Social Science Class 10 Important Questions Economics Chapter 4 Globalisation and the Indian Economy Class 10 Important Questions

Question 1.
What are Multi-National Corporations (MNCs)?
Year of Question:(2011 D)

Answer: A Multi-National Corporation (MNC) is a company that owns or controls production in more than one nation. The goods and services are produced globally. The production process is divided into small parts and spread out across the globe

Question 2.
Explain what is investment? Give a few examples of investment?
Year of Question:(2014 D)

Answer: Investment is buying of an asset in the form of a factory, a machine, land and building, etc. (Physical assets) or shares (monetary assets) for the purpose of making or sharing profits of the enterprises concerned Common investments are: buying land, factories, machines for faster production, buying small local companies to expand production, cheap labour, skilled engineers, IT personnel, etc

Question 3.
In which year did the government decide to remove barriers on foreign trade and investment in India?
Year of Question:(2011 D)

Answer: 1991

Question 4.
Why is tax on imports known as a trade barrier?
Year of Question:(2011 OD)

Answer: Tax on imports is known as a trade barrier because it increases the price of imported commodities. It is . called a barrier because some restriction has been set up

Question 5.
Which organization lays stress on liberalization of foreign trade and foreign investment?
Year of Question:(2014 D)

Answer: World Trade Organization (W.T.O)

Question 6.
Give one characteristic feature of a Special Economic Zone?
Year of Question:(2014 D)

Answer: Special Economic Zones or SEZs are industrial zones set up by the government having word class facilities such as electricity, water, roads, transport, storage, recreational and educational facilities. Companies who set up production units in SEZs are exempted from taxes for an initial period of five years

Question 7.
Name an important barrier on foreign trade?
Year of Question:(2013 OD)

Answer: Tax on imports is an important barrier on foreign trade

Question 8.
What is meant by "fair globalization?
Year of Question:(2013 OD)

Answer: Fair globalization means globalization that would create opportunities for all and ensure that its benefits are shared better

Question 9.
What do you understand by the term Foreign Direct Investment?
Year of Question:(2014 D)

(2014 OD)

Answer: FDI is the investment of foreign capital in the economic and productive activities of a country by foreign companies or MNCs with the aim of expanding capacity and production to earn profits

Question 10.
Why had the Indian Government put barriers to foreign trade and foreign investment after independence? State any one reason?
Year of Question:(2015 D)

Answer: The Indian government after independence had put barriers to foreign trade and investment

• This was done to protect the producers within the country from foreign competition
• To protect the Indian economy from foreign infiltration in industries affecting the economic growth of the country as planned

Question 11.
What is meant by trade barrier?
Year of Question:(2015 OD)

Answer: Barriers or restrictions that are imposed by the government on free import and export activities are called trade barriers. Tax on imports is an example of a trade barrier because it increases the price of imported . commodities. The government can use a trade barrier like tax to increase or decrease (regulate) foreign trade and to decide what kind of goods and how much of what should come into the country

Question 12.
Differentiate between investment and foreign investment?
Year of Question:(2016 D)

Answer: The money that is spent to buy assets (land, building, machines and other equipments) is called investment, while the investment made by the MNCs is called foreign investment

Question 13.
Why do MNCs set up their offices and factories in those regions where they get cheap labour and other resources?
Year of Question:(2014 D)

Answer: MNCs set up offices and factories for products in regions where they can get cheap labour and other resources so that

• the cost of production is low
• the MNCs can earn greater profits

Short Answer Questions (SA) 3 Marks

Question 14.
Explain the role of government to make globalization fair?
Year of Question:(2011 D)

Answer: The government can play a major role in making fair globalization possible: Fair globalization would create opportunities for all, and also ensure that the benefits of globalization are shared better. Government policies must protect the interests not only of the rich and the powerful, but also of all the people in the country

• Government should ensure that labour laws are implemented and workers rights are protected
• Government should support small producers to improve their performance till the time they become strong enough to compete with foreign competition
• If necessary, government should use trade and investment barriers
• It can negotiate with WTO for fairer rules
• It can also align with other developing countries with similar interests to fight against the domination of developed countries in the WTO

Question 15.
Explain any three advantages of globalization?
Year of Question:(2011 D)

Answer: Globalization means integrating the economy of the country with the world economy

