Extra Questions for Class 10 Economics Ch 4 Globalisation And The Indian Economy

 Important Questions for Class 10 Economics (S.St) Ch 4 Globalisation and the Indian Economy

Fill in the Blanks
1. Investment made by MNCs is called ....................... investment. (Foreign, Domestic)
Answer: Foreign

2. WTO was started at the initiative of ........................ countries. (Developing, Developed)
Answer: Developed

3. A MNC is a company that owns production in .................. nation. (more than one, two)
Answer: more than one

4. India is a ............. country. (Developed, Developing)
Answer: developing

5. Agmark is meant for the standardisation of the ....................... (Industrial product, Agricultural product)
Answer: Agricutural product

6. Meaning of MRP is ...................... (maximum retail price, minimum retail price)
Answer: Maximum Retail Price

Choose True or False

1. A MNC is a company that owns or controls production, income of more than one nation. (True, False)
Answer: True

2. WTO was set up to provide trade among member countries. (True, False)
Answer: True

3. Liberalisation means increasing government interference in economic activities. (True, False)
Answer: False

4. WTO rules have forced the developing countries to remove trade barriers. (True, False)
Answer: True

Very Short Answer Type Questions

1. What is globalisation ?
Answer:
The globalisation means unification or integration of the domestic economy with the world economy by interaction and interdependence.

2. Define liberalisation.
Answer:
Liberalisation means reducing government interference in economic activities and encouraging privatisation.

3. What is privatisation ?
Answer:
Privatisation means encouraging private sector and discouraging public sector.

4. Explain two policy initiatives of globalisation in India.
Answer:
At first the government has encouraged investors from abroad to invest in India and second to remove restrictions on import of goods and reduce taxes on imported goods.

5. What is multinational corporation ?
Answer:
A MNC is a company that owns or controls production in more than one nation.

6. What is a Market Mechanism ?
Answer:
Price of the goods and services is determined on the basis of market demand and supply without any government or internal interference. This is called market mechanism.

7. Write two objectives of Liberalisation.
Answer:
  1. Removing the obstacles in the process of economic development
  2. Widening the scope of private sector
8. Why was World Trade Organisation set up ?
                               Or
     Explain in brief three objectives of W.T.O
Answer:
World Trade Organisation was set up to promote trade among member countries. It also handles trade disputes. WTO forms rules and regulations which all the members have to adopt for the betterment of trade.

9. What is Brain Drain ?
Answer:
The migration of skilled people to other nations in search of better opportunities and employment is known as brain drain.

10. What is tariff ?
Answer:
A tax or a duty on imports, which can be levied on physical units is called Tariff.

11. Define sustainable economic development.
Answer:
Sustainable economic development is a process which satisfies the need of the present generation without causing any trouble to the efficiency of future generations to meet their own needs and the development should take place without damaging the environment.

12. Explain how has private sector been freed from regulations during liberalisation ?
Answer:
The private sector has been freed from many regulations during the era of liberalisation such as :
  • This sector was free from licensing.
  • Granted permission to import raw materials.
  • Regulation on price and distribution.
  • Imposed restrictions on investment by large business comapnies.

Short Answer Type Questions

1. Analyse one good and one bad effect of globalisation in India.
Answer:
Good and bad effect of globalisation in India --Globalisation has been of advantge of consumers particularly the well-off sections in the urban areas of India. There is greater choice before these consumers who now enjoy improved quality and lower prices for several products. As a result, these people today, enjoy much higher standards of living than was possible earlier. For a large number of small producers and workers, globalisation has posed major challenges in India. Due to globalisation and the pressure of competition, most employees these days prefer to employ workers "flexibly". This means that workers' jobs are no longer source in India.

2. Why did the Indian government put barriers on foreign trade and foreign investment after independence ?
Answer:
The Indian government, after independence, had put barriers to foreign trade and foreign investment. This was considered necessary to protect the producers within the country from foreign competition. India allowed imports of only essential items such as machinery, fertilisers, petroleum etc. In 1991 the government decided that the time has come for Indian producers to compete with producers around the globe. It felt that competition would improve their quality. Thus barriers on foreign investment were removed to large extent.

3. What is the World Trade Organisation ? Why was it set up ?
Answer:
World Trade Organisation (WTO) has emerged as an important international organisation which has encouraged economic liberalisation in the world. It was set up in 1995 by the member countries of the United Nations to promote international trade and help its growth in an orderly manner.

