Class 10 Economics Chapter 4 Previous Year Questions - Globalisation and the Indian Economy

Ans: Indian markets have been transformed since 1991 in the following ways: 
(1) We have a wider choice of goods and services before us.
(2) The latest models of digital cameras, mobile phones and televisions made by the leading manufacturers of the world are within our reach now. Example: New models of automobiles can be seen on Indian roads in every season.
(3) Today, Indians are buying goods produced by nearly all the top companies in the world. Example: An explosion of brands can be seen in the market for a variety goods, from shirts to televisions to processed fruit juices.
(4) Producers from any country can sell their produce in another country and hence, the markets are linked worldwide by trade and purchase. Example: Online shopping services such as amazon, flipkart etc.
(5) Enterprises are granted the liberty to freely choose what goods to import or export. It is suggested that the government is more liberal since it places far less limitations than it did previously.

Ans: The factors which have enabled globalisation in India are:  
(1) One significant factor in the rise of service production has been information technology (IT).
(2) Over the last 50 years, several improvements in technology have taken place. For instance, containers are increasingly utilised in transportation technology to move commodities. As a result, costs have significantly decreased and market share has increased.
(3) One of the main things that has accelerated the growth of globalisation is the rapid advancement of transportation. This has allowed for considerably cheaper and speedier long-distance transportation of commodities.
(4) Earlier trade barriers and limitations have been lifted by the Indian government. This made it possible to import and export products and services.

Ans: (a)
When a multinational corporation (MNC) works on joint production with a local company, a major benefit is that the MNC shares its latest technology with the local company. This helps improve the local company’s production processes and quality, making it more competitive. Therefore, option (a) is the correct answer, while the other options do not highlight the key advantage of technology transfer.

Ans:

• Some governments have set up Special Economic Zones with best facilities of electricity, water, etc.
• Companies who set up their units in SEZs don't need to pay taxes for the first five years.
• The government has allowed flexibility in labor laws so that the companies find it profitable.
• Companies can hire workers without the security of jobs, especially during periods of intense work pressure.
• The government provides various legal concessions to attract companies to invest in India.

Ans: (c)

The Indian government liberalized trade regulations in 1991 to help Indian producers compete in the global market. By reducing restrictions on imports and exports, it aimed to enhance the efficiency and competitiveness of Indian industries, enabling them to thrive in international trade. Therefore, option (c) is the correct answer, while the other options do not directly address the main goal of liberalization.

Ans: Information technology has fastened the pace of globalization. It has revolutionized the way interaction is done. Owing to its development, people can get connected to anyone, in every corner of the world, instantly. Except physical movement of products, every other transaction is possible through internet.
Without it, Globalisation w o u ld have taken many more years to spread out, as the required information for taking any decision, would have taken more time to be communicated and thus would have delayed the pace of integration among countries.

Ans: Removing barriers or restrictions set by the government is known as liberalisation. Liberalisation of foreign trade involves policy framework at national and international level. This statement can be described on the following grounds:
(i) Around 1991, some far reaching changes in policy were made in India. It felt that competition would improve the performance of producers within the country to improve their quality.
(ii) Barriers on foreign trade and foreign investment were removed to a large extent. This decision was supported by powerful international organisations.
(iii) This meant that goods could be imported and exported easily and also foreign companies could set up factories and offices in a particular country.
(iv) The government imposes much less restrictions than before and is therefore said to be more liberal.

Ans: In recent times, technology in the telecommunications, computer, and internet fields has been changing rapidly. Telecommunication facilities such as telegraph, telephone (including mobile phones), etc., are used to contact one another around the world, access information instantly, and communicate from remote areas. Information and communication technology has played a major role in spreading out the production of services across countries. For example, a news magazine published for London readers can be designed and printed in Delhi, with the text of the magazine sent through the internet to the Delhi office.

Ans: The Central and State governments have taken several measures to attract foreign companies to invest in India. Some of these steps include:

• Simplification of rules and regulations: The government has simplified the procedures and regulations related to foreign direct investment (FDI) in order to create a more business-friendly environment. This includes streamlining the approval process and reducing bureaucratic red tape.
• Incentives and benefits: The government offers various incentives and benefits to foreign companies, such as tax exemptions, subsidies, and financial assistance. These incentives are aimed at attracting investment and promoting economic growth.
• Infrastructure development: The government has focused on developing world-class infrastructure, including transportation, communication, and industrial facilities. This infrastructure development provides a conducive environment for foreign companies to set up their operations.
• Skill development and training: The government has prioritized skill development and training programs to enhance the employability of the workforce. This ensures that foreign companies have access to a skilled and qualified pool of talent.
• Sector-specific policies: The government has formulated sector-specific policies to attract foreign investment in key industries such as manufacturing, services, and technology. These policies provide clarity and guidance to foreign companies interested in investing in these sectors.