• Under this process, goods and services along with capital, resources and technology can move freely from one nation to another
• It has increased the movement of people between countries. People usually move from one country to another in search of better income, better jobs or better education. Earlier the movement of people between countries was less due to various restrictions
• Rapid improvement in technology has been one major factor that has stimulated the globalization process. For instance, advancement in transportation technology has made much faster delivery of goods across long distances possible at lower costs. Container services have led to huge reduction in port handling costs. The cost of air transport has fallen which has enabled much greater volumes of goods being transported by airlines
• Developments in information and communication technology (IT in short) has brought a revolution in telecommunications. It has made e-banking, e-commerce, e-leaming, e-mail and e-governance a reality
• Globalization has resulted in greater competition among producers and has been of advantage to consumers, particularly the well-off section. Rich people now enjoy improved quality and lower prices for several products

Question 16.
What is a trade barrier? Why did the Indian Government put up trade barriers after Independence? Explain?
Year of Question:(2011 D)

Answer: The restrictions set by the Government to regulate foreign trade are called trade barriers. Tax on imports is an example of a trade barrier. The Indian Government had put barriers to foreign trade and foreign investment after independence to protect the domestic producers from foreign competition. Imports at that stage would not have allowed local industries to come up. India allowed imports of only essential items such as machinery, fertilizers, petroleum, etc

Question 17.
What would happen if Government of India puts heavy tax on import of Chinese toys? Explain any three points?

(2012 D)

Answer: If Government of India puts heavy tax on import of Chinese toys

• The cost of Chinese toys will increase
• Less Chinese toys would come in the Indian market
• Indian buyers would have lesser choice in the market and toys will become more expensive
• For Indian toy makers this would provide an opportunity to expand business as there will be less competition in the market

Question 18.
How do Multinational Companies manage to keep the cost of production of their goods low? Explain with examples?
Year of Question:(2013 D)

Answer:

• MNCs set up offices and factories for production in regions where they can get cheap labour and other resources. Example, Countries like China, Bangladesh and India. They also provide with the advantage of cheap manufacturing locations
• MNCs also need close-by markets for their manufacturing goods. Mexico and Eastern Europe are useful for their closeness to the markets in the US and Europe
• Besides these, MNCs also require skilled engineers and IT personnel and a large number of English speaking people who are able to provide customer care services (India possibly tops in this area)
• All these factors help MNCs in saving costs of production by 50-60%

Question 19.
How do we participate in the market as producers and consumers? Explain with three examples?
Year of Question:(2014 D)

Answer: We participate in the market both as producers and consumers

• As producers of goods and services we could be working in any of the sectors like agriculture, industry or services. For example, a farmer who sells wheat to a flour mill. The man at the mill grinds the wheat and sells the flour to a biscuit company. The biscuit company uses flour, sugar and oil to make packets of biscuits. It sells the biscuits in the market to the consumer. Biscuits are the final goods, i.e., the goods that reach the consumer and people as consumers buy
• We as producers in the market could be made to sell the produce to the moneylender at a low rate in return for a timely loan. For example, in case of small farmers; the failure of crops often makes loan repayment impossible. They have to sell a part of their land to repay the loans
• As consumers we participate in the market when we purchase goods and services that we need. As individual consumers we often find ourselves in a weak position. Whenever there is a complaint regarding a good or service that had been bought, the seller tries to shift all the responsibility on to the buyer. For example, a long battle had to be fought with court cases to make cigarette manufacturing companies accept that their product could cause cancer

Question 20.
How are local companies benefitted by collaborating with multinational companies? Explain with examples?
Year of Question:(2013 OD)

Answer: When local companies enter into a joint venture with MNCs

• First, the MNCs provide money for additional investments for faster production
• Second, MNCs bring with them the latest technology for enhancing and improving the production
• Some Indian companies have gained from successful collaborations with foreign companies Globalization has enabled some companies to emerge as multinationals
• Parakh Foods was a small company which has been bought over by a large American Company - Cargill Foods. Parakh foods had built a large marketing network in various parts of India as a well- reputed brand. Parakh Foods had four oil refineries whose control has now shifted to Cargill. Cargill is now the largest manufacturer of edible oil in India making five million pouches daily

Question 21.
How has foreign trade been integrating markets of different countries in the world? Explain with examples?
Year of Question:(2012 D)

Answer:

• Foreign trade creates opportunities for producers to reach beyond domestic markets. Producers can compete in markets located in other countries of the world. Similarly, for the buyers, import of goods from another country leads to expanding choice of goods beyond what is domestically produced. Buyers can thus choose from a wide range of products to suit their individual tastes
• With the opening of trade, goods travel from one market to another. Choice of goods in the market rises. Prices of similar goods in two markets tend to become equal, and producers in the two countries now closely compete against each other even though they are separated by thousands of miles. Foreign trade, thus, results in connecting the markets or integration of markets in different countries
• For example., There are endless number of footwear brands available in the Indian market. A consumer who is aware of international trends can choose between a local brand like Bata, Lakhani and international brands like Adidas, Nike, Reebok etc

