Please refer to below Exam Question for Class 10 Social Science Chapter 4 Globalization and The Indian Economy. These questions and answers have been prepared by expert Class 10 Social Science teachers based on the latest NCERT Book for Class 10 Social Science and examination guidelines issued by CBSE, NCERT, and KVS. We have provided Class 10 Social Science exam questions for all chapters in your textbooks. You will be able to easily learn problems and solutions which are expected to come in the upcoming class tests and exams for standard 10th.

Chapter 4 Globalization and The Indian Economy Class 10 Social Science Exam Question

All questions and answers provided below for Exam Question Class 10 Social Science Chapter 4 Globalization and The Indian Economy are very important and should be revised daily.

Exam Question Class 10 Social Science Chapter 4 Globalization and The Indian Economy

Objective Type Questions

Question. Choose the correct statement about factors regarding globalisation in India:
1. Improvement in transportation technology.
2. Liberalisation of foreign trade and foreign investment.
3. Favourable rules of WTO towards India in comparison to developed countries.
Choose the correct options from the codes given below:
(a) Only 1 and 2
(b) Only 1 and 3
(c) Only 2 and 3
(d) Only 3
Answer : (a) Only 1 and 2

Question. Ford Motor Company wants to develop Ford India as a component supplying base for its other plants across the world because
(a) A number of local manufacturers are supplying components to their Chennai plants and the MNCs feel that they can supply components to other plants across the globe.
(b) Cost of labour and material is very low in India.
(c) The components can be easily supplied to other MNCs car manufacturers in India and China.
(d) All of the above
Answer : (d) All of the above

Question. Foreign trade creates an opportunity for the producers to reach beyond the domestic markets i.e., markets of their own countries. How does foreign trade become a main channel in connecting countries? Choose the correct option.
(a) Foreign trade creates an opportunity for the producers to reach beyond the domestic markets.
(b) Producers can sell their produce not only in market located within the country but also compete in markets located in other countries of the world.
(c) Impact of the goods produced in another country is also one of the way is expanding the choice of goods.
(d) All of the above
Answer : (d) All of the above

Question. Read the given statements in context of ‘globalisation’ and choose the correct option.
(a) It is the only way for economic development of the country.
(b) Interlinks only production based activities in dispersed locations in the world.
(c) It has always given only positive results in all the countries.
(d) Leads to spread of technology, cultures and diseases from a region to another.
Answer : (d) Leads to spread of technology, cultures and diseases from a region to another.

Question. State whether the following statements are true or false
Globalisation does not create new opportunities in IT sectors.
Answer : False 

Question. In the questions given below, there are two statements marked as Assertion (A) and Reason (R). Read the statements and choose the correct option:
Assertion (A): Rapid improvement in technology has stimulated the globalisation process.
Reason (R): All people have benefitted from globalisation.
Options:
(a) Both A and R are true and R is the correct explanation of A.
(b) Both A and R are true but R is not the correct explanation of A.
(c) A is true but R is false.
(d) A is false but R is true.
Answer : (c) A is true but R is false.

Question. In the question given below, there are two statements marked as Assertion (A) and Reason (R). Read the statements and choose the correct option.
Assertion (A): MNCs have been attracted towards the Indian market.
Reason (R): The Government of India has allowed flexibility in labour laws.
Options:
(a) Both A and R are true and R is the correct explanation of A.
(b) Both A and R are true but R is not the correct explanation of A.
(c) A is true but R is false.
(d) A is false but R is true.
Answer : (a) Both A and R are true and R is the correct explanation of A.

Question. Complete the following table with correct information with regard to WTO:

Answer : A—International trade, B—Free trade for all

Case Based Questions

Read the case/source given and answer the questions that follow by choosing the correct option.

Let us see the effect of Foreign trade through the example of Chinese toys in the Indian markets. Chinese manufacturers learn of an opportunity to export toys to India, where toys are sold at a high price. They start exporting plastic toys to India. Buyers in India now have the option of choosing between Indian and the Chinese toys. Because of the cheaper prices and new designs, Chinese toys become more popular in the Indian markets. Within a year, 70 to 80 per cent of the toy shops have replaced Indian toys with Chinese toys. Toys are now cheaper in the Indian markets than earlier. What is happening here? As a result of trade, Chinese toys come into the Indian markets. In the competition between Indian and Chinese; toys, Chinese toys prove better. Indian buyers have a greater choice of toys and at lower prices. For the Chinese toy makers, this provides an opportunity to expand business. The opposite is true for Indian toy makers. They face losses, as their toys are selling much less.

(i) The Chinese toys have made a global presence in Indian markets too. If India bans Chinese products in their market then what will it imply?
(a) It will decrease the competion in the Indian markets.
(b) It will be an unhealthy business practice.
(c) It will impact economic as well as political relations between the two nations.
(d) Both (b) and (c)
Answer : (d) If Chinese products are banned within the Indian markets then it will promote an unhealthy business practice and it will impact economic as well as political relations between the two nations.

(ii) What is the basic function of foreign trade with reference to the given case? Identify the best suitable option from the following:
(a) It connects markets of different countries.
(b) It creates opportunities for only the buyer to approach foreign goods.
(c) It connects markets of two countries only.
(d) Foreign trade connects developed countries only.
Answer : (a) The basic function of foreign trade is to connect markets of different countries.

