We have provided you with Extra and Important Questions from Class 10 Social Science Economics Chapter 4 Globalisation and the Indian Economy. This Extra and Important Questions will help you to score 100% in your Board Exams. These extra questions will be helpful to revise the important topics and concepts.
Globalisation and the Indian Economy Class 10 Important Questions with Answers Economics Chapter 4
Extra Questions for Class 10 Economics Chapter 4 Very Short Answer Type
Question: What is Globalisation? [CBSE (F) 2017]
Answer: Globalisation is the process of rapid integration or interconnection between countries.
Question: What is an MNC?
Answer: A multinational company is a company that owns or controls production in more than one nation.
Question: How are MNCs able to gain greater profits?
Answer: MNCs set up offices and factories for production in regions where they can get cheap labour and other resources. This is done so that the cost of production is low and the MNCs can earn greater profits.
Question: What do you understand by the term ‘Investment’?
Answer: The money that is spent to buy assets such as land, buildings, machines and other equipment is called ‘Investment’ which would later fetch them profits.
Question: What is the most common route for MNC’s investment?
Answer: The most common route for MNC’s investment is to buy up local companies and then expand the production. MNCs with huge wealth can do so quite easily.
Question: Give examples of industries where production is carried out by a large number of small producers around the world.
Answer: Garments, footwear and sports items are examples of industries where production is carried out by a large number of small producers around the world.
Question: Why are Chinese toys so popular in India?
Answer: Buyers in India now have the option of choosing between Indian and Chinese toys. Because of the cheaper prices and new designs, Chinese toys became more popular in the Indian markets.
Question: What is the contribution of improvement in transport technology to stimulate the era of globalisation?
Answer: For the past fifty years, there have been several improvements in transportation technology. This has made much faster delivery of goods across long distances possible at lower costs.
Question: What is a ‘trade barrier’?
Answer: Tax on imports by the Government is called ‘trade barrier’. It is called a barrier because some restrictions have been set up.
Question: What does the term ‘liberalisation’ mean?
Answer: Removing barriers or restrictions set by the government is known as ‘liberalisation’.
Extra Questions for Class 10 Economics Chapter 4 Short Answer Type
Question: What is investment? How is foreign investment different from it?
Answer: The money that is spent to buy assets such as land, building, machines and other equipment is called investment.
Investment made by MNCs is called foreign investment. Every investment is made with the hope that the assets will earn profits for these companies.
Question: How does foreign trade integrate the markets of different countries? Explain with examples. [CBSE (F) 2016]
Answer: Integration of Foreign markets:
- Producers reach beyond the domestic market.
- Producers compete with markets located in other countries of the world
- There is expansion of choice of goods beyond the domestic market.
- Producers in the two countries closely compete against each other.
Question: Why had the Indian government put barriers to foreign trade and foreign investments after independence? Analyse the reasons. [CBSE (AI) 2016]
Answer: Indian government has put barriers to foreign trade and foreign investments after independence because:
- It wanted to protect the producers within the country from foreign competition.
- As the industries were just coming up in 1950s and 1960s, the competition from inputs at that stage would not have allowed these industries to come up.
- Indian allowed imports of only essential items such as machinery fertilizers, petroleum, etc.
Question: Describe any five advantages to consumers due to globalisation and greater competition among producers. [CBSE (F) 2017]
Answer: Globalisation and greater competition among producers, both local and foreign producers have been of advantage to consumers.
- There is a greater choice before consumers along with competitive price.
- They enjoy improved quality and lower prices for several products.
- They enjoy much higher standards of living that was possible earlier.
- Strengthening of Consumer Rights like – Right to Information, Right to Choose, Right to be Heard, and Right to Seek Redressal has been given to consumers.
- Legal rights of consumers have become more effective.
Question: “In a matter of years, Indian markets have been transformed with wide ranging choice of goods.” Support the statement with examples. [CBSE (Comptt.) 2017]
Answer: We have a wide variety of goods and services before us in the market.
- The latest models of the digital cameras, mobile phones and televisions made by leading manufacturers of the world 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.
Question: ‘Barriers on foreign trade and foreign investment were removed to a large extent in India since 1991.’ Justify the statement. [CBSE (Delhi) 2016]
Answer: Removal of barriers on foreign trade and foreign investment:
- Barriers on foreign trade and foreign investment were partially removed.
- Goods could be imported and exported easily.
- Foreign companies could set up factories and offices here.
- Opportunities for Indian producers to compete with producers around the globe.
Question: Chinese toys have taken over the Indian toy market due to globalization and promotion of international trade leading to huge losses to Indian toy manufacturers. Do you think the mantra of “Boycott and Swadeshi” would be of any help today? Why or why not? [CBSE Sample Paper 2016]
Answer: We cannot deny the fact that Chinese toys have taken over the Indian toy market due to promotion of international trade and globalisation leading to huge losses to the Indian toy manufactures. In spite of this, ‘Boycott and Swadeshi’ mantra won’t help because
(a) With lifting of trade barriers, import and export of foreign goods have become easier and markets of native countries are flooded with foreign products.
(b) Prices of foreign products especially the Chinese items like toys are cheap and have a great variety to attract customers.
(c) Swadeshi and Boycott movements were relevant and worked because of the movement for Independence of our country. Today, the circumstances are different. Technology has made its mark. Foreign goods increase the revenue for the native countries. Moreover, free trade and marketing needs to be accepted for country’s economic growth.
Question: How are companies providing services benefitted by globalisation?
Answer: (i) Globalisation has also created new opportunities for companies providing services, particularly those involving IT.
(ii) There are Indian companies which are producing magazines for the London-based companies and call centres are also existing due to globalisation only.
(iii) Besides, a host of services such as data entry, accounting, administrative tasks, engineering are now being done cheaply in developing countries such as India and are exported to the developed countries.