Question 22.
Define the term liberalization. Explain the reasons why the Indian Government started the policy of liberalization in 1991?
Year of Question:(2014 D)

Answer: Removing barriers or restrictions set by the government on foreign trade and foreign investment is what is known as liberalization. The Indian Government removed these barriers because

• Liberalization of trade and investment policies allows Indian producers to compete with producers around the globe leading to an improvement in performance and quality of products
• After the barriers on foreign trade and foreign investment were removed to a large extent, goods could be imported and exported easily and also foreign companies could set up factories and offices in India. This has led to an increase in trade with different countries
• Businesses are allowed to make decisions freely about what they wish to import or export due to the liberal policies of the government
• Doors of investment opened up for MNCs. They have been investing large sums of money in India and have been seeking to earn large profits

Question 23.
How has information and communication technology stimulated globalisation process? Explain with examples?
Year of Question:(2014 D)

Answer: Information and communication technology has helped globalisation in the following ways

• Rapid improvement in technology has contributed greatly towards globalisation. Advanced technology in transport systems has helped in the delivery of goods faster across long distances at lower costs
• Development in information and communication technology has also helped a great deal. Telecommunication facilities - telegraph, telephone, mobile phones, fax are used to contact one another quickly around the world, access information instantly and communicate from remote areas. This is possible due to satellite communication devices. Teleconferences help in saving frequent long trips across the globe
• Information technology has also played an important role in spreading out production of services across countries. Orders are placed through internet, designing is done on computers, even payment of money from one bank to another can be done through e-banking through internet. Internet also allows us to send instant electronic mail (e-mail) and talk (voice-mail) across the world at negligible cost

Question 24.
Why had Indian government put barriers to foreign trade and foreign investment after independence? Explain?
Year of Question:(2014 D)

Answer:

• The Indian government after independence had put barriers to foreign trade and investment. This was done to protect the producers within the country from foreign competition. Industries were just coming up in the 1950s and 1960s and competition from imports at that stage would not have allowed these industries to develop and grow. Imports of only essential items such as machinery, fertilisers, petroleum etc. was allowed
• Another reason was to protect the Indian economy from foreign infiltration in industries affecting the economic growth of the country as planned. India wanted to move faster to catch up with the main industries in the world market and therefore had to keep an extra watch on its progress in international trade and give incentives to the more rapidly growing industries through fiscal tariff and other means

Question 25.
How are MNCs able to cope with large demands from all over the ivorld and control prices?
Year of Question:(2014 D)

Answer:

• Large MNCs in developed countries place orders for production with small producers
• The MNCs sell these under their own brand names to the customers
• As they control the market with the huge demand, they are able to control prices

Question 26.
"A wide ranging choice of goods are available in the Indian markets." Support the statement with examples in context of globalisation?
Year of Question:(2016 D)

Answer: Globalisation has led to integration of markets across countries. The Indian markets are now flooded with a wide ranging choice of goods. Import from other countries has led to an expanding choice of goods beyond what is domestically produced

• We have a wide variety of goods and services before us in the market
• The latest models of digital cameras, mobile phones and televisions made by leading manufacturers of the world like Sony, Samsung etc. are available in the market
• Every season, new models of automobiles can be seen on Indian roads. Today Indians are buying cars produced by nearly all the top companies in the world
• A similar explosion of brands can be seen for many other goods like footwear. For example, Adidas, Nike, Reebok, Puma and many more

Question 27.
In spite of Globalization, creating good quality products and expanding market, how is it affecting the stability in jobs for the workers?
Year of Question:(2014 OD)

Answer:

• Employment of flexible workers
• Increased competition, objective to lower costs, the axe falls on the labour costs-temporary jobs given
• Longer working hours for labour to get suitable salaries

Question 28.
Examine any three conditions which should be taken care of by multinational companies to set up their production units?
Year of Question:(2017 D)

Answer: Conditions

• MNCs set up offices and factories for production in regions where they can get cheap labour and other resources. Example, Countries like China, Bangladesh and India. They also provide with the advantage of cheap manufacturing locations
• MNCs also need close-by markets for their manufacturing goods. Mexico and Eastern Europe are useful for their closeness to the markets in the US and Europe
• Besides these, MNCs also require skilled engineers and IT personnel and a large number of English speaking people who are able to provide customer care services (India possibly tops in this area)
• All these factors help MNCs in saving costs of production by 50-60%

