow.

Disguised unemployment is found in the agricultural sector of India. Disguised unemployment is also known as hidden unemployment. In this type of unemployment, some people seem employed, but they are actually not.

Petroleum refining is not a service. Hence it is not included in the service sector of the economy. The service sector is also known as the tertiary sector of the economy. Petroleum refining is included in the secondary sector of the economy.

Initiative of World Trade Organisation (WTO)

• Rich countries: The World Trade Organisation (WTO) was not started at the initiative of rich countries. While they are influential members of the organization, they did not solely initiate its establishment.


• Poor countries: Poor countries also did not initiate the formation of the WTO. Their participation and interests are important within the organization, but they were not the driving force behind its creation.


• Developed countries: Developed countries, also known as industrialized or advanced economies, played a significant role in the establishment of the WTO. Their economic power and trade interests were key factors in shaping the organization.


• Developing countries: Developing countries, while not the sole initiators, were also crucial in the formation of the WTO. Their desire for fair trade practices, market access, and development opportunities influenced the creation and structure of the organization.

In conclusion, the World Trade Organisation (WTO) was started at the initiative of a group of countries that included both developed and developing nations. While developed countries had a significant role in its establishment, the interests and concerns of developing countries also played a crucial part in shaping the organization.

Explanation:

• MNC (Multinational Corporation) refers to a company that operates in multiple countries and produces goods globally.



• Producing goods globally means that the company has manufacturing facilities in different countries around the world. This allows them to access different markets, reduce production costs, and take advantage of specialized resources in various regions.



• Global production also enables MNCs to adapt to changing market conditions, political environments, and economic factors in different countries.



• By producing goods globally, MNCs can benefit from economies of scale, diversify risks, and gain a competitive edge in the international market.



• Overall, producing goods globally helps MNCs to expand their market reach, increase profitability, and stay competitive in the global economy.

Introduction:
Globalisation refers to the process of integration and interaction among people, companies, and governments of different nations. It involves the exchange of goods, services, information, and ideas across borders. The impact of globalisation has been significant, but its benefits and disadvantages have not been uniformly distributed across countries.
Globalisation in favor of developed countries:
1. Economic advantages: Developed countries have typically benefited more from globalisation due to their advanced economies, technological capabilities, and access to capital. They have been able to attract foreign direct investment, establish multinational corporations, and dominate global markets.
2. Trade dominance: Developed countries often have more established industries and greater market power, allowing them to export goods and services on a larger scale. They have been able to negotiate favorable trade agreements, leading to increased market access and reduced trade barriers.
3. Technological advancements: Developed countries have been at the forefront of technological innovations, enabling them to leverage these advancements in a globalised world. This has given them a competitive advantage in various sectors, such as information technology, pharmaceuticals, and aerospace.
4. Access to resources: Developed countries have historically had better access to resources, both natural and human. Globalisation has allowed them to exploit resources from other regions, further strengthening their economies.
Globalisation's impact on developing countries:
1. Economic growth: Globalisation has provided opportunities for developing countries to participate in global trade and attract foreign investment. This has the potential to boost economic growth, create jobs, and improve living standards.
2. Industrialization and diversification: Developing countries have been able to industrialize and diversify their economies by integrating into global value chains. This has allowed them to move from traditional agricultural-based economies towards manufacturing and services sectors.
3. Technology transfer: Globalisation has facilitated the transfer of technology and knowledge from developed countries to developing countries. This has helped in bridging the technological gap and enhancing productivity.
4. Access to markets: Developing countries have gained access to larger markets and export opportunities through globalisation. This has enabled them to increase their share in global trade and reduce dependence on a limited customer base.
Conclusion:
While globalisation has brought benefits to both developed and developing countries, it has been more in favor of developed countries overall. The economic advantages, trade dominance, technological advancements, and access to resources have given developed countries an edge in the globalised world. However, globalisation has also provided opportunities for developing countries to grow economically, diversify their industries, benefit from technology transfer, and access larger markets. It is important to address the disparities and ensure more equitable distribution of benefits from globalisation in the future.

