Class 10 Economics Chapter 3 Assertion and Reason Questions - Understanding Economic Development

(i) Meanwhile, the company ’s customer care is carried out through call centres located in India.

(ii) And then have the components manufactured in China.

(iii) A large MNC, Producing industrial equipment, designs its products in research centres in the United States.

(iv) These are then shipped to Mexico and Eastern Europe where the products are assembled and the finished products are sold all over the world.

(i) A news magazine published for London readers is to be designed and printed in Delhi.

(ii) The designing is done on a Computer. After printing the magazines are sent by air to London.

(iii) The payment of money for designing and printing from a bank in London to a bank in Delhi is done instantly through the Internet (E-banking)

(iv) The text of the magazines is sent through is sent through Internet to the Delhi office The designers in Delhi office get orders on how to design the magazine from the office in London using telecommunication facilities.

Though WTO is supposed to allow free trade for all, in practice, it is seen that the developed countries have unfairly retained trade barriers. On the other hand, WTO rules have forced the developing countries to remove trade barriers. An example of this is the current debate on trade in agricultural products.

A news magazine published for London readers is to be designed and printed in Delhi. The text of the magazine is sent through the Internet to the Delhi office. The designers in the Delhi office get orders on how to design the magazine from the office in London using telecommunication facilities. The designing is done on a computer. After printing, the magazines are sent by air to London. Even the payment of money for designing and printing from a bank in London to a bank in Delhi is done instantly through the Internet (e-banking)!

Assertion (A) : The Indian government, after independence, had put barriers to foreign trade and foreign investment.Reason (R) : The government considered it necessary to protect the producers within the country from foreign competition.

Assertion (A) : The car manufacturing plant of Maruti Udyog Ltd in India produces cars for Indian markets.Reason (R) : It also exports cars to other developing countries and exports car components for its many factories around the world.

Assertion : Globalization leads to increased competition in international and domestic markets.Reason : Globalization also makes the consumers better off as they have a wider variety of goods to choose from at lower prices.

Assertion : The removal of barriers to trade is known as liberalization.Reason : federalization of trade allows businesses to freely decide which goods to import and export.

Assertion : A tax on imports makes the market for imported goods lucrative in terms of earning higher profits.Reason : Taxes are imposed to ensure smooth trade between nations and higher tax revenues for the governments of the countries.

Assertion : Rapid improvement in technology has been one major factor that has stimulated the globalization process.Reason : Developing countries are likely to become at par with developed countries in terms of technological development due to globalization.

Assertion : Foreign trade and foreign investment results in disintegration of production across countries.Reason : MNCs disrupt the production processes in domestic countries.

Assertion : Due to foreign trade, producers in different countries closely compete with each other.Reason : Foreign trade leads to similar prices of goods across boundaries, and the producers who do not offer competitive prices may lose the market share.

Assertion : Foreign trade creates an opportunity for the producers to reach beyond the domestic markets.Reason : Foreign trade expands the choice of goods beyond what is domestically produced.

Assertion : MNCs can exert a strong influence on production at distant locations.Reason : MNCs set up partnerships with local companies, use local companies for supplies, compete with local companies or buy them up.

Assertion : Local businesses may set up joint production processes with MNCs and earn higher profits.Reason : MNCs can provide money for additional investments, like buying new machines for faster production.

Assertion : Global production has a complex structure.Reason : Production of one good may take place in different parts of the world. For instance, an equipment may be formed by combining components produced in different countries.