Question 29.
How do Multi-National corporations (MNCs) interlink production across countries? Explain with examples?
Year of Question:(2017 D)

Answer: MNCs set up production in various countries based on the following factors

• MNCs set up offices and factories for production in regions where they can get cheap labour and other resources; eg., in countries like China, Bangladesh and India. These countries also provide with the advantage of cheap manufacturing locations
• At times, MNCs set up production jointly with some of the local companies of countries around the world. The benefit of such joint production to the local company is two-fold. First, the MNCs can provide money for additional investments for faster production. Secondly, the MNCs bring with them the latest technology for enhancing and improving production
• Some MNCs are so big that their wealth exceeds the entire budgets of some developing countries. This is the reason why they buy up local companies to expand production. eg. Cargill Foods, a very large American MNC has bought over smaller Indian companies such as Farakh Foods
• There is another way in which MNCs control production and that is by placing orders for production with small producers in developing nations; eg., garments, footwear, sports items etc. The products are supplied to these MNCs which then sell these under their own brand name to customers. MNCs also enter into close competition with local companies thereby influencing production in distant locations

Long Answer Questions 5 Marks

Question 30.
Give the meaning of WTO? What is the major aim of WTO?
Year of Question:(2014 D)

Answer: WTO (World Trade Organization). WTO believes that there should not be any barriers between trade of different countries. Trade between countries should be free. Aims of WTOM

• To liberalize international trade
• To establish rules regarding international trade. Two shortcomings of WTO
• Though WTO is supposed to allow free trade for all, in practice, it is seen that the developed countries have unfairly retained trade barriers and continued to provide protection to their producers. For example, farmers in the US receive huge sums of money from the government and as a result can sell the farm products at abnormally low prices in other countries, adversely affecting farmers in those countries
• On the other hand WTO rules have forced the developing countries to remove trade barriers

Question 31.
What is globalization? Explain with three examples how top Indian companies have benefitted from globalization?
Year of Question:(2011 D)

Answer: Globalization is the process of rapid integration or interconnection among countries. It is the integration between countries through foreign trade and foreign investments by multinational corporations. It means the coming together of various economies of the world to form a global economy. The top Indian companies have benefitted from the increased competition and globalization

• They have invested in new technology and production methods and raised their production standards
• Some have gained from successful collaborations with foreign companies
• Moreover, globalization has enabled some large Indian companies to emerge as multinationals themselves. For example, Tata Motors, Infosys, Ranbaxy, Asian Paints, Sundaram Fasteners etc

Question 32.
What is an MNC? Give two examples of Indian companies that have emerged as MNCs. What are the harmful effects of MNCs to a host country? Give three examples?
Year of Question:(2012 OD)

Answer: A Multi-National Corporation (MNC) is a company that owns or controls production in more than one nation. The goods and services are produced globally. The production process is divided into small parts and spread out across the globe. Tata Motors (automobiles), Infosys (IT), Ranbaxy (medicines), Asian Paints (paints), Sundaram Fasteners (nuts and bolts), etc. are some of the Indian companies which are spreading their operations worldwide as MNCs. Harmful effects of MNCs to a host country

• Small producers compete or perish. MNCs have posed major challenges for a large number of small producers and workers. The small manufacturers have been hit hard due to competition. Several of the units have shut down rendering many workers jobless. Batteries, taps, tyres, dairy-products, vegetable oil are some of the industries that are badly affected due to stiff competition from MNCs
• Uncertain employment. In order to maximize the profit MNCs look for a location with minimum labour costs. Faced with competition, most employers these days prefer to employ workers on temporary basis so that they do not have to pay workers for the whole year. This has changed the lives of workers and their jobs are no longer secure
• The Condition of employment. Workers also have to put in very long working hours and work night shifts on a regular basis during the peak season. Wages are low and workers are forced to work overtime to make both ends meet. The workers are denied their fair share of benefits and no longer get the protection that they enjoyed earlier, for example, the Indian garment export industry often deny their workers their fair share of benefits

Question 33.
How has globalization been advantageous to both the producers as well as the consumers in India? Explain?
Year of Question:(2012 D)

Answer: To Producers. Several of the top Indian Companies have been able to benefit from the increased competition

