RBSE Class 10 Social Science Solutions Economics Chapter 4 Globalisation and the Indian Economy

 RBSE Class 10 Social Science Globalisation and the Indian Economy InText Questions and Answers

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Question 1. 
Would you say Ford Motors is a MNC ? Why ?
Answer:
Yes, Ford Motors, is an MNC. It is an American company and one of the largest automobile manufacturers with production spread over 26 countries of the world.

Question 2. 
What is foreign investment ? How much did Ford Motors invest in India ?
Answer:
Investment made by MNCs is called foreign investment. Ford Motors invested ₹ 1,700 crore in 1995 in India.

Question 3. 
By setting up their production plants in India. MNCs such as Ford Motors tap the advantage not only of the large markets that countries such as India provide, but also the lower costs of production. Explain the statement.
Answer:
In India, skilled labour is available at low cost and other factors of production are also available at lesser cost. So MNCs produce at lower cost and can sell their products in huge market in India. By this way they can take the benefit of large market with the low cost of production.

Question 4. 
Why do you think the company wants to develop India as a base for manufacturing car components for its global operations ? Discuss the following factors :
(a) cost of labour and other resources in India
(b) the presence of several local manufacturers who supply auto-parts to Ford Motors
(c) closeness to a large number of buyers in India and China.
Answer:
Ford company wants to develop India as a base for manufacturing car components for its global operations, with reference to above point, these three factors are appropriate-
(a) India is a developing nation, where human resources and natural resources are available in abundance, so the cost of production for parts will be less.
(b) There are many small manufacturers of parts, who can supply good autoparts at lower cost.
(c) India is a developing nation and here the demand of cars is much. China has the largest population and demand of cars is increasing rapidly. So by producing cars in India and exporting them to China, will be a huge profit to the company.

Question 5. 
In what ways will the production of cars by Ford Motors in India lead to interlinking of production ?
Answer:
MNCs can set up production jointly with some of the local companies of the country. It will provide the opportunities to local companies for growth.

Question 6. 
In what ways is a MNC different from other companies ?
Answer:
MNC is a huge company whose production, sale and investment is spread in various nations whereas the other companies are set-up in one nation and the investment in these companies is lesser as compared to MNC. The cost of production is lesser in MNC as compared to other companies.

Question 7. 
Nearly all major multinationals are American, Japanese or European, such as Nike, Coca-Cola, Pepsi, Honda, Nokia. Can you guess why ?
Answer:
America, Japan, Europe etc. are developed nations and they have skilled management and world class managerial capacity and they have huge capital and modern technology to invest in other nations. So many companies of these nations are MNCs.

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Question 1. 
What was the main channel connecting countries in the past ? How is it different now ?
Answer:
The main channel to connect countries in the past was foreign trade which was done through waterways or land, whereas now, in present foreign trade has taken place through airways, roadways and waterways and through telecommunication. At present to join various market of different nations the foreign investment is preferred. That's why it is different from past.

Question 2. 
Distinguish between foreign trade and foreign investment.
Answer:
Foreign Trade: It refers to exchange of goods, purchase and sale across geographical boundaries of the countries.

Foreign Investment: It refers to investment directly made in industry or other spheres of economic activity of a country by foreign industrial houses or MNCs with the objective of earning profit. Foreign Investment is an important source of financing industrial development in less developed countries.

Question 3. 
In recent years China has been importing steel from India. Explain how the import of steel by China will affect
(a) steel companies in China 
(b) steel companies in India
(c) industries buying steel for production of other industrial goods in China.
Answer:
(a) Due to import of steel from India there will be increase in competition among Chinese companies and due to this they will be required to produce better quality of goods at lesser cost.
(b) There will be increase in export of steel from India and due to increase in demand, there will be increase in income of Indian companies.
(c) There may be increase in cost of production for the companies who import steel from Indian companies.

