Unit Test (Solutions): Globalisation and the Indian Economy | Social Studies (SST) Class 10 PDF Download

Time: 1 hour      

M.M.: 30

Instructions: Attempt all questions.
Question numbers 1 to 5 carry 1 mark each.
 Question numbers 6 to 8 carry 2 marks each.
 Question numbers 9 to 11 carry 3 marks each.
 Question numbers 12 & 13 carry 5 marks each.

Q1. What is the main motive of Multinational Corporations (MNCs)? (1 Mark)

a) Cultural exchange
b) Promoting small industries
c) Maximising profits
d) Encouraging traditional methods

Ans: c) Maximising profits

The primary motive of MNCs is to maximise profits by expanding their operations internationally. Options a, b, and d are not the main goals of MNCs.

Q2. Which organisation aims to liberalise international trade? (1 Mark)

a) UNO
b) WHO
c) WTO
d) IMF

Ans: c) WTO

The World Trade Organization (WTO) is specifically designed to promote and regulate international trade liberalisation. The other options do not primarily focus on trade.

Q3. What does foreign investment mean? (1 Mark)

a) Investment in agriculture
b) Investment in local banks
c) Investment made by an MNC in another country
d) Savings in a foreign country

Ans: c) Investment made by an MNC in another country

Foreign investment refers to capital invested by a multinational corporation (MNC) in a country other than its home country. Options a, b, and d do not accurately define foreign investment.

Q4. Name any one factor that enabled globalisation. (1 Mark)
Ans: One factor that enabled globalisation is rapid improvements in technology.

• Advancements in transportation have allowed faster delivery of goods.
• Use of containers has reduced costs and increased efficiency in shipping.
• Declining costs of air transport have boosted the volume of goods transported.
• Improvements in information and communication technology have enhanced global production coordination.
• The liberalisation of trade has removed barriers, facilitating easier international trade.

Q5. Define globalisation in simple terms. (1 Mark)
Ans: Globalisation is the process of countries becoming more connected and interdependent. It involves:

• Increased trade between nations, allowing goods and services to flow more freely.
• Foreign investment by multinational corporations (MNCs) in various countries.
• Greater integration of markets, leading to a more interconnected global economy.

Q6. What is meant by foreign trade? Mention any one benefit of foreign trade to producers. (2 Marks)
Ans: Foreign trade refers to the exchange of goods and services between countries. It allows producers to sell their products beyond their own national markets.

• Producers can access a larger customer base, increasing their sales opportunities.
• It enables competition with international brands, which can lead to better quality products.
• Consumers benefit from a wider variety of goods at potentially lower prices.

One significant benefit of foreign trade to producers is:

• Increased market access: Producers can sell their goods in foreign markets, enhancing their revenue and growth potential.

Q7. What is a Special Economic Zone (SEZ)? State one reason why SEZs are set up in India. (2 Marks)
Ans: Special Economic Zones (SEZs) are designated areas within a country that have different economic regulations than the rest of the country. These zones are created to attract foreign investment and boost economic growth.

• SEZs offer tax incentives to businesses, such as tax holidays for a specified period.
• They provide world-class infrastructure, including facilities for transport, utilities, and services.
• SEZs aim to create employment opportunities and promote exports.

One reason SEZs are set up in India is to encourage foreign investment, which can lead to economic development and job creation.

Q8. Why do MNCs set up their offices and factories in certain locations only? Mention two factors. (2 Marks)
Ans: Multinational corporations (MNCs) establish their offices and factories in specific locations due to several key factors:

• Proximity to Markets: MNCs prefer locations that are close to their target markets, allowing for quicker distribution and reduced transportation costs.
• Cost of Labour: Access to skilled and unskilled labour at lower wages is crucial for MNCs, as it helps to keep production costs down.

Additionally, MNCs consider the availability of other production factors and favourable government policies that support their operations.

Q9. Explain any three ways in which MNCs spread their production and interact with local producers. (3 Marks)
Ans: Multinational corporations (MNCs) spread their production and interact with local producers in several ways:

• Outsourcing Production: MNCs often place orders with small local producers for manufacturing goods, such as garments and sports items. This allows them to benefit from lower production costs.
• Global Supply Chains: MNCs design products in one country, source components from another, and assemble them in yet another location. For example, an MNC may design equipment in the US, manufacture parts in China, and assemble the final product in Mexico.
• Partnerships with Local Firms: By collaborating with local companies, MNCs can efficiently source materials and services, while also enhancing their market presence and competitiveness.

Q10. State any three impacts of globalisation on Indian consumers. (3 Marks)
Ans: Impacts of Globalisation on Indian Consumers

• Increased Choice: Consumers now have access to a wider variety of products from both local and international brands, enhancing their shopping experience.
• Improved Quality: Competition among producers has led to better quality goods, as companies strive to attract consumers.
• Lower Prices: The influx of global brands has resulted in competitive pricing, making products more affordable for consumers.

Q11. Why are small producers in India facing difficulties due to globalisation? Give any three reasons. (3 Marks)
Ans: Small producers in India are facing significant challenges due to globalisation for several reasons:

• Increased Competition: Small producers struggle against larger, more efficient companies, both local and international, which can offer lower prices.
• Access to Resources: Many small producers lack essential resources such as credit, modern technology, and infrastructure, making it difficult to compete.
• Market Dynamics: Globalisation has led to a shift in consumer preferences, often favouring imported goods over locally produced items, further impacting small producers.

Q12. Explain any five factors that have enabled globalisation in recent years. (5 Marks)
Ans: Five factors that have enabled globalisation in recent years:

• Technological Advancements: Rapid improvements in technology, especially in information and communication, have made it easier to connect and conduct business globally.
• Transportation Improvements: Enhanced transportation methods, such as container shipping and reduced air freight costs, have significantly lowered the cost and time of moving goods across borders.
• Liberalisation of Trade: The removal of trade barriers and restrictions has facilitated easier access to international markets, allowing countries to trade more freely.
• Investment Opportunities: Increased foreign direct investment (FDI) has enabled multinational corporations (MNCs) to establish operations in various countries, boosting economic integration.
• Global Networks: The rise of global supply chains has interconnected producers and consumers worldwide, allowing for efficient production and distribution of goods.

Q13. What is WTO? What are its objectives? Explain with examples how WTO rules are often unfair to developing countries. (5 Marks)
Ans: World Trade Organisation (WTO) is an international body aimed at promoting and regulating free trade among countries. Established through the initiative of developed nations, it sets rules for global trade and ensures compliance among its approximately 160 member countries. Despite its goal of fostering free trade, the WTO's rules often favour developed countries, leading to unfair practices against developing nations. Key points include:

• Trade Barriers: Developed countries maintain trade barriers while pressuring developing nations to eliminate theirs.
• Subsidies: For example, US farmers receive substantial government subsidies, allowing them to sell products at lower prices, which undermines farmers in developing countries.
• Disparity in Agriculture: In India, agriculture represents a significant portion of GDP and employment, unlike in the US, where it contributes minimally. This disparity highlights the unfair advantage held by developed nations.

Such practices raise questions about the fairness of global trade, as developing countries argue that they comply with WTO regulations while developed nations do not.