• They have invested in newer technology and production methods and thereby raised their production standards
• They have gained from successful collaborations with foreign companies
• Globalization helped in the development of IT sector
• Good quality products are being produced at lower prices. To Consumers. There is greater choice before consumers who can enjoy improved quality and lower prices for several products
• People today, enjoy much higher standards of living than was possible earlier

Question 34.
How has globalization benefitted India? Explain with five examples?
Year of Question:(2013 OD)

Answer: Globalization has benefitted India in the following ways: 1. People with education, skill and wealth have benefitted by globalization

• Greater competition among producers (both local and foreign) has been advantageous to consumers, particularly the well-off section. Rich people enjoy improved quality at lower prices for several products and enjoy a higher standard of living
• MNCs have increased their investments in India over the past 20 years in industries such as cell phones, automobiles, electronics, soft drinks, fast food and services such as banking.
• New jobs have been created in all these industries and services
• Top Indian companies have benefitted from the increased competition. They have invested in newer technology and production methods
• Some Indian companies have gained from successful collaborations with foreign companies. Globalization has enabled some companies to emerge as multinationals

Question 35.
How is the Government of India trying to attract more foreign investment? Explain with examples?
Year of Question:(2013 D)

Answer: In order to attract foreign investment, the Government has taken the following steps

• All the barriers and restrictions on foreign trade and investment have been removed to a large extent
• Liberalization of investment policies has allowed Indian producers to compete with the producers around the globe
• Allowing privatization of many public sector industries by the government
• Allowing businesses to make decisions freely about what they wish to import or export
• The government has allowed flexibility in labour laws to attract foreign investment for the benefit of companies

Question 36.
What is the meaning of SEZ? Mention any three features of SEZ. ?
Year of Question:(2011 D)

Answer: SEZ or Special Economic Zones are industrial zones set up by the Central and State Governments with world class facilities in electricity, water, roads, transport, storage, recreational and educational facilities. Three features of SEZ

• The companies who set up production units in the SEZs do not have to pay taxes for an initial period of five years
• Government has also allowed flexibility in the labour laws to attract foreign investment. This is done to reduce the cost of labour for the company
• These are being set up to attract foreign companies to invest in India

Question 37.
"Advancement of international trade of a country is an index of its economic prosperity." Justify the statement with five arguments. ?
Year of Question:(2013 OD)

Answer: "Advancement of international trade of a country is an index to its economic prosperity"

• As no country is self-sufficient in all resources, it cannot survive without international trade
• If the balance of international trade is favourable, a country will be able to earn more foreign exchange
• International trade encourages a country to develop secondary and tertiary sectors for exporting goods which can fetch more foreign exchange
• A countrys economic prosperity can be gauged by the health of its international trade
• A country can earn large amounts of foreign exchange through international trade

Question 38.
Explain the role of multinational corporations in the globalization process?
Year of Question:(2014 D)

Answer: Globalization is the process of rapid integration or inter-connection among countries. MNCs have contributed greatly in the process of globalisation

• MNCs have set up production centres in various countries and are supplying produced goods, services and technology to various countries
• The countries of the world have come closer. It has also increased the movement of people between countries
• The MNCs provide money for additional investments, for faster production. Also, MNCs bring with them the latest technology for enhancing and improving the production

Question 39.
How has improvement in technology stimulated the globalization process? Explain with five examples?
Year of Question:(2013 OD)

Answer: Improvements in technology have helped in globalization in the following ways

• Rapid improvement in technology has contributed greatly towards globalization. Advanced technology in transport systems has helped in the delivery of goods faster across long distances at lower costs
• Development in information and communication technology has also helped a great deal. Telecommunication facilities-telegraph, telephone (including mobile phones), fax are now used to contact one another quickly around the world, access information instantly and communicate from remote areas. Teleconferences help in saving frequent long trips across the globe
• Information technology has also played an important role in spreading out production of services across countries. Orders are placed through internet, designing is done on computers, even payment for designing and printing can be arranged through internet. Internet also allows us to send instant electronic mail (e-mail) and talk (face-to-face) across the world at negligible cost
• The cost of air transport has fallen which has enabled much greater volumes of goods being transported by airlines
• Technology has made e-banking, e-commerce, e-learning, e-mail and e-governance a reality

Question 40.
What is globalisation? Describe the role of Multinational Corporations (MNCs) in promoting globalisation process?
Year of Question :(2016 D)

Answer: Globalisation is the process of rapid integration or inter-connection among countries. Over the last 20-30 years, these has been a tremendous increase in globalisation with the increase in the number of MNCs