(iii) What will happen if tax is imposed on Chinese toys? Choose the correct option.
(a) Chinese toymakers will benefit.
(b) Indian toymakers will prosper.
(c) Chinese toys will remain cheap
(d) Indian consumers will buy more Chinese toys.
Answer : (b) If tax is imposed on Chinese toys then Indian toy-makers will prosper.

(iv) How have markets been transformed in recent years? Infer the correct option with reference to the above context.
(a) Goods become cheaper and have many choices to the user.
(b) Lower job opportunities for people.
(c) High competition among the makers of goods and services
(d) Both (a) and (c)
Answer : (d) Markets have been transformed in the recent years due to globalisation as the goods have become cheaper and provided people with many choices. It has also raised high competition among the makers of goods and services.

(v) How does foreign trade integrate the markets? With reference to the given context, infer the correct Codes
(a) Producers get an opportunity to go beyond their domestic markets.
(b) Producers can sell their produce in markets all over the world.
(c) Both (a) and (b)
(d) Foreign trade has limited the scope of enhancing trade among the countries.
Answer : (c) Foreign trade, has integrated the markets as the producers get an opportunity to go beyond their domestic markets and they can now sell their produce in markets all over the world.

(vi) Read the following statements and choose the incorrect statements about the impacts of Chinese goods on Indian goods market. I. Indian goods are facing crises due to cheap products offered by China into the Indian markets. II. Chinese goods dominate the Indian markets. III. Indian goods are less expensive then Chinese goods. Codes
(a) Both I and II
(b) Only II
(c) Only III
(d) Both II and III
Answer : (c) Statement III is incorrect. Indian goods are more expensive than Chinese goods.

Question. Read the case given below and answer the following questions.

Source-A Globalisation and the Indian Economy As consumers in today’s world, some of us have a wide choice of goods and services before us. The latest models of digital cameras, mobile phones and televisions made by the leading manufacturers of the world are within our reach. Every season, new models of automobiles can be seen on Indian roads.

(i) How is the impact of globalisation visible on consumers?
Answer : The impact of globalisation is visible on consumers as due to globalisation there is a greater choice available before consumers who now enjoy improved quality and lower prices for several products. Source-B Foreign Trade and Integration ofMarkets Foreign trade creates an opportunity for the producers to reach beyond the domestic markets, i.e. markets of their own countries. Producers can sell their produce not only in markets located within the country but can also compete in markets located in other countries of the world. Similarly, for the buyers, import of goods produced in another country is one way of expanding the choice of goods beyond what is domestically produced.

(ii) Explain the basic function of Foreign Trade.
Answer : The basic functions of foreign trade is that it creates an opportunity for the producers to reach beyond the domestic markets i.e. markets of their own countries. Producers can sell their produce not only in markets located within the country but can also compete in markets located in other countries of the world. Source-C The Struggle for Fair Globalisation In the past few years, massive campaigns and representation by people’s organisations have influenced important decisions relating to trade and investments at the WTO. This has demonstrated that people also can play an important role in the struggle for fair globalisation.

(iii) How do people play an important role in the struggle for fair globalisation ? Explain.
Answer : People play an important role in the struggle for fair globalisation as they organise massive campaigns and protests and influence the trade and investment policies of the World Trade Organisation (WHO) and their own countries as well. 8. Read the cases/sources given below and answer the questions that follow. MNC is not only selling its finished products globally, but more important, the goods and services are produced globally. As a result, production is organised in increasingly complex ways. The production process is divided into small parts and spread out across the globe. In the above 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. It also has educated English speaking youth who can provide customer care services. And all this probably can mean 50-60 per cent cost savings for the MNC! The advantage of spreading out production across the borders to the multinationals can be truly immense.

(i) Why MNC’s prefer India as their destination for setting business?
Answer : MNC’s prefer India as their destination for setting business due to the following reasons ! India has highly skilled engineers who can understand the technical aspects of production. ! India also has educated English speaking youth. It has cheap labour and resources.

(ii) What kind of criterias are looked upon by the MNC’s for Investment?
Answer : MNC look for various criterias before investing such as availability of skilled-unskilled labour, closeness to the markets, government policies that look after their interest, etc.

(iii) To what extent do you agree that SEZs are encouraged by the government for MNCs?
Answer : Government encourage SEZs which is known from the fact that government provides world class facilities like electricity, water, roads, transport, storage, recreational and educational facilities in these industrial zones. SEZs are encouraged so that MNCs set up their factories or offices in SEZs.

Read the information given below and select the correct option.

Until the middle of the twentieth century, production was largely organised within countries. What crosses the boundaries of these countries were raw material, foodstuff and finished products. Colonies such as India exported raw material and foodstuff and imported finished goods. Trade was the main channel connecting distant countries. This was before large companies connecting distant countries. This was before large companies called multinational corporations (MNCs) emerged on the scene.
Foreign trade creates an opportunity for the producers to reach beyond the domestic markets i.e., markets of their own countries. Producers can sell their produce not only in markets located within the country but can also compete in markets located in other countries of the world. Similarly, for the buyers, import of goods produced in another country is one way of expanding the choice of goods beyond what is domestically produced.

