Social Science Class 10 Important Questions Economics Chapter 4 Globalization and the Indian Economy Class 10 Important Questions
Question 1. What are Multi-National Corporations (MNCs)?
Ans. A Multi-National Corporation (MNC) is a big company that makes things in many different countries. They make stuff all around the world by breaking it into smaller parts and making them in different places.
Question 2. Explain ‘what is investment? Give a few examples of investment.
Ans. Investment means purchasing something valuable like a factory, machines, land, buildings (these are called physical assets), or shares (monetary assets). People do this to earn money from the businesses they’re investing in.
Some typical investments include buying land, factories, or machines to make things faster, acquiring small local companies to grow production, hiring affordable workers, skilled engineers, and IT experts, among others.
Question 3. In which year did the government decide to remove barriers on foreign trade and investment in India? (2011 D)
Question 4. Why is ‘tax’ on imports known as a trade barrier? (2011 OD)
Ans. A tax on imports is often referred to as a trade barrier because it makes imported goods more expensive. It’s called a barrier because it creates an obstacle by adding extra costs to these products.
Question 5. Which organization lays stress on liberalization of foreign trade and foreign investment? (2014 D, 2012 OD)
Ans. World Trade Organization (W.T.O).
Question 6. Give one characteristic feature of a ‘Special Economic Zone’?
Ans. Special Economic Zones, commonly known as SEZs, are designated areas created by the government. These zones offer top-notch amenities like electricity, water supply, well-built roads, transportation options, storage facilities, as well as places for leisure and learning. Businesses that establish their production units within SEZs receive tax exemptions for the first five years.
Question 7. Name an important barrier on foreign trade. (2013 D)
Question 8. What is meant by “fair globalization’? (2013 OD)
Ans. Fair globalization means a way of global connection where everyone gets a chance to benefit, and those benefits are shared equally.
Question 9. What do you understand by the term ‘Foreign Direct Investment’? (2014 OD)
Ans. Foreign Direct Investment (FDI) means when companies from other countries invest their money in the businesses and activities of a different country. They do this to grow their operations, make more things, and make money.
Question 10. Why had the Indian Government put barriers to foreign trade and foreign investment after independence? State any one reason. (2015 D)
Ans. The Indian government, after gaining independence, imposed restrictions on foreign trade and investment. This was done to shield domestic producers from foreign competition and safeguard the Indian economy from foreign interference in industries that could harm the country’s economic growth, as per their strategy.
Question 11. What is meant by trade barrier? (2015 OD)
Ans. Trade barriers refer to limitations or rules set by the government that affect the free flow of goods in and out of a country. An example of a trade barrier is when the government places a tax on imported items. This tax makes imported products more expensive. The government can use taxes and other trade barriers to control the flow of foreign trade and determine which types of goods and how much of them should enter the country.
Question 12. Differentiate between investment and foreign investment. (2016 D)
Ans. Money used to purchase things like land, buildings, machines, and equipment is known as an investment. When multinational companies (MNCs) make investments in other countries, it’s called foreign investment.
Short Answer Questions
Question 13. Explain the role of government to make globalization fair. (2011 D)Explain the role of government to make globalization fair. (2011 D)
Ans. The government has a significant role in enabling fair globalization:
Fair globalization means giving everyone a chance and making sure that everyone benefits from globalization. Government policies should look out for not just the rich and powerful, but also for all the people in the country.
The government should make sure that labor laws are followed and that workers are treated fairly. It should also help small businesses get better until they can compete with companies from other countries.
If needed, the government can put up barriers to trade and investment. It can talk to the World Trade Organization (WTO) to make the rules fairer. It can also work together with other developing countries that have similar interests to stand up against the powerful countries in the WTO.
Question 14. Explain any three advantages of globalization. (2011 OD)
Ans. Globalization means when a country economy connects with the world economy. This connection allows things like goods, services, money, resources, and technology to easily move from one country to another.
Globalization has also made it easier for people to move from one country to another. People often move to find better jobs, more money, or a better education. In the past, there were many rules that made it hard for people to move between countries.
One big reason globalization has happened is because technology has gotten much better. For example, transportation technology has improved a lot. Now, we can send things quickly and cheaply over long distances. Special containers have made it cheaper to handle goods at ports. The cost of flying goods has also gone down, so more things can be sent on airplanes.
Technology in communication and information (like the internet) has changed things a lot too. It’s made online banking, shopping, learning, emailing, and government services possible.
Because of globalization, there’s more competition between companies. This is good for consumers, especially those with more money. They can now get better quality products for lower prices.
Question 15. What would happen if Government of India puts heavy tax on import of Chinese toys? Explain any three points. (2012 D)
Ans. If the Indian government imposes high taxes on imported toys from China:
- Chinese toy prices will go up.
- Fewer Chinese toys will be available in India.
- Indian shoppers will have fewer toy options, and toys will become pricier.
- Indian toy manufacturers can take advantage of this situation by growing their businesses, since there will be less competition in the market.
Question 16. How are local companies benefitted by collaborating with multinational companies? Explain with examples. (2013 OD)
Ans. When local companies team up with big international companies:
- First, the big companies give money to help make things faster.
- Second, they bring the latest technology to make things better.
- Some Indian companies have done well by working with foreign companies.
- Globalization has helped some companies become big worldwide.
For example, Parakh Foods used to be a small company. But then, a big American company called Cargill Foods bought them. Parakh Foods was already known as a good brand with a big network in India. They had four places where they made cooking oil, but now Cargill controls them. So, Cargill is now the biggest maker of cooking oil in India, making five million pouches every day.