Question 4. 
How will the import of steel from India into the Chinese markets lead to integration of markets for steel in the two countries ? Explain.
Answer:
There will be increase in economic relations of India and China and both will be encouraged to increase foreign investment or joint production of goods and it will lead to exchange of modern technology between the nations. 

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Question 1. 
What is the role of MNCs in the globalisation process?
Answer:
The rapid development of globalisation process is possible due to foreign investment. MNCs have served as agents for the transfer of superior technology. MNCs help to build up knowledge base and thus serve for the development of human resources. MNCs transfer capital from countries where it is abundant to countries where it is scarce.

Question 2. 
What are the various ways in which countries can be linked ?
Answer:
Various countries can be linked in following ways-

• Movement of goods and services among different nations.
• Movement of people across borders. 
• Free flow of capital among nations. 

Question 3. 
Choose the correct option.
Globalisation, by connecting countries, shall result in-
(a) lesser competition among producers. 
(b) greater competition among producers. 
(c) no change in competition among producers.
Answer:
(b) greater competition among producers. 

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Question 2. 
How is information technology connected with globalisation ? Would globalisation have been possible without expansion of IT ?
Answer:
Information and communication technology play an important role in globalisation process. Telecommunications, computers, internet, e-mail, voice mail etc. are used intensively to connect one another around the world to across information instantly and to communicate from remote areas. Without information and technology the process of globalisation becomes complex. 

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Question 1. 
What do you understand by liberalisation of foreign trade ?
Answer:
Liberalisation means removing the restrictions from foreign trade i.e. from exports and imports.

Question 2. 
Tax on imports is one type of trade barrier. The government could also place a limit on the number of goods that can be imported. This is known as quotas. Can you explain, using the example of Chinese toys, how quotas can be used as trade barriers ? Do you think this should be used ? Discuss.
Answer:
Government can fix the amount of goods imported from other nations under quota. If Indian government fix the amount of imported toys then supply of Chinese toys would be less and there will be increase in demand and sale of Indian toys which will encourage toy industry in India and employment opportunities will increase in India. In order to protect Indian industries government should fix quota of imported goods. 

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Question 1. 
Fill in the blanks-
WTO was started at the initiative of ............... countries. The aim of the WTO is to ........................... WTO establishes rules regarding ....................... for all countries, and sees that .................. In practice, trade between countries is not ...................... . Developing countries like India have ...................... whereas developed countries, in many cases, have continued to provide protection to their producers.
Answer:
WTO was started at the initiative of developed countries. The aim of the WTO is to liberalise the international trade. WTO establishes rules regarding international trade for all countries, and sees that these rules are followed or not. In practice, trade between countries is not completely free. Developing countries like India have removed the trade restrictions, whereas developed countries, in many cases, have continued to provide protection to their producers.

Question 2. 
What do you think can be done so that trade between countries is more fair ?
Answer:
To make the trade fair between countries, all nations should remove restrictions from exports and imports and WTO should follow the principle of equality for all the nations. 

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Question 1. 
How has competition benefited people in India ?
Answer:
Due to competition, buyers can easily get good variety of quality products of different countries at reasonable price. Producers now sell their products not only in domestic market but also in different countries and thereby increase their profits.

Question 2. 
Should more Indian companies emerge as MNCs? How would it benefit the people in the country?
Answer:
Yes, more Indian companies should be emerged as MNCs. This will lead to industrial development of India, foreign trade will increase and more employment opportunities will be increased in India.

Question 3. 
Why do governments try to attract more foreign investment ?
Answer:
Due to many advantages governments try to increase foreign investment. Foreign investment leads to development of infrastructural development. New industries will be set-up in the country. It will lead to modern technology and employment opportunities. Consumers will get good quality of goods at lower price. 

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Question 3. 
Recent studies point out that small producers in India need three things to compete better in the market (a) better roads, power, water, raw materials, marketing and information network, (b) improvements and modernisation of technology, (c) timely availability of credit at reasonable interest rates.