MNCs are a major force in connecting the countries of the world because–
(a) they can form and utilize the connections between national economics.
(b) they help in the integration of market and in flow of information.
(c) they may also outsource their production processes, often to lesser developed nations to reduce their costs.
(d) All of the above
Answer : (d) All of the above

Question. Read the information given below and select the correct option.

Chinese manufacturers learn of an opportunity to export toys to India, where toys are sold at a high price. They start exporting plastic toys to India. Buyers in India now have the option of choosing between Indian and the Chinese toys. Because of the cheaper prices and new designs, Chinese toys become more popular in the Indian markets. Within a year, 70 to 80 per cent of the toy shops have replaced Indian toys with Chinese toys. Toys are now cheaper in the Indian markets than earlier. Let us see the effect of foreign trade through the example of Chinese toys in the Indian markets. What is happening here? As a result of trade, Chinese toys come into the Indian markets. In the competition between Indian and Chinese toys, Chinese toys prove better. Indian buyers have a greater choice of toys and at lower prices. For the Chinese toy makers, this provides an opportunity to expand business. The opposite is true for Indian toy makers. They face losses, as their toys are selling much less.

(i) Removing barriers or restrictions set by the government on foreign trade and foreign investment is known as:
(a) Nationalisation
(b) Globalisation
(c) Liberalisation
(d) Taxation
Answer : (c) Liberalisation

(ii) Trade barrier is a restriction set by the government to regulate the trade of the country. How will trade barrier affect the Chinese producers? Choose the correct option.
(a) If there is trade barrier on the Chinese toys then the cost of the Chinese toys in the Indian market would be high and will not be able to flourish in the market.
(b) The Chinese producers have to stop selling their products to the Indian market and look for some other ventures.
(c) Both (a) and (b)
(d) None of these
Answer : (c) Both (a) and (b)

Very Short Answer Type Questions

Question. Define globalisation in brief.
Answer : Globalisation can be defined as the process of rapid interconnection or integration between the markets.

Question. Define foreign investment in brief.
OR
What is Foreign Investment?
Answer : Investment made by the MNCs from foreign countries is called foreign investment.

Question. What are the factors controlling the setting up of production units by MNCs?
Answer : Factors controlling MNCs production–closeness to the market, skilled and unskilled labour available at low cost, government policies etc. to keep the cost of production low and profit high.

Question. What attracts the Foreign investment?
Answer : Infrastructural facilities.

Question. Amit is using his money to buy assets like house, commercial land and machines. Write what is he actually doing?
Answer : He is investing his money with a hope of earning profits from these assets.

Question. Why are MNCs setting their customer care centres in India? 
Answer : MNCs are setting up their customer care centres in India due to availability of cheap skilled labour and good English speaking people.

Short Answer Type Questions

Question. What is investment? Name the companies which make foreign investment. Write any two benefits which a local company expects from joint production with a Multinational company.
Answer : The money that is spent to buy assets such as land, building, machines and other equipments is called investment. The companies which make foreign investment in India are Ford Motors, Nike, Coca-Cola, Pepsi, Honda, Nokia, Tata Motors, Infosys, Ranbaxy, Asian Paints, etc. The benefits that a local company expects from joint production with a multinational company are (i) To providemoney for additional investments, like buying new machines for faster production. (ii) To bringwith themthe latest technology for production.

Question. How are local companies benefitted by collaborating with multinational companies? Explain with examples. 
Answer : The local companies are benefitted by collaborating with multinational companies in the following ways (i) MNC’s can finance the additional investments for the local companies like buying new machinery for faster production. (ii) MNC’s may provide the companies with latest technology for efficient production as MNC’s have an international outreach. (iii) Local companies will benefit financially through a partnership with an MNC because the production and its efficiency would naturally increase. Hence, an MNC works at an international level, while local companies have a very small outreach. Therefore, a partnership with such a large company is beneficial for both.

Question. What are the various ways in which MNCs set up or control production in other countries?
Or
Explain by giving examples that MNCs are spreading their production in different ways. 
Answer : The way in which MNCs control or spread their production are ! By Buying Local Companies Large MNCs buy companies that are operating locally. By doing this, they get a good customer base and the local company gets latest technology. For example, Cargill Foods (MNC) merged with Parakh Foods (local). ! By Joint Ventures MNCs set-up production units jointly with any company that may be operating in a country. By doing this, MNCs not only increase their production but also get a vast market. For example, Ford Motors set up automobile plant in collaboration with Mahindra and Mahindra. ! By Placing Orders with Small Producers MNCs place orders for their products with small producers in developing countries where the resources are cheap. Then the MNCs sell those products under their own brand. Ex Garments, footwear, jeans, footballs, etc.