• MNCs set up production centres worldwide where cheap labour is available, markets are near and government policies are favourable.
• They supply produced goods to different countries
• Countries of the world have come closer due to increased movement of people between countries
• MNCs provide money for additional investments for faster production
• MNCs bring with them the latest technology and know-how for enhancing and improving the production process

Question 41.
What is trade? Explain the importance of international trade. ?
Year of Question :(2016 D)

Answer: The exchange of goods among people, states and countries is referred to as trade. Importance of international trade

• International trade of a country is an index to its economic prosperity
• It is considered the economic barometer for a country. If the balance of international trade is favourable, a country will be able to earn more foreign exchange
• As no country is self-sufficient in all resources it cannot survive without international trade
• Countries have trade relations with the major trading blocks
• Exchange of commodities and goods have been superseded by the exchange of information and knowledge

Question 42.
Describe the impact of globalisation on Indian economy with examples?
Year of Question :(2016 D)

Answer: Impact of Globalisation on the Indian Economy

• Greater competition among producers (both local and foreign), has been advantageous to consumers, particularly the well-off section. There is greater choice before the consumers who now enjoy improved quality and lower prices for several products.
• Globalisation has led to a higher standard of living especially in urban areas
• MNCs have increased their investments in India in industries such as electronics, automobiles, cellphones, soft drinks, fast food, banking services etc. thereby providing consumers with a vast variety of products. New job opportunities have been created in these industries and services, thereby increasing purchasing power
• Globalisation has enabled some large Indian companies to emerge as MNCs themselves like Tata Motors, Infosys, Ranbaxy, Asian Paints, etc
• Globalisation has also created new opportunities for companies providing services particularly those involving IT (Information Technology)- For example, call centres
• Top Indian companies have benefitted from the increased competition. They have invested in newer technology and production methods indirectly benefitting the consumers
• Local companies supply raw materials to foreign industries and have prospered. However, for a large number of producers and workers the impact has not been uniform, and globalisation has posed major challenges

Question 43.
How are MNCs spreading their products? Explain with examples. ?
Year of Question :(2014 OD)

Answer: MNCs set up production in various countries based on the following factors

• MNCs set up offices and factories for production in regions where they can get cheap labour and other resources; e.g., in countries like China, Bangladesh and India. These countries also provide with the advantage of cheap manufacturing locations
• At times, MNCs set up production jointly with some of the local companies of countries around the world. Such joint production also provides benefits to the local company
• MNCs with huge amounts of wealth sometimes buy up local companies to expand production, e.g., Cargill Foods, a very large American MNC has bought over smaller Indian companies such as Parakh Foods
• There is another way in which MNCs control production and that is by placing orders for production with small producers in developing nations; e.g., garments, footwear, sports items etc. The products are supplied to these MNCs which then sell these under their own brand name to customers. MNCs also enter into close competition with local companies thereby influencing production in distant location

Question 44.
How do banks play an important role in the economy of India? Explain?
Year of Question :(2015 OD)

Answer:

• Banks help people to save their money and keep their money in safe custody. To ensure safety of their money, people deposit their money with banks. Banks accept deposits and pay interest on deposits. People have the provision to withdraw their money as and when they require
• Banks also grant loans to people for a variety of purposes. In times of need individuals, business houses and industries can borrow money from the banks
• Credit provided by banks is crucial for the countrys growth and economic development. Credit is needed for all kinds of economic activities, to set up business, buy cars, houses, etc
• Banks also help people in obtaining cheap and affordable loans. This can help people to grow crops, do business, set up small-scale industries or trade in goods and also help indirectly in the countrys development. They should do so, so that relatively poor people do not have to depend on informal sources of credit (money-lenders)

Question 45
Describe the vital and positive role of credit with examples?
Year of Question :(2016 D)

Answer: In the festive season, a shoe manufacturer, Ram receives an order from a large trader in town for 3,000 pairs of shoes to be delivered in a months time. To complete production on time Ram has to hire workers for stitching and pasting work. He has to purchase the raw materials. To meet these expenses Ram obtains loans from two sources

• First, he asks the leather supplier to supply leather now and promises to pay him later
• Second, he obtains loan in cash from the large traders as advance payment for 1000 pairs of shoes with a promise to deliver the whole order by the end of the month
• At the end of the month, Salim is able to deliver the order, make a good profit and repay the money he had borrowed
• Salim obtains credit to meet the working capital needs of production. The credit helps him to meet the ongoing expenses of production, complete production on time and thus increase his earnings. Credit therefore plays a vital and positive role in this situation

