Test: Globalization & the Indian Economy - 4 - Class 10 MCQ

The correct answer is A agriculture is the most ignored sector.
 

The industrial sector has performed poorly in the reform period because of decreasing demand of industrial products due to various reasons' such as cheaper imports, inadequate investment, infrastructure etc. Cheaper imports have replaced the demand for domestic goods in India.

The correct option is D.
Fair globalisation would create opportunities for all and also ensure that benefits of globalisation are shared better. (i) Government policies must protect the interests not only of the rich and powerful but of all the people in the country.

Globalisation results in greater competition among producers
- Globalisation leads to an increase in international trade and the flow of goods and services across borders.
- This greater interconnectedness and integration of economies result in producers from different countries competing with each other in the global marketplace.
- Here are some reasons why globalisation leads to greater competition among producers:
- Access to larger markets: Globalisation allows producers to access larger markets beyond their domestic boundaries. This means they have to compete with more players for market share.
- Lower trade barriers: Globalisation often involves the reduction of trade barriers such as tariffs and quotas. This allows producers from different countries to compete on a more level playing field, increasing competition.
- Technological advancements: Globalisation is often accompanied by advancements in technology and communication. This enables producers to reach customers in different parts of the world more easily, leading to increased competition.
- Price comparison: With globalisation, consumers have access to more information and can easily compare prices and quality from different producers. This puts pressure on producers to offer competitive prices and higher quality.
- In conclusion, globalisation results in greater competition among producers as they have to compete with a larger pool of players, face reduced trade barriers, leverage technological advancements, and meet the demands of informed consumers.

The past two decades of globalisation has seen rapid movements in goods, services and investments between countries.

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.

- Nationalisation of banks in India initiated in 1969 because of socialistic principles of government.

- Liberalisation, Privatisation and Globalisation (LPG) reforms started in  1991.

- Technology intrusion, Liberalisation of trade and emergence of World Trade Organisation were started after 1991 LPG reforms.

- These reforms opens the Indian market to foreign companies which results in people of India gets the cheapest goods, domestic companies faced the competition from Multi-national companies and service-led growth.

Greater integration of global commodities markets leads to constant fluctuation in prices. This has increased the vulnerability of Indian farmers. Farmers are also increasingly dependent on seeds and fertilizers sold by the MNCs.

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.

164  members since 29 July 2016 , with dates of WTO membership.

FDI (Foreign Direct Investment) attracted by globalization in India belongs to the multinationals.
Foreign Direct Investment (FDI) refers to the investment made by foreign companies or individuals in the domestic market of another country. In the case of India, FDI attracted by globalization primarily belongs to multinational corporations. Here is a detailed explanation:
1. Definition of Foreign Direct Investment:
- FDI is a form of investment where a company or individual from one country invests in businesses or assets in another country.
- It involves a long-term commitment and control over the foreign enterprise.
2. Globalization and FDI in India:
- Globalization refers to the integration of economies and societies through cross-border flows of goods, services, capital, and technology.
- India has been actively involved in globalization, opening up its markets and encouraging foreign investments.
3. Attracting FDI:
- India, being one of the fastest-growing economies and having a large consumer market, attracts FDI from various sources.
- The government of India has implemented policies and reforms to attract foreign investors, such as easing regulations, improving infrastructure, and providing incentives.
4. Multinationals and FDI:
- Multinational corporations (MNCs) are companies that operate in multiple countries, with their headquarters in one country and subsidiaries in others.
- MNCs are major contributors to FDI inflows in India, as they seek to expand their market presence, access resources, and capitalize on the growth opportunities offered by the Indian market.
- Examples of multinational corporations investing in India include Walmart, Samsung, Amazon, and Toyota.
5. Other Sources of FDI:
- While multinationals are the primary source of FDI in India, there are other sources as well, such as foreign governments and sovereign wealth funds.
- Foreign governments may invest in India to strengthen diplomatic relations or support specific sectors.
- However, their contribution to FDI inflows is relatively smaller compared to multinationals.
6. Conclusion:
- In conclusion, FDI attracted by globalization in India primarily belongs to multinationals.
- Multinational corporations invest in India to expand their market reach and take advantage of the country's growing economy.
- The Indian government's efforts to attract FDI have resulted in increased foreign investments, driving economic growth and development in the country.