Introduction:
Multinational corporations (MNCs) are companies that operate in multiple countries and have expanded their operations to global markets. Their success in entering these markets can be attributed to various factors, including their ability to adapt to different cultures, economies, and regulations. One significant factor that has facilitated the success of MNCs in entering global markets is the World Trade Organization (WTO).
Explanation:
The World Trade Organization (WTO) is an international organization that deals with the global rules of trade between nations. It provides a platform for negotiations and the resolution of trade disputes. The WTO aims to promote free and fair trade by reducing barriers to trade and ensuring that trade flows smoothly.
Benefits of WTO for MNCs:
Here are some reasons why MNCs have succeeded in entering global markets through the WTO:
1. Market Access: The WTO encourages its member countries to eliminate trade barriers such as tariffs, quotas, and discriminatory regulations. This provides MNCs with increased market access and the opportunity to expand their operations globally.
2. Non-Discrimination: The WTO promotes the principle of non-discrimination in international trade. It prohibits its member countries from treating foreign companies less favorably than domestic ones. This ensures that MNCs can compete on an equal footing with local companies in global markets.
3. Dispute Resolution Mechanism: The WTO provides a dispute settlement mechanism to resolve trade disputes between member countries. This mechanism ensures that MNCs have a fair and transparent process to address any trade-related issues they may face in global markets.
4. Intellectual Property Rights (IPR) Protection: The WTO has established intellectual property rights (IPR) agreements that protect the rights of inventors, authors, and creators. This provides MNCs with a secure environment to invest in research and development and protects their innovations and brands in global markets.
5. Technical Barriers to Trade: The WTO also addresses technical barriers to trade, such as product standards and regulations. It encourages its member countries to adopt international standards, which makes it easier for MNCs to comply with regulations in different markets.
Conclusion:
In conclusion, the World Trade Organization (WTO) has played a crucial role in facilitating the success of multinational corporations (MNCs) in entering global markets. The WTO's focus on promoting free and fair trade, market access, non-discrimination, dispute resolution, intellectual property rights protection, and addressing technical barriers to trade has created a favorable environment for MNCs to expand their operations globally.

Thailand has launched ‘Look West Policy. Both of these policies are complementary to each other.

Planning was considered for balanced socio-economic development to focus on removal of regional disparities and maximizing the utilization of available resources.

A. Rapid improvement in technology has been one major factor that has enabled the globalisation process. 

B. Improvement in information technology has played a major role in spreading out production of services across countries. Telecommun ication facilities are used to contact one another around the world to access info rmation instantly and to communicate from remote areas. 

C. Improvement in transportation has made possible muc h faster delivery of goods across long distances at low cost. 

D. Due to the pressure of WTO many developing countrie s have removed many of the trade barriers to foreign trade and investment and thus promoted and facilitate the globalisation. 

E. Multilateral trade agreement has promoted foreign t rade and free flow of investments. 

Globalisation has led to improvement in:

• Choice to consumers: Globalisation has expanded the variety of products and services available to consumers. It has opened up new markets and allowed consumers to access goods and services from different parts of the world. This has increased competition among businesses, leading to a wider range of choices for consumers.


• Quality of goods and services: Globalisation has also raised the overall quality of goods and services. Increased competition has forced businesses to improve their products and services to meet international standards. This has resulted in better quality products being available to consumers.


• Foreign investment: Globalisation has encouraged foreign investment in different countries. It has created opportunities for businesses to expand their operations globally, leading to increased investment and economic growth. Foreign investment brings in new technologies, expertise, and capital, which can contribute to the development of industries and infrastructure.

Overall, globalisation has positively impacted consumers by providing them with more choices, higher quality goods and services, and attracting foreign investment. Hence, the answer is D: all the above.