Question 46
How can the formal sector loans be made beneficial for poor farmers and workers? Suggest any five measures?
Year of Question :(2016 OD)

Answer: Formal sector loans can be made beneficial for poor farmers and workers in the following ways

• Create greater awareness among farmers about formal sector loans
• Process of providing loans should be made easier. It should be simple, fast and timely
• More number of Nationalized Banks/cooperative banks should be opened in rural sectors. Banks and cooperatives should increase facility of providing loans so that dependence on informal sources of credit reduces
• The benefits of loans should be extended to poor farmers and small scale industries
• While formal sector loans need to expand, it is also necessary that everyone receives these loans. It is important that formal credit is distributed more equally so that the poor can benefit from cheaper loans

Introduction to Globalization

Question1.
What is globalization?

Answer:Globalization refers to the process of increased interconnectedness and interdependence among countries through trade, investment, technology, and cultural exchange. It affects economies, societies, and politics globally

Question2.
What are the key drivers of globalization?

Answer:Key drivers include advances in technology (especially information technology), trade liberalization, global supply chains, and international financial markets

Globalization and Economic Development

Question1.
How has globalization impacted economic development in India?

Answer:Globalization has led to increased foreign investment, growth in exports, technological advancements, and the expansion of the service sector, contributing to economic growth and job creation in India

Question2.
What are the challenges posed by globalization for developing economies like India?

Answer:Challenges include increased competition, potential job losses in traditional sectors, income inequality, and vulnerability to global economic fluctuations

Trade and Investment

Question1.
What role does trade play in the Indian economy?

Answer:Trade is crucial for economic growth, providing access to global markets, promoting exports, and attracting foreign direct investment (FDI), which enhances productivity and innovation

Question2.
How has FDI changed since the liberalization policies in the 1990s?

Answer:Since the 1990s, FDI inflows into India have increased significantly due to liberalization policies, leading to greater investment in various sectors such as telecommunications, information technology, and manufacturing

The Impact of Globalization on Employment

Question1.
How has globalization affected employment patterns in India?

Answer:Globalization has created jobs in sectors like IT, services, and manufacturing, but it has also led to job losses in traditional industries. The workforce has shifted toward more skilled jobs while facing challenges in reskilling

Question2.
What are the implications of globalization for labor standards in India?

Answer:While globalization has led to improved working conditions in some sectors, it has also raised concerns about labor exploitation, job insecurity, and inadequate labor rights in others

Social and Cultural Impact

Question1.
How has globalization influenced Indian culture?

Answer:Globalization has led to the exchange of cultural ideas and practices, resulting in increased exposure to global lifestyles, entertainment, and consumer goods, while also sparking debates about cultural preservation

Question2.
What are the effects of globalization on inequality in India?

Answer:Globalization has contributed to rising income inequality, with benefits accruing more to urban areas and skilled workers, while rural populations and unskilled workers often lag behind

Future Prospects of Globalization in India

Question1.
What are the potential future trends of globalization for India?

Answer:Future trends may include greater integration into global supply chains, increased emphasis on sustainability, digital trade, and evolving trade agreements as countries adapt to geopolitical changes

Question2.
How can India navigate the challenges of globalization?

Answer:India can navigate challenges by investing in education and skill development, promoting inclusive growth policies, enhancing infrastructure, and fostering innovation to remain competitive in the global economy

Question1.
What is Globalisation?

Answer:

• Definition:
• Globalisation refers to the integration of countries through foreign trade and investment,
• particularly driven by Multinational Corporations (MNCs)
• Key Features:
• Countries become interconnected
• Goods, services, investments, and technology move between nations

Question2.
What are MNCs and their role in Globalisation?

Answer:

• Definition:
• Multinational Corporations (MNCs) are companies that produce and sell goods in more than one country
• Role in Globalisation
• Spread production across countries to reduce costs
• Set up offices and factories where cheap labor and resources are available
• Increase foreign investments and create jobs in countries like India

Question3.
What is Foreign Trade and its impact on markets?

Answer:

• Definition:
• Foreign trade involves the exchange of goods and services across borders
• Impact:
• Increases choice for consumers
• Promotes competition among producers
• Helps integrate markets globally by connecting local and international markets

Question4.
What are the benefits of Globalisation for India?

Answer:

• For Consumers:
• More choices in goods and services
• Better quality products at lower prices
• For Producers:
• Local companies can collaborate with MNCs
• Improved technology and production methods due to competition
• Creation of jobs in industries like IT, telecommunications, and automobiles

Question5.
What is Liberalisation and how does it support Globalisation?

