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CBSE Solutions Class 10 Social Science Economics Globalisation and the Indian Economy
Page No. 72
Excercises
Q1. What do you understand by globalisation? Explain in your own words.
Answer: Globalisation means integrating an economy with the world economy. It encourages foreign trade, and foreign investment which leads to integration of production and markets across countries. Rapid improvement in technology has been one major factor that has stimulated the globalisation process. As a result of globalisation, it has become easier to move between countries. MNCs are playing a major role in the globalisation process.
More and more goods and services, investments and technology are moving. between countries. Most regions of the world are in closer contact with each other than a few decades back.In short, we can say that globalisation has made possible the interconnection between countries. As a result of globalisation, different countries of the world have become economically interdependent on each other.
Q2. What was the reason for putting barriers to foreign trade and foreign investment by the Indian government? Why did it wish to remove these barriers?
Answer: The Indian government had put barriers to foreign trade and foreign investment to protect domestic producers from foreign competition, especially when industries had just begun to come up in the 1950s and 1960s. At this time, competition from imports would have been a death blow to growing industries. Hence, India allowed imports of only essential goods.
In New Economic Policy in 1991, the government wished to remove these barriers because it felt that domestic producers were ready to compete with foreign industries. It felt that foreign competition would in fact improve the quality of goods produced by Indian industries. This decision was also supported by powerful international organisations.
Q3. How would flexibility in labour laws help companies?
Answer: Flexibility in labour law helps companies because it helps to attract foreign investments. Instead of hiring workers on a regular basis, companies hire workers flexibly for short periods when there is intense pressure of work. This is done to reduce the cost of labour for the company. However, still not satisfied, foreign companies are demanding more flexibility in labour laws. The competition in the market is increasing each day, and if the Government does not allow flexibility with these laws, the foreign companies will not be able to reach their desired profit levels.
Q4. What are the various ways in which MNCs set up, or control, production in other countries?
Answer: The various ways in which MNCs set up, or control, production in other countries are by buying out domestic companies or making the latter work for them. Sometimes, MNCs buy mass produce of domestic industries, and then sell it under their own brand name, at much higher rates, in foreign countries. MNCs look towards developing nations to set up trade because in such places, the labour and manufacturing costs are much lower.
Q5. Why do developed countries want developing countries to liberalise their trade and investment? What do you think should the developing countries demand in return?
Answer: Developed countries want developing countries to liberalise their trade and investment because then the MNCs belonging to the developed countries can set up factories in less-expensive developing nations, and thereby increase profits, with lower manufacturing costs and the same sale price. In my opinion, the developing countries should demand, in return, for some manner of protection of domestic producers against competition from imports. Also, charges should be levied on MNCs looking to set base in developing nations.
Q6. “The impact of globalisation has not been uniform.” Explain this statement.
Answer: Globalization has not had a uniform impact.” It has benefited only trained and professional people in cities, not the unskilled. Globalization has benefited the industrial and service sectors far more than agriculture. It benefited multinational corporations at the expense of domestic producers and the industrial working class. Competition from cheaper imports has affected small producers of goods including batteries, capacitors, plastics, toys, tyres, dairy products, and vegetable oil.
Q7. How has liberalisation of trade and investment policies helped the globalisation process?
Answer: Liberalization of trade and investment policies:
(i)Large MNCs in developed countries place orders for production with small producers. Garments, footwear, sports items are examples of industries where production is carried out by a large number of small producers around the world.
(ii)The products are supplied to the MNCs. But MNCs sell them under their own brand names to the customers. These large MNCs have tremendous power to determine price, quality, delivery and labour conditions for these distant producers.
(iii)MNCs investment is to buy up local companies and then to expand their production. MNCs with huge wealth, can quite easily do so. USA and other developed countries of the west are extending full support to them.
Q8. How does foreign trade lead to integration of markets across countries? Explain with an example.
Answer: Foreign trade provides opportunities for both producers and buyers to reach beyond the markets of their own countries. Goods travel from one country to another.Competition among producers of various countries as well as buyers prevails. Thus foreign trade leads to integration of markets across countries.
For example, during Diwali season, buyers in India have the option of choosing between Indian and Chinese decorative lights and bulbs. So this provides an opportunity to expand business.
Q9. Globalisation will continue in the future. Can you imagine what the world would be like twenty years from now? Give reasons for your answer.
Answer: Globalisation will continue in the future as well. Twenty years from now, the production of goods will be more efficient, competition in the market will increase, advancement in every field will be evident and the quality and quantity of goods produced will also increase. Small industries and entrepreneurs will increase as more opportunities will be provided to them.
Q10. Supposing you find two people arguing: One is saying globalisation has hurt our country’s development. The other is telling, globalisation is helping India develop. How would you respond to these organisations?
Answer: Globalisation has hurt our country’s development because: firstly, it has led to the annihilation of small producers who face stiff competition from cheaper imports. Secondly, workers no longer have job security and are employed “flexibly”.
Globalisation is helping India develop on account of the following reasons: firstly, the competition it entails has led to rise in the quality of products in the market. Secondly, it has made available a wider variety of goods in the market, for the buyer to choose from. Now, imported goods are easily available alongside domestic products.
Q11. Fill in the blanks.
Indian buyers have a greater choice of goods than they did two decades back. This is closely associated with the process of (1)___________ . Markets in India are selling goods produced in many other countries. This means there is increasing (2)___________ with other countries. Moreover, the rising number of brands that we see in the markets might be produced by MNCs in India. MNCs are investing in India because
(3) .________________ While consumers have more choices in the market, the effect of rising (4) __________and (5)___________ has meant greater (6) __________among the production
Answer:
(1) globalisation
(2) cooperation foreign
(3) it has been beneficial for them
(4) investment
(5) foreign trade
(6) competition
Q12. Match the following.
| (i) MNCs buy at cheap rates from small (ii) Quotas and taxes on imports are used to regulate trade items (iii) Indian companies who have invested abroad (iv) IT has helped in spreading of production of services (v) Several MNCs have invested in setting up factories in India for production | (a) Automobiles producers (b) Garments, footwear, sports (c) Call centres (d) Tata Motors, Infosys, Ranbaxy (e) Trade barriers |
Answer:
| (i) MNCs buy at cheap rates from small (ii) Quotas and taxes on imports are used to regulate trade items (iii) Indian companies who have invested abroad (iv) IT has helped in spreading of production of services (v) Several MNCs have invested in setting up factories in India for production | (b) Garments, footwear, sports items (e) Trade barriers (d) Tata Motors, Infosys, Ranbaxy (c) Call centres (a) Automobiles producers |
Q13. Choose the most appropriate option.
(i) The past two decades of globalisation has seen rapid movements in
(a) goods, services and people between countries.
(b) goods, services and investments between countries.
(c) goods, investments and people between countries.
Answer: (b) goods, services and investments between countries.
(ii) The most common route for investments by MNCs in countries around the world is to
(a) set up new factories.
(b) buy existing local companies.
(c) form partnerships with local companies.
Answer: (b) buy existing local companies.
(iii) Globalisation has led to improvement in living conditions
(a) of all the people
(b) of people in the developed countries
(c) of workers in the developing countries
(d) none of the above
Answer: (d) none of the above
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