Overall, the Central and State governments have been proactive in creating a favorable investment climate to attract foreign companies to invest in India.

Ans: Globalisation and technology are intimately intertwined. The movement of people, goods and ideas is accelerated and broadened by new forms of transport and communication. Technological development is, in turn, enhanced by the diversity of ideas and the increased scale that comes from global reach.
Technology is the vital force in the modern form of globalisation. Technology has revolutionised the global economy and has become critical competitive strategy. Globalisation has led to new markets and information technologies fostered to the new market in this increasing competitive world.Technology hashelpedusinovercoming the major hurdles of globalisation and international trade such as trade barrier, lack of common ethical standard, transportation cost and delay in information exchange, thereby changing the market place. Technology has enabled the software experts to work collaboratively over the network with companies from around the world. Ex. Improvement in transportation technology made faster delivery of goods across long distance possible at lower costs.

Ans: 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. For a long time foreign trade has been the main channel connecting different countries. Integration of markets occur through foreign trade, when goods from the market of one country travels to the market of another country, thus connecting them. Since earlier times, foreign trade has been connecting the different countries. Early trade routes helped in connecting Asia to the rest of the world. These trade routes not only facilitated the movement of goods, but also the movement of people and ideas. Later on, trading interests attracted various trading companies such as the East India Company got attracted towards India. Thus, foreign trade creates opportunities for producers to reach beyond the domestic markets and compete in markets located in other countries of the world. Similarly, the buyers have more choices of goods, beyond domestically produced goods. With the opening of trade, goods travel from one market to another and choices of goods in the markets rises. Prices of similar goods in the two markets tend to become equal. And, producers in the two countries compete against each other even though they are separated by thousands of miles. Thus, foreign trade results in connecting the markets or integration of markets in different countries.

Ans: All WTO agreements contain special provisions for developing countries, including longer periods to implement agreements and commitments, measures to increase their trading opportunities and support to help them build the infrastructure for WTO work, handle disputes, and implement technical standards.

Ans: (i) While globalisation has benefited the well off consumers and also producers with skills, education and wealth, but many small producers and workers have suffered as a result of the rising competition.
(ii) Removal of trade barriers and liberalisation of the government to facilitate globalisation have hit the local producers and manufacturers hard.
(iii) Globalisation and the pressure of competition have substantially changed the lives of workers. Faced with growing competition most employers these days prefer to employ workers flexibly. This means that workers jobs are no longer secure. Example - Developed countries took resources from underdeveloped countries at cheap rate and exported costly finished products to underdeveloped countries

Ans: (a)
The correct answer is (a) I and II only. Factors contributing to globalization in India include improvements in transportation technology, which make it easier to move goods, and the liberalization of foreign trade and investment, which allows more foreign businesses to operate in India. However, the rules of the WTO do not necessarily favor India over developed countries, so option III is not correct.

Ans: (i) Countries like India exports raw material, food stuff and finished products through multinational companies to the other countries. Hence, MNCs a major force in connecting the countries of the world.
(ii) Foreign trade creates an opportunity for the producers to reach beyond the domestic markets, i.e., foreign countries.
(iii) For consumers there is a greater choice than before who enjoy improved quality and lower priced for several product

Ans: Tax on imports is an example of a trade barrier.

Ans: Globalisation is the trend of increasing interaction between people or companies on a worldwide scale due to advances in transportation and communication technology. However, it must be ensured that globalisation must benefit all the segments of the society only then it can be called fair globalisation. This can happen if we can ensure -
(i) Proper implementation of labour laws.
(ii) It must be ensured that the small businesses are adequately supported so that they do not lose out to large corporations.
(iii) As and when needed trade barriers must be applied to protect new sectors.
(iv) Our country must be able to join forces with other countries to fight domination of developed countries and negotiate with WTO for fair rules.

Ans: Globalisation has made a very positive effect on the ( Multi-National Corporations. The ways in which they have benefited are:
(i) MNCs have been able to set up production where it is close to the markets; where there is skilled and unskilled labour available at low costs; and where the availability oi other factors of production is assured.
(ii) MNCs also look for government policies that take care of their interests and thus they have been able to select beneficial bases for their business.
(iii) Because of the prev iling rules, MNCs have beer able to set up production jointly with local companies. The benefit to the local company can be in terms of capital and technology.
(iv) Because of globalisation the MNC’s have been able to bring better, safer, products to the people, that too at competitive prices.

Ans: (1) Improvement in transport technology has made faster delivery of goods across long distances at lower costs.
(2) Information and communication technology like computer, internet, and telecommunication has developed.
(3) Telephones (mobiles, fax) are used to contact one another.

Ans: (i) We have a wider choice of goods and services.
(ii) The latest models of digital cameras, mobile phones, and cars by the leading manufacturers of the world are available.
(iii) An explosion of brands can be seen for almost every good i.e., from shirts to televisions.