Question. List the factors that encourage the MNCs to set up their production units at a place. Or Why do multinational corporations set up their offices and factories in certain areas only? 
Answer : The factors that promote the setting up of MNCs or the reason for setting up MNCs at a certain place are ! Availability of skilled and unskilled labour, e.g. India has highly skilled engineers who can understand the technical aspects of production. ! Availability of raw materials at cheap prices e.g. China provides the advantage of being a cheap manufacturing location. ! Well developed infrastructure like roads and railways ! Liberalised governmental policies. ! Closeness to markets e.g. Mexico and Eastern Europe are useful for their closeness to the markets in the US and Europe. ! Safe environment

Question. ‘Barriers on foreign trade and foreign investment were removed to a large extent in India since 1991. Justify the statement. (CBSE 2016) Or Why did the Indian Government remove barriers to a large extent on foreign trade and foreign investment? 
Answer : It is true that barriers on foreign trade and foreign investment were removed to a large extent in India since 1991 because ! In 1991, the Government of India liberalised its policy and felt that Indian producers must compete with producers around the world. ! The Government had an opinion that trade competition would improve the performance of the local producers within the country since they will be forced to improve their quality. ! Another reason was the economic crises in India in 1990-91 and support of WTO and IMF led the government to remove trade barriers.

Question. “Information and Communication Technology (ICT) has played a major role in spreading out products and services across countries.” Support this statement.
Answer : Information and Communication Technological (ICT) has played a major role in spreading out products and services across countries in the following ways ! Telecommunication facilities (telegraph, telephone including mobile phones, fax) are used to contact one another around the world, to access information instantly and to communicate from remote areas. This has been facilitated by satellite communication devices. ! Computers have started the amazing world of the Internet, where one can obtain and share information on almost anything. It also allows us to send instant electronic mail and (voice-mail) across the world at negligible costs which boosts trade and commerce.

Question. How does Government attract foreign investment? Explain different ways.
Answer : Government attracts foreign investment in the following ways ! Special Economic Zones have been set up to have world-class facilities such as cheap electricity, roads, transport, storage, etc. ! The companies setting their units in SEZs are exempted to pay tax for initial period of five years which increases their profit. ! Labour laws are made flexible in SEZs. This has attracted foreign investment.

Question. Why had the Indian government put barriers to foreign trade and foreign investments after independence? Analyse the reason.
Answer : Indian government put barriers to foreign trade and foreign investments after independence because ! To protect the domestic producers within the country from foreign competition in the form of imports. ! To encourage more production of goods so that more industries can be started. ! During 1950s and 1960s, Indian industries were just coming up, they were not prepared to face challenges from foreign countries.

Question. Explain the facilities available in SEZ that are developed by Central and State governments to attract foreign Investment.
Answer : SEZs are industrial zones set up by the government to promote the establishment of MNCs. The facilities available in SEZ are ! SEZ are provided with world class facilities electricity, water, roads, transport, storage, recreational and educational facilities. ! Companies operating in SEZ do not have to pay taxes for five years. ! Government has allowed flexibility in the labour laws to attract MNCs.

Question. “Globalisation has been advantageous to consumers as well as to producers.” Support the statement with suitable examples.
Answer : Globalisation has benefitted the producers and the consumers in the following ways ! Globalisation has led to an intense increase in industrial competition. As a result, producers are competing over each other to provide better and cheaper services to the consumers. This has also resulted in reduction in the prices. ! With the initiation of globalisation, producers now have relatively free access to international markets. Also, they can now avail more easily of the credit facilities forwarded in terms of capital and technology. This is illustrated by the example of the electronics goods and garments industry. ! Consumers have more choice of goods and services as compared to earlier times specially in modern digital technological equipments like cell phones, cameras etc.

Question. Describe any four characteristics of WTO.
Answer : The four characteristics of WTO are (i) World Trade Organisation (WTO) is a powerful international organisation. (ii) It aims at liberalising international trade. (iii) It establishes rules regarding international trade and sees that these rules are obeyed. (iv) WTO is supposed to allow free trade for all countries. But in practice, it is seen that the developed countries have unfairly retained trade barriers.

Question. How is stability in jobs for the workers affected due to globalisation?
Answer : The stability in jobs for the workers affected due to globalisation in the following ways ! There is no permanent employment, but workers are employed only when needed, i.e. they are ‘flexible workers’. In the slack season, they are out of work with no compensation. ! Due to globalisation, the MNC’s main objective is to lower costs. To do this, they provide temporary employment only and are given lower wages or they may have to work on per day basis. ! Workers may have to work for longer hours and be laid off from work without any compensation during the slack season.

Question. “The impact of globalisation has not been uniform.” Explain this statement. Or “The impact of Globalisation has not been uniform.” Explain with examples.
Answer : The impact of globalisation has not been uniform as ! Globalisation has increased the sale of consumer goods which are demanded by only a small section of people in developing countries like cell phone, automobile, soft drinks. Large section is still deprived of basic necessities. ! Globalisation increases the concentration of economic power and leads to inequalities. It is mainly beneficial to large capitalists, industries and large companies like google. The small scale producers and workers have suffered as a result of rising competition. ! Globalisation has changed the nature of employment as now workers are hired on temporary basis and their jobs are no longer secure.

Question. How has liberalisation of trade and investment policies helped the globalisation process?
Answer : Liberalisation of trade and investment policies has helped in Globalisation in the following ways ! This has helped in the import and export of goods. This means that goods can be exported and imported easily and also foreign companies could set up factories and offices here. ! Larger foreign investment and larger foreign trade have led to greater integration of production and markets across countries. As a result, more and more companies are coming closer to each other due to MNCs. ! Latest technology such as ICT is spread throughout the world due to liberalisation.