• Can you explain how these three things would help Indian producers ?
• Do you think MNCs will be interested in investing in these ? Why?
• Do you think the government has a role in making these facilities available ? Why ?
• Can you think of any other step that the government could take ? Discuss.

Answer:
(i) Yes, these three things are necessary for Indian industries. (a) Better roads for transportation, electricity, water, raw material etc. for production of goods, marketing and information technology for sale, (b) improvements and modernisation of technology for better quality of goods and (c) timely availability of credit at reasonable rates will be helpful to Indian producers.

(ii) No, MNCs will not be interested to invest in these sectors because it requires huge investment and gestation period in these sector will be quite long and returns will be available after a long period of time.

(iii) Yes, government has an important role in providing these facilities. There is requirement of huge capital to develop these facilities and except government no individual can provide these facilities. In addition to these the aim of social welfare can be achieved through these facilities.

(iv) Yes, govt. can take many other steps as
(a) Govt. should invite non-resident Indians to invest in India.
(b) Govt. should liberalise its policy of foreign investment.
(c) The businessmen should provide more facilities. 

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Question 1. 
In what ways has competition affected workers, Indian exporters and foreign MNCs in the garment industry?
Answer:
1. Effect on Textile Industry Labourers: Due to competition, labourers are at loss. Their working hours are increased and wages are reduced. Their employment is converted from regular to irregular. Due to reduction in small scale and cottage industries many labourers become unemployed.

2. Effect on Indian Exporters: Due to competition Indian exporters are in benefit, but they are forced to produce at lesser cost, so they cannot afford skilled labourers.

3. Effect on MNCs: Due to competition MNCs are at benefit, they are getting products at lesser price.

RBSE Class 10 Social Science Globalisation and the Indian Economy Textbook Questions and Answers

Question 1. 
What do you understand by globalisation ? Explain in your own words.
Answer:
Globalisation means integrating the economy of a country with the economies of other countries under condition of free flow of trade and capital and movement of persons across borders. It means integrating our economy with the world economy.

Question 2. 
What was the reasons for putting barriers to foreign trade and foreign investment by the Indian government ? Why did it wish to remove these barriers ?
Answer:
Reasons behind putting barriers to foreign trade and foreign investment by the Indian government was to protect the producers within the country from foreign competition. At this stage competition from imports would have hampered the growth of industries.

Around 1991, government felt that it was the proper time for Indian produce to face competition and improve quality of products in comparison to production around the globe. By removing the restriction from foreign trade our producers and consumers both would be benefitted.

Question 3. 
How would flexibility in labour laws help companies?
Answer:
Flexibility in labour laws has helped companies by:

• Availing skilled workforce at lower wages.
• Not ensuring basic securities to the employees.
• Hiring labour for shorter periods of time and exerting high work load.
• Help to reduce the cost for the companies.

Question 4. 
What are the various ways in which MNCs set-up or control production in other countries ?
Answer:
Various ways in which MNCs control production in other countries.

• By Setting up Partnership with Local Companies- At times MNCs set-up production jointly with some of local companies.
• (ii) By Closely Competing with Local Companies or Buying them-up- The most common route for MNCs investment is to buy up local companies and to expand production.
• (iii) By using Local Companies for Supplies- Large MNCs in developed countries place order for production, with small producers, e.g. garments, footwear, sports item etc. The products are supplied to MNCs which are sold under their own brand names to the customers.

Question 5. 
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 cost and high sale price.

In my opinion, the developing countries should demand removal of restrictions from foreign trade, to approach to developed nations market and more economic help.

Question 6. 
“The impact of globalisation has not been uniform." Explain this statement.
Answer:

• Globalisation has proved beneficial for the top Indian companies but so far workers are concerned, globalisation has perished them.
• The top Indian companies have invested in newer technology and production methods and raised their production standards. Globalisation has enabled some large Indian companies to emerge as multinational themselves. For example, Tata motors, Infosys etc.
• But for a large number of small producers and workers globalisation has posed great problems. Several units have shut down rendering many workers jobless.