Ans: (i) It creates an opportunity for producers to reach beyond the domestic market, i.e., markets of their own countries.
(ii) Producers can sell their products in the markets of their own country as well as in Gather countries all over the world.
(iii) The producers can compete in the markets of other countries.
(iv) The buyers too have a choice between the goods produced in different parts of the world. It enables the consumer to buy according to his requirement.
(v) The competition among the producers brings them closer to each other.
(vi) Sometimes the producers of other countries set up joint ventures as AIG has set up a joint venture in the insurance sector and is selling their products in India.
(vii) Producers in two countries closely compete against each other even though they are separated by thousands of miles. Thus, foreign trade results in connecting the markets or integration of markets in different countries.

Ans: (a) Positive impact: 
(i) It has resulted in more choices for consumers to get various products of better quality and at lower prices.
(ii) It has improved the standard of living.
(iii) With the investments by the MNCs new jobs have been created in the developing countries.
(iv) New technology has been introduced.
(v) Large companies have become multi-national companies such as Infosys.
(b) Negative impact: 
(i) Creation of special economic zones has disrupted the lives of the people who have been displaced.
(ii) Flexibility in labour laws has worsened the condition of workers who may be appointed temporarily.
(iii) Small producers are unable to compete with MNCs. Thus, several units have been shut down rendering many workers jobless.

Ans: Multinational companies usually set up their offices and factories in regions (countries) where they get land, labour and raw materials at a cheaper rate. This makes them more competitive in the world market and can lead to greater profitability.

Ans: Investment by any person or entity is the money spent for buying building, land or other assets with a motive to earn a profit in future by selling it or in any other fashion. Foreign investment is any investment made by a foreign business entity such as a MNC, or an individual or a foreign government in India for buying assets with the motive to earn a profit from it.

Ans: Due to globalization, the latest models of different items are available within our reach.

Ans: (A) (i) The government had put restrictions on the import of goods to protect domestic producers from foreign competition.
(ii) The government allowed imports of only essential items such as machinery, fertilisers and petroleum. These restrictions helped to attain technological capability within the country.
(B) (i) Starting around 1991, the government wished to remove the barriers because India had attained technological capability.
(ii) The government decided that the time had come for Indian producers to compete with producers around the globe.
(iii) It felt that competition would improve the performance of producers within the country.
(iv) There would be an unrestricted exchange of capital, technology and experience between India and other countries of the world.

Ans: (i) Telecommunication facilities - telegraph, mobile phones, fax - are used to contact one another around the world and to communicate from remote areas.
(ii) This has been facilitated by satellite communication devices.
(iii) Computers have now entered almost every field of activity.
(iv) Internet allows us to send instant electronic mail (e-mail) and talk (voice mail) across the world at negligible costs.
(v) IT has played a major role in spreading out the production of services across countries. For example, for a magazine published for London readers different work is done as follows:
(a) Designing in Delhi.
(b) Orders how to design from London.
(c) Designing done on the computer.
(d) After printing sent to London by air.
(e) Payment through e-banking.

Ans: (i) MNCs set up production jointly with local companies.
(ii) MNCs buy up local companies to expand production.
(iii) MNCs in developed countries place orders for production with small producers of developing countries for various products such as garments, footwear etc. The MNCs sell these products under their brand name. MNCs determine price, quality, delivery and other conditions for these producers.

Ans: The improvement in technology has stimulated the globalisation process as:

There has been many improvements in transport technology in the recent years that have enabled faster delivery of goods across the world.

• Development of information technology in the areas of telecommunication like internet has revolutionised the world.
• Use of telegraph, mobiles, fax have enabled faster and easier access to information anywhere at any point of time.
• All these developments have further decreased the cost of their operations favouring the consumers around the world.
• It has opened up horizons for further advancement, research and development of existing means.

Ans: They removed the trade barriers to help the native industries and boost their trade by letting the foreign competition in the country’s market

Ans: Multinational Corporations (MNCs) exercise control on production in the following ways:

• By setting up their factories or production units close to markets where they can get desired type of skilled or unskilled labour at low cost along with other factors of production.
•  By collaborating with existing local companies of a country.
• By buying the local companies and then expand or control its production with the help of modern technology and capital.
•  By placing orders to small producers and selling these products under their own brand name to the customers worldwide.

Ans:

• By buying local companies and, then expanding production. For example, Cargill Foods, a very large American MNC, purchased small Indian company, Parakh foods. Cargill Foods is, now, the largest producer of edible oil in India with a capacity making 5 million pouches daily.
•  By placing orders for production with small producers. Garments, footwears, sports items are examples where production is carried out by small producers for large MNCs around the world.
•  By producing jointly with some of the local companies. It benefits the local company in two ways.

1. A MNC can provide money for additional investments.
2. A MNC can bring latest technology for production.

For example, Ford Motors set up a large plant near Chennai, in collaboration with Mahindra and Mahindra, a major Indian manufacturer of jeeps and trucks.