Question. “Fair globalisation would create opportunities for all and also ensure that benefits of globalisation are shared better.” Support the statement.
Or How can the government of India play a major role to make globalisation more fair? Explain with examples.
Answer :As fair globalisation would create opportunities for all and also ensure that benefits of globalisation are shared better, the government can play a major role in making globalisation a fair medium in the following ways ! By framing policies that protect the interests of not only the rich and powerful but also the weaker sections of the society. ! By supporting small producers so that they can compete with large manufacturers. ! By ensuring that labour laws are properly implemented and workers get their rights. ! By using trade and investment barriers and negotiating for fairer rules at the WTO. ! It can also align with other developing countries with similar interests to fight the domination of developed countries in the WTO.

Question. Elaborate any three disadvantages of Multinational Corporations.
Answer : The disadvantages of MNCs are:
(i) Small manufacturers like-batteries, capacitors, plastic toys, tyres, dairy products and vegetable oil were victims of competition.
(ii) Closing down of small units rendered many workers jobless.
(iii) Most employers prefer to employ workers ‘flexibly’, this means that workers jobs are no longer secure. Small Indian companies were hard hit because of Government’s changed policies such as allowing import of the goods which were previously not allowed.

Question. Discuss the spreading of production by an MNC with example.
Answer : An MNC from the USA producing industrial equipment, designs its product in the research centres. Components are manufactured in China because of cheap manufacturing; assembling and selling the products globally from Mexico and eastern Europe because of closeness to the market and having its Call Centres in India because of highly skilled engineers and educated English speaking youth.

Question. Discuss the effects of trade barriers on the import of Chinese toys in India.
Answer : (i) Chinese exporters have to pay tax.
(ii) This will increase the price of the toys and it will be costlier in the Indian market.
(iii) Imports from China will decline.
(iv) Indian toy makers will flourish in the market.

Question. Evaluate the role of MNCs in the economic development of a country.
OR
Assess any three advantages of multinational companies.
Answer : The advantages of the Multi-national Cooperations (MNCs) are:
(i) MNCs also reduce the host countries dependence on imports. Imports reduce while exports from the country see a rise.
(ii) MNCs promote maximum utilisation of the country’s resources. This, in turn, leads to economic development.
(iii) The MNC is not only selling its finished products globally, but more important, the goods and services are produced globally.
(iv) MNCs might bring with them the latest technology for production, and generate employment opportunities.

Question. How has development in ICT helped in the globalisation process? Explain with example.
Answer : The role of technology in promoting globalisation process are as follows:
(i) This has made much faster delivery of goods across long distances possible at lower costs.
(ii) Even more remarkable have been the developments in information and communication technology.
(iii) Technology in the areas of telecommunications, computers, Internet has been changing rapidly.
(iv) Telecommunication facilities (telephone including mobile phones, fax) are used to contact one another around the world, to access information instantly, and to communicate from remote areas.
(v) This has been facilitated by satellite communication devices.

Question. How has globalisation affected the lives of the people? Explain with any three examples.
Answer : Effect of globalisation on the lives of people are:
(i) Increased their investment in industries such as cell phones, automobiles, electronics, soft drinks, fast food or services such as banking in urban areas.
(ii) New jobs have been created.
(iii) Local companies supplying raw materials to these industries have prospered.
(iv) Increased competition.
(v) Several top Indian companies have been able to benefit from the increased competition. They have invested in newer technology and production methods and raised their production standards. Some have gained from successful collaborations with foreign companies.
(vi) New opportunities for service such as data entry, accounting, administrative tasks, engineering are now being done cheaply in countries such as India and are exported to the developed countries. 

Question. How has development in transportation technology helped in the globalisation process?
Answer : The world has done tremendous improvements in the field of transportation technology. Now we have different fastest means of transport with the help of which we can reach to different parts of the world in less time and can control trade and integrate the markets easily.

Question. How did ‘Cargill Foods’ become the largest producer of edible oils in India? Explain.
Answer : (i) Cargill foods is a very large American MNC. It has bought over smaller Indian companies such as Parakh Foods and expanded the range of its production of edible oils in India.
(ii) Parakh foods had built a large marketing network in various parts of India where its brand was well reputed. Also Parakh foods had four oil refineries whose control has now shifted to Cargil. It has become the largest producer of edible oils in India. It refines processes and markets various edible oils for the food industry.
(iii) Many popular brands like Sweekar, Nature Fresh, and Gemini are part of Cargill Foods.

Question. How has liberalisation of trade and investment policies helped the globalisation process?
Answer : (i) Liberalisation of trade and investment policies has helped the globalisation process by making foreign trade and foreign investment easier.
(ii) This has led to a deeper integration of national economies into one conglomerate whole.
(iii) Now goods could be imported and exported easily. Foreign companies could set up factories and offices in India.

Question. Discuss the two steps taken by the government to attract foreign investment in India.
Answer : (i) The government has set up industrial zones called SEZs (Special Economic Zones).
(ii) The government has also allowed flexibility in the labour laws to attract foreign investment.

Question. “Foreign trade is an important component of globalisation”. Explain any three points in this regard.
Answer : Foreign trade is an important component of globalisation because:
(i) Foreign trade implies exchange of goods and services across the countries.
(ii) It helps to expand the size of market for producers.
(iii) Producers and consumers can get commodities produced in any part of the world.
(iv) It works to integrate markets in different countries.