C is the correct option. Globalization is the word used to describe the growing interdependence of the world's economies, cultures, and populations, brought about by cross-border trade in goods and services, technology, and flows of investment, people, and information.

To answer the question, let's break it down into different points:
1. Definition of a company operating in more than one country:
- A company that operates in more than one country is known as a multinational company.
2. Options provided:
- A: Partnership
- B: Corporation
- C: Foreign company
- D: Multinational
3. Analysis of the options:
- Option A: Partnership refers to a business owned and operated by two or more individuals, but it does not necessarily operate in multiple countries.
- Option B: Corporation is a legal entity that is separate from its owners, and it can operate in multiple countries. However, not all corporations operate internationally.
- Option C: Foreign company generally refers to a company that operates in a country other than its home country, but it may not necessarily operate in multiple countries.
- Option D: Multinational is the correct answer as it specifically describes a company that operates in more than one country.
4. Conclusion:
- Based on the analysis, the correct answer is option D: Multinational.

Investment refers to the act of spending money with the expectation of generating future income or returns. In the context of the given options, investment can be made in various forms, such as factory building, machines, and equipment. Let's break down each option to understand how they contribute to investment:
1. Factory Building: Investing in factory buildings involves constructing or acquiring physical structures where production activities take place. This includes purchasing land, materials, and labor to establish a manufacturing facility.
2. Machines: Investment in machines refers to purchasing or leasing equipment that aids in the production process. Machines can range from simple tools to complex industrial machinery, depending on the nature of the business.
3. Equipment: Equipment investment involves acquiring necessary tools, devices, or instruments to support the production or operation of a business. This can include items such as computers, vehicles, furniture, or specialized machinery.
4. All the above: The answer option "D: all the above" indicates that investment encompasses spending on factory building, machines, and equipment. This means that investment is not limited to any single form but includes all these options.
In summary, investment involves spending on factory building, machines, and equipment. These investments are made with the expectation of generating future income or returns.

Contributions to Globalisation:

• External trade: External trade, also known as international trade, plays a significant role in globalisation. It involves the exchange of goods and services between countries, promoting economic integration and interdependence on a global scale.


• Internal trade: While internal trade refers to trade within a country, it also contributes to globalisation indirectly. As countries engage in internal trade, they develop capabilities, infrastructure, and expertise that can eventually facilitate international trade.


• Large scale trade: Large scale trade, involving substantial quantities of goods and services, contributes to globalisation by creating broader market opportunities and increasing economic cooperation between nations.


• Small scale trade: Although small scale trade may not have the same magnitude as large scale trade, it still contributes to globalisation by fostering connections between individuals, communities, and businesses across borders. It promotes cultural exchange and the spread of ideas.

Overall, external trade is the most direct and influential contributor to globalisation. However, internal trade, both large and small scale, also play important roles in supporting and enhancing globalisation.

Market integration occurs when prices among different locations or related goods follow similar patterns over a long period of time. Groups of good often move proportionally to each other and when this relation is very clear among different markets it is said that the markets are integrated.

Economic liberalization refers to those government policies which promote economic growth by opening up trade to international markets, extending the use of markets and lessening the restrictions and regulations placed on business. Economic liberalization does not always come without its drawbacks. Domestic companies may face difficulties in competing with foreign companies once the international trade barriers are removed. There is also the risk of brain drain and the environmental degradation that can follow in the wake of deregulation. Many developing third world countries, however, view economic liberalization as an approach for which there is no alternative.