Question 17. How has information and communication technology stimulated globalisation process? Explain with examples. (2014 D)
Ans. Information and communication technology has greatly supported globalization in several key ways:
- Enhanced Technology for Faster Delivery: The continuous improvement in technology has played a significant role in globalization. Particularly, advancements in transportation technology have made it possible to transport goods quickly over long distances at lower expenses.
- Better Communication Worldwide: The development of information and communication technology has revolutionized global communication. Tools like telegraphs, telephones, mobile phones, and faxes allow people to connect with each other across the globe swiftly. This is largely facilitated by satellite communication devices. Additionally, teleconferences help in reducing the need for frequent long-distance travel.
- Globalized Services: Information technology has also been instrumental in expanding the global reach of services. Businesses can place orders over the internet, conduct design work using computers, and even transfer money between banks through online banking. The internet enables us to send quick and inexpensive electronic mail (email) and voice messages (voicemail) to individuals worldwide.
Long Answer Questions
Question 18. Give the meaning of WTO? What is the major aim of WTO? Mention any two shortcomings of WTO? (2011 D, 2012 OD)
Ans. The World Trade Organization, or WTO for short, believes that countries should trade with each other without any restrictions. They want trade to be open and free between countries.
The goals of WTO are:
- To make international trade more open and less restricted.
- To create rules for how countries should trade with each other.
However, WTO has some issues:
- Even though WTO wants free trade for everyone, it seems that rich countries still have unfair barriers to trade and protect their own businesses. For example, in the United States, farmers get a lot of money from the government, so they can sell their products at very low prices in other countries, which hurts farmers in those places.
- On the other hand, WTO rules make developing countries remove their trade barriers.
Question 19. What is globalization? Explain with three examples how top Indian companies have benefitted from globalization. (2011 OD)
Ans. Globalization means countries joining together quickly. This happens when countries trade with each other and when big companies from one country invest in other countries. It’s like all the world’s economies becoming one big global economy.
Big Indian companies have done well because of more competition and globalization. They used new technology and better ways to make things. Some also did well by working together with companies from other countries. Plus, because of globalization, some big Indian companies became multinational themselves. For example, Tata Motors, Infosys, Ranbaxy, Asian Paints, Sundaram Fasteners, and others.
Question 20. 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. (2012 OD)
Ans. A Multi-National Corporation (MNC) is a big company that makes stuff or provides services in more than one country. They make things all around the world by breaking the production process into small pieces and spreading it out.
Some Indian companies like Tata Motors (cars), Infosys (computers), Ranbaxy (medicines), Asian Paints (paints), Sundaram Fasteners (nuts and bolts), and more are becoming MNCs by doing business in different countries.
Now, let’s talk about how MNCs can be bad for the country they operate in:
- Harm to Small Businesses: MNCs can be really tough competition for small companies. Small businesses like those making batteries, taps, tires, dairy products, or vegetable oil often struggle to survive because they have to compete with big MNCs.
- Uncertain Jobs: MNCs usually want to pay as little as possible for labor. To do that, they often hire workers temporarily, which means those workers don’t have stable jobs throughout the year. This uncertainty makes it hard for people to plan their lives.
- Tough Work Conditions: Workers in MNCs often have to work very long hours, including night shifts, especially during busy times. They get low wages and have to work extra just to make ends meet. They also don’t get the benefits and protections they used to have.
So, while MNCs can bring economic opportunities, they can also hurt small businesses and make life difficult for workers.
Question 21. How has globalization been advantageous to both the producers as well as the consumers in India? Explain. (2012 OD)
Ans. For Producers: Many leading Indian companies have improved their production methods and technology due to increased competition. This has helped them enhance their production quality. They have also benefited from successful partnerships with foreign companies. Globalization has played a role in the growth of the IT sector. As a result, high-quality products are now available at more affordable prices.
For Consumers: Consumers now have more options and can enjoy better quality products at lower prices. This has led to an improved standard of living for people compared to the past.
Question 22. How has globalization benefitted India? Explain with five examples. (2013 OD)
Ans. Globalization has been a positive force for India in several ways:
- People who are educated, skilled, and have some wealth have gained from globalization.
- More competition between local and foreign producers has been good for consumers, especially those who are well-off. This means that rich people can now buy higher-quality products at lower prices, which improves their overall quality of life.
- Large international companies, known as MNCs (Multinational Corporations), have increased their investments in India over the last 20 years. They’ve put their money into industries like cell phones, cars, electronics, soft drinks, fast food, and services like banking.
- All these investments have led to the creation of new jobs in these industries and services, which is great for people who are looking for work.
- Even our top Indian companies have benefited from this increased competition. They have started using newer and better technology and methods to make their products and services.
- Some Indian companies have even partnered with foreign companies, and because of globalization, they have become international businesses themselves. This means they are now operating in multiple countries.
Question 23. “Advancement of international trade of a country is an index of its economic prosperity.” Justify the statement with five arguments. (2013 OD)
Ans. Progress in a country’s global trade is a sign of its economic success. Since no country has everything it needs, they rely on international trade to get what they lack. If a country has more exports than imports, it can make more money from other countries. Global trade motivates a country to build industries and services that can sell products abroad and make even more money. You can measure how well a country is doing economically by looking at its global trade. By trading with other countries, a nation can make a lot of money in foreign currency.