Question. How do MNCs help in the growth of local companies?
Answer : . Factors that promotes MNCs:
(i) Close proximity to the market.
(ii) Availability of skilled and unskilled labour at low cost.
(iii) Assured production.
(iv) Government’s liberalised policies.
(v) Developed infrastructure.
(vi) Safety measures

Question. “Barriers on foreign trade and foreign investment were removed to a large extent in India since 1991.” Justify the statement.
Answer : Removal of barriers on foreign trade and foreign investment :
(i) Barriers on foreign trade and foreign investment were partially removed.
(ii) Goods could be imported and exported easily.
(iii) Foreign companies could set up factories and offices here.
(iv) Indian producers got opportunities to compete with producers around the globe.

Question. Describe the impact of globalisation on producers, workers and buyers.
Answer : The impact of globalisation can be noticed on these people:
(i) Producers: big producers who join hands with the MNCs are getting the profit but the small producers face loss and in many cases they have to shut down their business.
(ii) Workers: MNCs helped in reducing the unemployment in India but as MNCs get flexibility in labour laws so they hire the workers on temporary basis.
(iii) Buyers: MNCs produce mostly for the rich buyers so the rich buyers get choices in the market more than the poor buyers.

Question. “Foreign trade is an important component of globalisation”. Explain any three points in this regard.
Answer : (i) Foreign trade implies exchange of goods and services across the countries.
(ii) It helps to expand the size of market for producers.
(iii) Producers and consumers can get commodities produced in any part of the world.
(iv) It works to integrate markets in different countries.

Question. Why had the Indian government put barriers to foreign trade and foreign investments after independence? Analyses the reasons.
OR
Why had the Indian government put barriers to foreign trade and foreign investment after independence? Analyses the reasons.
OR
Why had Indian government put barriers to foreign trade and foreign investment after independence? Explain.
Answer : Reasons for putting trade barriers to foreign trade and investment by the Indian government after Independence are:
(i) To protect local producers and goods from foreign competition.
(ii) Industries needed protection so that they could grow and develop in order to be ready to compete with developed countries later on.
(iii) It imposed restrictions on the import of certain goods.
Reasons to remove barriers were:
(i) To face competition and improve quality of products.
(ii) To attract foreign investments.
(iii) To place orders for production

Question. Describe the major problems created by the globalisation on a large number of small producers and workers.
OR
Critically examine the impact of globalisation in India.
Answer : Globalisation on small producers and workers:
(i) It has led to widening of income inequalities among various countries.
(ii) Workers jobs are no longer secure.
(iii) Expansion of unorganised sector.
(iv) Small manufacturers have been hit hard due to severe competition.
(v) Several units have been shut down rendering many workers jobless.
(vi) Lives of workers are on the whims of employers.
(vii) Workers are denied their fair share of benefits.

Long Answer Type Questions

Question. What role can the government play in order to ensure a fair globalisation?
OR
Explain how globalisation can be made fairer.
Answer : The government can play a major role in ensuring a fair globalisation in India:
(i) Its policies must protect the interests, not only of the rich and the powerful, but also all the people in the country.
(ii) The government can ensure that labour laws are properly implemented and workers get their rights.
(iii) It can support small producers to improve their performance till the time they become strong enough to compete.
(iv) If necessary, the government can use trade and investment barriers.
(v) It can negotiate at the WTO for ‘fairer rules’.
(vi) It can also align with other developing countries with similar interests to fight against the domination of developed countries in the WTO.

Question. 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?
OR
“Barriers on foreign and foreign investment were removed to a large extent in India since 1991”. Justify the statement. 
Answer : Reasons for putting barriers to foreign trade and foreign investment by the Indian Government:
(i) To protect the domestic producers within the country from foreign competition.
(ii) The competition from importers would have crippled the new-born industries of India. In such a situation, imports of only such commodities were allowed, which were quite necessary such as machinery, fertilisers, petroleum, etc.
(iii) During 1950s and 1960s, competition from imports was giving a death blow to growing industries in India. Hence, India allowed imports of only essential goods.
The government wished to remove these barriers in the 1990s, because it felt that domestic producers were ready to compete with foreign industries. It also 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. Thus, the government decided that the time had come for Indian producers to compete with producers around the globe.

Question. Describe the contribution of technology in promoting the process of globalisation.
Answer : Contribution of technology in promoting the process of globalisation:
(i) Past fifty years have seen several improvement in transportation technology.
(ii) This has made much faster delivery of goods across long distance possible at former costs.
(iii) In recent times technology in the areas of telecommunication, computers and internet has been changing rapidly.
(iv) Technology has facilitated the satellite communication devices.
(v) Telecommunication facilities are used to contact one another around the world.

Question. “Advancement of international trade of a country is an index to its economic prosperity”. Elaborate with examples.
Answer : Advancement of International trade:
(i) Trade between two countries through sea, air or land route helps in the development of country.
(ii) No country can survive without International trade.
(iii) Export and Import are the component of trade.
(iv) Commodities in export- agriculture and allied products, areas and minerals, gems and jewellery etc.
(v) The commodities imported to India include Petroleum and its products, precious stores, chemicals etc.