Question: Explain by giving examples that Multinational Corporations (MNCs) are spreading their productions in different ways. [CBSE (AI) 2016]
Answer: Multinational Corporations are spreading their productions in different ways:
- By setting up partnership with local companies.
- By placing orders with local companies. For example, Garments, Footwear, Sports items, etc.
- By closely competing with the local companies.
- By buying local companies- For example, Cargill buying Parakh foods in India.
Which Indian companies have become MNCs with the competition in globalisation?
Answer: (i) Several of the top Indian companies have been able to benefit from the increased competition.
(ii) They have invested in newer technology and production methods and raised their production standards.
(iii) Globalisation has enabled some large companies to emerge as multinationals themselves like Tata Motors (automobiles), Infosys (IT), Ranbaxy (Medicines), Asian Paints (paints), Sundaram Fastners (nuts and bolts) are some Indian companies which are spreading their operations worldwide.
Question: How is foreign trade interlinking markets of different countries? Explain with example. [CBSE (F) 2017]
Answer: Foreign trade has interlinked markets of different countries.
- Foreign trade has been the main channel connecting countries.
- Foreign trade creates an opportunity for the producers to reach beyond the domestic markets.
- Producers can sell their produce in local and foreign market.
- It is one way of expanding the choice of goods.
- Choice of goods in the markets rises.
- Prices of similar goods in the two markets tend to become equal.
- Close competition with each other.
Extra Questions for Class 10 Economics Chapter 4 Long Answer Type
Question: Describe any four benefits of globalisation to the Indian economy. [CBSE (F) 2017]
Answer: Globalisation has benefitted Indian economy:
(i) Local companies supplying raw materials, etc. to these industries have prospered. Several of the top Indian companies have been able to benefit from the increased competition.
(ii) Investment in newer technology and production methods has raised their production standards. Some industries have gained from successful collaborations with foreign companies. It has enabled some large Indian companies to emerge as multinationals.
(iii) It has also created new opportunities for companies providing services, particularly those involving IT and many new jobs have been created in industries.
(iv) Host of services such as data entry, accounting, administrative tasks, and engineering are now being done cheaply in countries such as India and are exported to the developed countries.
Question: Which factors have stimulated the globalisation process?
Answer: The following factors have stimulated the globalisation process.
(i) Improvement in transportation: In the last fifty years, there have been a lot of improvements in transportation technology. This has made faster delivery of goods across long distances possible, at lower costs.
(ii) Development in information and communication technology: Technology in the areas of telecommunication and computers has been advancing rapidly.
(iii) Telecommunication: Telecommunication facilities like telephone, telegraph, mobiles, fax are used to connect people in the world. This has been made possible due to satellite communication devices.
(iv) Computers: They have now entered almost in every field of activity. In the amazing world of internet, we can obtain and share information on almost anything.
(v) Internet: Internet also allows us to send instant electronic mail (e-mail) and talk (voice mail) across the world at negligible cost. Even the payment of money from one bank to another can be made through e-banking.
Question: How was the liberalisation policy gradually adopted in India?
- After Independence, the Indian government had put barriers on foreign trade and foreign investment.
- Initially, Indian industries were just coming up after Independence, so competition from imports wouldn’t have allowed these industries to come up.
- In 1999, the government decided that the time had come for Indian producers to compete with the producers around the globe.
- It was felt that competition would improve the performance of domestic producers since they would improve the quality of their products.
- Thus, barriers on foreign trade and foreign investment were removed to a large extent.
- Now, goods could be imported and exported easily and foreign companies could also set up factories and offices here.
Question: How do MNCs manage the production in other countries?
- MNCs not only sell their finished products globally, but also produce the goods and services 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.
- 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. 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 MNCs.
Question: How did Ford Motors, an MNC, set its foot in India?
Answer: (i) Ford Motors, an American company, is one of the world’s largest automobile manufacturers with production spread over twenty-six countries of the world.
(ii) It came to India in 1995 and spent ` 1,700 crore to set up a large plant near Chennai.
(iii) This was done in collaboration with Mahindra and Mahindra, a major Indian manufacturer of jeeps and trucks.
(iv) By the year 2014, Ford Motors was selling 77,000 cars in the Indian markets, while another 77,000 cars were exported from India to South Africa, Mexico and Brazil.
(v) The company wanted to develop Ford India as a component supplying base for its other plants across the globe.
Question: “The impact of globalization has not been uniform.” Demonstrate with the help of illustrations. [CBSE Sample Paper 2016]
Answer: Since its introduction, globalisation of the Indian economy has come a long way. While globalisation has benefited well-off consumers and also producers with skill, education and wealth, many small producers and workers have suffered as a result of the rising competition.
Now people have wide range of products with improved quality and lower prices. They are enjoying much higher standards of living than earlier.
Removal of trade barriers and liberalization policies of the governments to facilitate globalization have hit the local producers and manufacturers hard.
Illustration: MNCs have increased their investments in India over the past 20 years, which means investing in India has been beneficial for them. MNCs have been interested in industries such as cell phones, automobiles, electronics, soft drinks, fast food or services such as banking in urban areas. These products have a large number of well-off buyers. In these industries and services, new jobs have been created. Also, local companies supplying raw materials, etc. to these industries have prospered.
Globalisation and the pressure of competition have substantially changed the lives of workers. Faced with growing competition, most employers these days prefer to employ workers ‘flexibly’. This means that workers’ jobs are no longer secure.
Illustration: Batteries, capacitors, plastics, toys, tyres, dairy products, and vegetable oil are some examples of industries where the small manufacturers have been hit hard due to competition.
Several of the units have shut down rendering many workers jobless. The small industries in India employ the largest number of workers (20 million) in the country, next only to agriculture.