Thus, we can say that the impact of globalisation has not been uniform.

Question 7. 
How has liberalisation of trade and investment policies helped the globalisation process ?
Answer:
Liberalisation means removing the trade barriers between nations. It facilitated import and export of goods easily and allowed foreign companies to set-up factories and offices in India. Competition caused due to this also helped in improving quality of the Indian products. This change in policy was welcomed by the world community.

Question 8. 
How does foreign trade lead to integration of markets across countries ? Explain with an example. Other than those given here.
Answer:
Foreign trade provides an opportunity for both producers and buyers to reach beyond the markets of their own countries. Goods travel from one country to another. There is huge competition among the producers of one country and producers of another country. Competition among buvers also prevails. Thus foreign trade leads to integration of markets across countries. For example, India imports raw material as diamonds from African nations and by producing jewellary from raw material India exports to America, Europe etc. This leads to integration of markets of these nations.

Question 9. 
Globalisation will continue in future. Can you imagine what the world would be like twenty years from now? Give reasons for your answer.
Answer:
Globalisation is increasing rapidly. Twenty years from now, the world will be more globally connected and integrated into one international economy. Trade and capital flows will increase alongside the mobility of labour. There are many reasons for the same-

• There will be expansion of MNCs through which the markets of the world will come closer.
• There will be increase in investment by MNCs.
• Due to mobility of labour, skilled and unskilled labours will be found in world and movement of labour will increase, more exchange of cultural values will be taken place and there will be increase in living standard of the people.

Question 10. 
Supposing you find two people arguing : One is saying globalisation has hurt country's development. The other is telling, globalisation is helping India develop. How would you respond to these organisations ?
Answer:
Both the arguments are right to some extent. Globalisation has hurt our economy's development as well as helped our country's development.

Positive Impact of the Globalisation on India-

• Increase in the volume of trade in goods and services.
• Inflow of private foreign capital and export orientation of the economy.
• Increased volume of output, income and employment.
• Help in development and strengthening of domestic economies of India.

Negative impact of Globalisation on India-

• It may lead to windening of income inequalities among various countries.
• It may not help in achieving sustainable growth.
• Rising competition has led to shutting down of many small units. Many workers become jobless.
• It may lead to greater dependence of the underdeveloped countries on advanced countries.

Question 11. 
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 ............... Markets in India are selling goods produced in many other countries. This means there is increasing .............. 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 ..................... . While consumers have more choices in the market, the effect of rising .............. and .............. has meant greater .............. among the producers.
Answer:
Indian buyers have a greater choice of goods than they did two decades back. This is closely associated with the process of globalisation. Markets in India are selling goods produced in many other countries. This means there is increasing trade 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 they want to earn more profit. While consumers have more choices in the market. the effect of rising foreign trade and foreign investment has meant greater competition among the producers. 

Question 12. 
Match the following-

(i) MNCs buy at cheap rates from small producers	(a) Automobiles
(ii) Quotas and taxes on imports are used to regulate trade	(b) Garments, footwear, sports items
(iii) Indian companies who have invested abroad	(c) Call centres
(iv) IT has helped in spreading of production of services	(d) Tata Motors, Infosys, Ranbaxy
(v) Several MNCs have invested in setting up factories in India for production	(e) Trade barriers

Answer:

(i) MNCs buy at cheap rates from small producers	(b) Garments, footwear, sports items
(ii) Quotas and taxes on imports are used to regulate trade	(e) Trade barriers
(iii) Indian companies who have invested abroad	(d) Tata Motors, Infosys, Ranbaxy
(iv) IT has helped in spreading of production of services	(c) Call centres
(v) Several MNCs have invested in setting up factories in India for production	(a) Automobiles

Question 13. 
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.
(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.
(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:
(i) b
(ii) b
(iii) b.

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