Question. “Information and Communication technology has played a major role in spreading out production of services across countries.” Justify the statement with examples.
Answer : Rapid improvement in technology has stimulated the globalisation process:
(i) Transportation technology has made much faster delivery of goods across long distances possible at lower costs.
(ii) There are even more remarkable developments in information and communication technology.
(iii) Telecommunication facilities are used to contact one another around the world, to access information instantly, and to communicate from remote areas.
(iv) Through internet, one can obtain and share information on almost anything. it also allows to send e-mail and talk across the world at negligible costs.
(v) For example, a news magazine published for London readers is to be designed and printed in Delhi.
The text of the magazine is sent through Internet to the Delhi office. The designers in the Delhi office get orders on how to design the magazine from the office in London using telecommunication facilities. The designing is done on a computer. After printing, the magazines are sent by air to London. Even the payment of money for designing and printing from a bank in London to a bank in Delhi is done instantly through the Internet.

Question. “Fair globalisation would create opportunities for all and also ensure that benefits of globalisation are shared better.” Support the statement.
Answer : Fair globalisation would create opportunities for all and also ensure that benefits of globalisation are shared better due to:
(i) Government policies must protect the interests not only of the rich and powerful but of all the people in the country.
(ii) Government can ensure that labour laws are properly implemented and the workers get their rights.
(iii) Government can support small producers to improve their performance till they become strong enough to compete.
(iv) If necessary the government can use trade and investment barriers.
(v) It can negotiate at the WTO for fairer rules.
(vi) It can also align with other developing countries with similar interests to fight against the domination of developed countries in the WTO.

Question. Technology has stimulated the globalisation process.” Support the statement with examples.
OR
Describe the role of technology in promoting globalisation process.
Answer : Rapid improvement in technology has stimulated the globalisation process. The role of technology in promoting globalisation process are as follows:
(i) This has made much faster delivery of goods across long distances possible at lower costs.
(ii) Even more remarkable have been the developments in information and communication technology.
(iii) Technology in the areas of telecommunications, computers, Internet has been changing rapidly.
(iv) Telecommunication facilities (telephone including mobile phones, fax) are used to contact one another around the world, to access information instantly, and to communicate from remote areas.
(v) This has been facilitated by satellite communication devices.

Question. What is liberalisation? Describe any four effects of liberalisation on the Indian economy.
Answer : Removing barriers or restrictions set by the government is known as liberalisation: Impacts of liberalisation:
(i) Competition would improve the performance of producers within the country.
(ii) Barriers on foreign trade and foreign investment were removed to a large extent. This meant that goods could be imported and exported easily.
(iii) Foreign companies could set up factories and officers to boost up production.
(iv) It allows to make decisions freely.
(v) The competition would improve the performance of producers within the country since they have to improve their quality.

Question. Why do Multinational Corporations (MNCs) set up their offices and factories in certain areas only? Explain any five reasons.
Answer : Multinational Corporations set up their offices and factories in certain areas only due to the following reasons (i) Availability of Labour The MNCs operate in a country to get cheap labour so they set up their factories where there is easy availability of skilled and unskilled labour. (ii) Availability of Raw Materials The MNCs set up their factories where they get raw materials easily and at cheap prices. (iii) Well Developed Infrastructure MNCs set up their offices and factories where there is good infrastructural facilities such as roads, railways, regular supply of electricity etc. (iv) Liberalised Government Policies When the government encourages investment then it liberalises its trade policies so that MNCs could set up their offices at that place. So, MNCs set up in those areas where they get government support. (v) Closeness to Markets MNCs set up their offices and industries in those places where there are good markets for selling their finished products. This reduces transportation cost also.

Question. How has foreign trade been integrating markets of different countries ? Explain wth examples.
Answer : Foreign trade has been integrating markets of different countries in following ways ! Since historic times foreign trade been the main channel of connecting countries, e.g. Silk route connects India and South Asia to markets both in the East and West. Foreign trade creates an opportunity for producers to reach beyond the domestic markets, i.e. markets of their own countries. Choice of goods in the markets rises. Prices of similar goods in the two markets tend to become equal. Producers in the two countries closely compete against each other even though they are separated by thousands of miles. ! With many MNCs in the market, the consumer has a wide range of products coming from different nations to choose from. Hence, it interlinks various markets across the countries. For example-Volkswagen, a German automobile company, is the biggest German automaker in the world. It came to India in 2007 and had recorded sales of 32,627 vehicles in the year 2010. ! Another example is Indian markets have a number of footwear brands available for customers. A consumer can decide what to purchase either from local footwear brands like Bata, Liberty, Red Chief or International brands like Nike, Skechers, Reebok etc as per his/her choice and need.

Question. How have our markets been transformed in recent years? Explain with examples.
Answer : Our markets have been transformed in recent years due to the process of globalisation in the following ways ! As consumers in today’s world, some of us have a wide choice of goods and services before us. The latest models of digital cameras, mobile phones and televisions made by the leading manufacturers of the world are within our reach. ! Every season, new models of automobiles can be seen on Indian roads. Gone are the days when Ambassador and Fiat were the only cars on Indian roads. ! Today, due to globalisation and foreign trade, Indians are buying cars produced by nearly all the top companies in the world. ! In the similar way, we can see a wide variety of brands in the market place e.g. from shirts to televisions to processed fruit juices and even chocolates and candies. With the coming of MNCs in India, local companies are now adopting newer technology and production methods. Due to this changing pattern in production consumers in Indian markets are enjoying a much higher standard of living than ever before.