Answer:

• Definition:
• Liberalisation is the removal of trade barriers like taxes and restrictions on imports and exports
• Role in Globalisation:
• Promotes free trade between countries
• Encourages foreign companies to invest and set up factories
• Reduces government control over business decisions, making the economy more open

Question6.
What is the WTO and its role in Globalisation?

Answer:

• WTO:
• The World Trade Organisation (WTO) is an international body that promotes free trade by ensuring countries reduce trade barriers
• Role:
• Creates rules for international trade
• Ensures fair trade practices, though developed countries sometimes retain trade barriers, which affects developing countries

Question7.
How does technology enable Globalisation?

Answer:

• Technological Impact:
• Improved transportation allows faster delivery of goods across the world
• Information Technology (IT) enables companies to communicate and manage operations globally
• The internet allows easy transfer of information and e-commerce, facilitating global trade

Question8.
What are the challenges faced by small producers due to Globalisation?

Answer:

Challenges:

Increased competition from MNCs

Many small-scale industries struggle to keep up with cheaper imports

Closure of small factories leads to job losses

Examples:

Industries like toys, textiles, and electronics have been impacted by foreign competition

9. How has Globalisation affected employment?

Answer:

• Positive Impact:
• Creation of jobs in IT and service sectors
• Opportunities for skilled workers in large industries
• Negative Impact:
• Job insecurity due to temporary or flexible contracts
• Many workers, especially in small-scale industries, have lost jobs due to rising competition

Question10.
What is Fair Globalisation?

Answer:

• Definition:
• Fair Globalisation ensures that the benefits of globalisation are shared equally among all sections of society
• Steps for Fair Globalisation
• Governments should protect the interests of small producers and workers
• Provide training and resources to help local businesses compete
• Ensure trade rules are fair for developing countries

Globlisation and the Indian Economy Important Question & Answer

Short answer type questions

Q1. Why do MNCs set up their offices and factories in those regions where they get cheap labour and other resources? (CBSE 2016)

Ans: MNCs set up their Offices and Factories in regions where they can get cheap labour and other resources because this helps them reduce the cost of production. Lower production costs allow them to increase their profit margins. Additionally, these regions often offer access to new markets and favourable government policies, further benefiting the MNCs.

Q2. Why did the Indian government remove barrier to a large extent on foreign trade? (CBSE 2016)

Ans: The Indian government removed barriers to a large extent on foreign
trade:
To encourage Indian companies to compete globally.
To attract foreign investments.
To integrate India into the global economy.

Q3. Globalisation and greater competition among producers have been advantageous to customers? ( CBSE 2016)

Ans: It is true to state that Globalisation and greater competition among
producers have been advantageous to customers in the following ways:
(a) They get different varieties and brands of products.
(b) They get better goods and services at cheap rates.

Q4. What measures can be taken by the Indian Government to make Globalisation fairer? Explain. (CBSE2017)

Ans: (a) Labour laws should be implemented properly and the workers get equal rights.
(b) The government should use trade barriers if the government should negotiate at the WTO for fairer rules.

Q5. Explain the role of MNCs in globalisation.

Ans: MNCs play a crucial role in globalization by facilitating the movement of goods, services, investment, and technology across borders. They enhance trade by producing and selling products in various markets, invest in foreign economies to create jobs and bring advanced technology to local industries.

Long answer type questions

Q6. Which factors have stimulated the globalisation process?

Ans: Transportation improvement- In the last fifty years, there has been a lot of improvement in transportation technology. This has made faster delivery of goods across long distances possible at lower costs.
Development in information and communication technology - Technology in the areas of telecommunication and computers has been advancing rapidly.
Telecommunications - Facilities like telephone, telegraph, mobile, and fax are used to connect people in the world. This has been made possible due to satellite communication devices.
Computer - They have now entered almost every field of activities. In the amazing world of the internet, we can obtain and share information on almost anything.

Q7. How do MNCs manage the production in other countries?

Ans: MNCs not only sell their finished products globally but also produce the goods and services globally.
As a result, production is organized in increasingly complex ways.
The production process is divided into small parts and spread out across the world.
For example:
China provides the advantage of being a cheap manufacturing location.
Mexico and Eastern Europe are useful for their closeness to the markets in the US and Europe.
India has highly skilled engineers, who can understand the technical aspects of production.

• CBSE Class 10 SA-1 Social Science Set 1 QP
• CBSE Class 10 Social Globalisation and the Indian Economy Notes