Explanation:

• GDP (Gross Domestic Product) of a country is based on the final value of goods and services produced within its borders during a specific time period.


• Total value of goods and services refers to the sum of all the goods and services produced, including intermediate goods, while final value of goods and services only considers the value of finished goods and services.


• Initial value of goods and services is not considered in the calculation of GDP as it does not reflect the total economic output of a country.


• Therefore, the correct answer is option B: final value of goods and services.

The Consumer Protection Act:
The Consumer Protection Act is the act that was enacted to protect the consumers. Here is a detailed explanation of the act:

• Objective: The Consumer Protection Act aims to protect the rights of consumers and provide them with a mechanism for redressal in case of any unfair trade practices or exploitation.



• Key Provisions: The act provides various provisions to safeguard consumer interests, such as:
  
  
  
  • Establishment of Consumer Protection Councils at national, state, and district levels to promote and protect the rights of consumers.
  
  
  • Establishment of Consumer Dispute Redressal Commissions at district, state, and national levels to provide speedy and efficient resolution of consumer disputes.
  
  
  • Prohibition of unfair trade practices, deceptive advertisements, and misleading representations by businesses.
  
  
  • Right to seek compensation for any loss or injury caused due to defective goods or deficient services.
  
  
  • Provisions for product liability and the right to file class action suits.
  
  
  • Establishment of Consumer Protection Councils at national, state, and district levels to promote and protect the rights of consumers.
  
  
  
  



• Consumer Rights: The act recognizes and protects certain rights of consumers, including:
  
  
  
  • Right to safety: Consumers have the right to be protected against goods or services that are hazardous to life and property.
  
  
  • Right to information: Consumers have the right to be informed about the quality, quantity, price, and other relevant aspects of goods or services.
  
  
  • Right to choose: Consumers have the right to choose from a variety of goods or services at competitive prices.
  
  
  • Right to be heard: Consumers have the right to be heard and have their grievances addressed.
  
  
  • Right to seek redressal: Consumers have the right to seek redressal against unfair trade practices or exploitation.
  
  
  
  



• Consumer Disputes Redressal: The act provides for a three-tier redressal system for consumer disputes:
  
  
  
  • District Consumer Dispute Redressal Commission: Deals with claims up to Rs. 20 lakh.
  
  
  • State Consumer Dispute Redressal Commission: Deals with claims between Rs. 20 lakh and Rs. 1 crore.
  
  
  • National Consumer Dispute Redressal Commission: Deals with claims above Rs. 1 crore.
  
  
  
  



• Consumer Awareness and Education: The act emphasizes the importance of consumer awareness and education by promoting consumer organizations, conducting awareness programs, and encouraging research and publication on consumer-related issues.



• Penalties and Remedies: The act provides for penalties and remedies in case of violations, including compensation, refund, replacement, discontinuation of unfair trade practices, and imprisonment in some cases.

Overall, the Consumer Protection Act plays a crucial role in safeguarding consumer rights and ensuring their protection against unfair

Assertion and Reasoning Analysis

• Assertion: Tax on imports is an example of trade barriers.


• Reason: Government can use it to increase or decrease foreign trade.

Solution

• Both A and R are true: Tax on imports is indeed a trade barrier as it restricts the flow of goods across borders, and governments can use it to regulate foreign trade.


• R is the correct explanation of A: The reason provided explains how the government can manipulate the tax on imports to either encourage or discourage foreign trade based on its economic objectives.

Therefore, option A is the correct choice as both the assertion and reasoning are true, and the reasoning correctly explains the assertion. Trade barriers such as taxes on imports play a significant role in regulating international trade and protecting domestic industries from foreign competition.

Explanation:

• Tata Steel: Tata Steel is an Indian multinational steel-making company.


• Headquarters: The company is headquartered in Mumbai, India.


• Operations: Tata Steel has production facilities in India, the United Kingdom, the Netherlands, Thailand, Singapore, China, and Australia.