Question. ‘‘Rapid improvement in technology has stimulated the globalisation process.’’ Explain the statement with examples.
Answer : Rapid improvement in technology has stimulated the globalisation process in the following ways ! There has been many improvements in transport facilities which help in export and import of goods. This increases trade relations between countries. ! Since technology improves efficiency, the process of exchange has become faster and cheaper. ! Development in information and communication technology has been the most beneficial since information can be now sent in seconds across the world. ! Development in IT also has led to the production of services through outsourcing for example, call centres, online teaching etc. ! Through internet facility, one can obtain and share information on almost anything, it allows to send e-mail and messages across the world at negligible costs. For example, a news magazine published for London readers is to be designed and printed in Delhi. The magazine is sent through internet to the Delhi office. The designers in Delhi office get orders on how to design the magazine from the office in London using telecommunication facilities. The designing is done on a computer. After printing, the magazines are sent by air to London. Even the payment of money for designing and printing from a bank in London to a bank in Delhi is done instantly through the internet banking.

Question. How can consumers and producers be benefited from ‘foreign trade’ ? Explain with examples.
Answer : Consumers and producers both are benefitted from ‘foreign trade’ in the following ways ! Foreign trade creates opportunities for the producers to sell their products not only in the domestic markets (within the country) but also all over the world. For example, Cafe Coffee Day which is an Indian MNC, exports its coffee to various countries like USA, Europe and Japan. ! Producers can also buy from the world market where raw material and labour is cheap. Similarly for the buyers, import of goods produced in another country is one way of expanding the choice of goods beyond what is domestically produced. ! Foreign trade facilitates by opening of trade goods which travel from one market to another. Choice of goods in the market rises. ! Producers in the two countries now closely compete against each other even though, they are far away to each other. ! Prices of similar goods in the two markets tend to become equal due to competition.

Question. What is globalisation? Explain two positive and two negative impact of globalisation.
Answer : Globalisation is the process of integration and interconnectedness between countries. Positive impacts of Globalisation are (i) Availability of variety of products with greater choice and quality at affordable price. (ii) Creation of new jobs and higher standard of living. Negative impact ofs Globalisation are (i) Thousands of uneducated and unskilled labourers have become jobless due to closure of domestic units. (ii) Most of the small industries like toys, tyres, plastics, dairy products are affected due to foreign competition. This results in their closure thereby reducing production.

Case Based Questions

Question. Read the source given below and answer the questions by choosing the most appropriate option.

The liberalisation of foreign trade and investment in India was supported by some very powerful international organisations. These organisations say that all barriers to foreign trade and investment are harmful. There should be no barriers. Trade between countries should be ‘free’. All countries in the world should liberalise their policies. World Trade Organisation (WTO) is one such organisation whose aim is to liberalise international trade. Started at the initiative of the developed countries, WTO establishes rules regarding international trade, and sees that these rules are obeyed. At present 164 countries of the world are currently members of the 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. On the other hand, WTO rules have forced the developing countries to remove trade barriers. An example of this is the current debate on trade in agricultural products.

(i) In which year did the WTO officially commence its operations?
(a) 1994
(b) 1995
(c) 1991
(d) 1993
Answer : (b) 1995

(ii) Which of the following is/are the function(s) of the World Trade Organisation (WTO)?
(a) To provide a forum for negotiations.
(b) To provide a platform for settling disputes.
(c) To liberate the international trade.
(d) All of the above
Answer : (d) All of the above

(iii) According to the passage, what is an appropriate reason of unfair treatment of WTO with respect to developing countries?
Answer : To remove trade barriers

(iv) Which organisation has been replaced by the World Trade Organisation?
Answer : General Agreement on Tariffs and Trade (GATT)

Question. Read the source given below and answer the questions by choosing the most appropriate option.

 Ford Motors, an American company, is one of the world’s largest automobile manufacturers with production spread over 26 countries of the world. Ford Motors came to India in 1995 and spent Rs. 1700 crore to set up a large plant near Chennai. This was done in collaboration with Mahindra and Mahindra, a major Indian manufacturer of jeeps and trucks. By the year 2004, Ford Motors was selling 27,000 cars in the Indian markets, while 24,000 cars were exported from India to South Africa, Mexico and Brazil. The company wanted to develop Ford India as a component supplying base for its other plants across the globe.

(i) The passage given above relates to which of the following options?
(a) Increased employment
(b) Foreign investment
(c) Foreign collaboration
(d) International competition
Answer : (b) Foreign investment

(ii) According to the given passage, Ford Motors can be termed as a Multi-National Company based on which of the following options?
(a) Production of different types of automobiles
(b) Largest automobile manufacturer in the world
(c) Because of large scale exports of cars across globe
(d) Industrial and commercial ventures across globe
Answer : (d) Industrial and commercial ventures across globe

(iii) What did Ford Motors want by setting up their production plants in India?
Answer : Tap the benefits of low cost production and a large market.

(iv) What does ‘Ford Motors’ want to develop Ford India as a component supplying base for its other plants across the globe?
Answer : Interlinking of production across countries.