• History: Founded in 1907, Tata Steel is one of the top steel producers globally.


• Products: The company manufactures a wide range of steel products for various industries such as automotive, construction, packaging, and more.


• Global Presence: Tata Steel has a significant presence in the global steel market and is known for its quality products and sustainable practices.

Therefore, Tata Steel is an Indian multinational company, making option B the correct choice.

Organisation that lays stress on liberalisation of foreign trade and foreign investment

• World Trade Organisation (WTO): WTO promotes liberalisation of foreign trade and foreign investment by establishing rules for international trade, facilitating negotiations between countries, and resolving trade disputes. It aims to create a level playing field for all countries by reducing trade barriers and promoting free trade.

Swayamsiddha is an integrated programme for the empowerment of women through the network of Self-Help Groups of women. The programme shall be implemented through the State government in 650 blocks throughout the country, but the State governments will be at liberty to choose the implementing authority.

Swadhar scheme, launched in 2001, provides for holistic rehabilitation of women in difficult circumstances. Twenty-two projects for the rehabilitation of the widows, women affected by riots in Gujarat, and women and girls rescued from prostitution are in operation at present. So both the statements are wrong.

Competition is rivalry for obtaining the same resource. Competition of light, nutrients and space is most severe between closely related organisms growing in the same area/niche, due to overproduction of population in the same area/niche.

The tertiary sector of the economy is the service sector and industry. 

This sector provides services to the general population and the businesses organization. 

The activities allied with this sector include wholesale sales and retail, distribution and transportation, entertainment such as television, movies, music, theatre, radio, etc. and restaurants, media, clerical services, tourism, banking, healthcare, and insurance. 

The share of the tertiary sector in terms of GDP in 2003 is was 50-60%.per cent.

Workers in the tertiary sector do not produce goods.

Employment Generation: Manufacturing units in the unorganised sector results
in employment to a large section of the people. Intervention og the government in
manufacturing sector through the Make in India policy will help to develop
unorganised sector and increase employment to a very great extent. 

The credit made Rohan better off in this situation, however, Rohan would have been worse off if he had failed to deliver the goods on time or he had made a loss in the production process. The latter two situations may have caused Rohan to fall in a debt trap

Banks in India hold about 15 percent of their deposits as cash as the remaining deposits are used to provide loans. The interest charged on Loans is higher than the interest paid on deposits and the difference between the two interest rates is the major source of income for banks.

Public facilities are services provided by the government to satisfy the collective needs of the people. These include infrastructure, sanitation, public transport, healthcare, and more. They are considered essential for a nation as they ensure the well-being and development of the entire population, fostering social equity and inclusivity.

The main attribute of sustainable development related to natural resources is preservation and responsible use. Sustainable development aims to ensure the long-term availability of resources, including exhaustible natural resources and environmental resources, by promoting responsible and balanced utilization.

Investment made by MNCs is called foreign investment. Any investment is made with the hope that these assets will earn profits. At times, MNCs set up production jointly with some of the local companies of these countries.

Ford Motor Co has agreed to move most of its assets in India into a joint venture with Mahindra and Mahindra after its two-decade old effort to gain a sizeable market share in the world's fourth largest car market did not bear fruit.

Primary sector is the economic sector that produce goods by exploiting the natural resources because it forms the base for all the products that are associated directly with land and water. Production of wheat, vegetables, milk , marble and coal are some examples of this sector. Most of the natural products we get our from agriculture, fisheries, forestry, mining, etc.
Primary sector is important to the Indian economy because it provides employment to largest section of population. It provides raw materials such as sugar, jute, cotton etc to industries. It also forms a significant part of country's GDP. Primary sector is also called agriculture and related sector.

Manufacturing and Industry sector known as secondary sector, sometimes as production sector, includes all branches of human activities that transform raw materials into products or goods. The secondary sector includes secondary processing of raw materials, food manufacturing, textile manufacturing and industry.