4. Explain two impacts of WTO on the Indian Economy.
Answer:
Two impacts of WTO on he Indian Economy are as follows :
  1. WTO gives an opportunity to India for trading with other  member countries of the world.
  2. Due to the membership of WTO it is expected that the technology from developed countries will be availale to India at reduced cost.
5. Explain any two invisible changes in Indian economy due to the adoption of Liberalization and Globalisation.
Answer:
Two invisible changes  in the Indian economy are as follows :
  1. India's share in the world trade of goods and services has increased marginally. But this progress is very slow as compared to other developing countries.
  2. Investment from other countries (F.D.Is) to produce goods and services in India has increased.
6. Define Globalisation. How does this take place ?
Answer:
Globalisation means integrating our economy with the world economy. In this process we become economically interpendent at the global or international level. Globalisation takes place at varous levels. This facilitates those who have capital to establish enterprises in India, produce goods for sale within the country or export them. Many producers from outside the country can sell their goods and services in India. India can also produce goods and services and sell them to other countries.

7. Explain any three merits of Liberalisation.
Answer:
Following are the main merits of liberalisation :
  • Removal of Control and Restriction
  • Expansion of industries
  • Reduction in monopoly laws
8. What is Privatisation ? What are its merits and demerits  ?
Answer:
Privatisation means, the induction of private management and control in the public sector enterprises.
Merits :-
  • Privatisation would release tangible and intangible resouces such as large manpower locked up in managing PSU's and release them for development in high priority social sector.
  • Privatisation would expose privatised companies to market disciplines and help them become self - reliant.
Demerits :-
  • The loss of PSU's is rising. It was 9305 crore in 1998 and 10060 crore in 2000.
  • The growth in social sector is not in any way hindered by non-availability of manpower.
9. Give arguments against globalisation.
Answer:
  • Globalisation causes unemployment in industrialized countries because firms move their factories to places where they can get cheaper workers.
  • Globalisation may lead to more environmental problems. A company may want to build factories in other countries because environmental laws are not as strict as they are at home.
  • Globalisation can lead to financial problems.
  • Human, animal and plant diseases can spread more quickly theough globalisation.
10. Explain the good effects of globalisation on India.
Answer:
  • Globalisation lets countries do what they can do best.
  • Globalisation gives us larger market.
  • Consumer also profit from globalisation. Products become cheaper and you can get now goods more quickly.
11. Explain any three advantages of foreign trade.
Answer:
  1. Import of required Goods - Foreign trade enables the underdeveloped countries to import capital goods and essential raw materials which are required for their economic development.
  2. To Earn Foreign Exchange - Foreign trade also enables the countries to procure foreign exchange.
  3. To Control Prices - Import and export often reduce the violent fluctuations of prices of those commodities which are scarce or in surplus.

Long Answer Type Questions

1. What is globalisation ? How has it affected India ?
                             or 
     Describe in brief good effect of Globalisation on India.
Answer:
Globalisation means integrating the economy with the world economy. Globalisation holds that the Indian economy must be closely related to the world economy so that there is a largely unrestricted exchange of goods, technology and experience between them relatively free flow of capital from developed countries in India. In pursuance of this policy India is affected in the following ways :
  • The quantitative restriction has been increasingly done with.
  • Rates of import duty have been reduced.
  • Restrictions on free flow of foreign private investment have been largely removed or greatly reduced.
2. Which are the areas of reforms that are yet to be taken up in India ?
Answer:
These areas of reforms that are yet to be taken up in India are textiles, agriculture and industrial tarrifs. The WTO has also so far not succeeded in effectively providing any special treatment to the developing countries and introduce new measures in matters of investment, competition, environment and many other areas which are not related to trade.

3. Give six arguments against the functioning of W.T.O.
Answer:
Following arguments are given against W.T.O
  1. Critics are of the opinion that after concluding W.T.O. agreements subsidy to agricultural sector will be started.
  2. It is feared that WTO will adversely affect the service sector also.
  3. If patents for common products like medicines, foodgrains, chemicals etc. are recognised, then developing countries will have to pay huge royalty to the patentholders. It will result in price rise.
  4. It is apprehended that by entering into WTO agreements, surplus foodgrains of developed countries will be imported on a large scale.
  5. There is a necessary condition to import the total consumption of the fodgrains in the country.
  6. According to this agreement the use of scientific and agricultural brand seeds for the business objective could not be possible. Small and marginal farmers will not be able to use high yielding varities of seeds. It will further lead to increase in economic disparity.
4. What is meant by liberalisation ? Describe in brief the measures adopted for it in India.
Answer:
Liberalisation means liberating the trade and industry from unnecessary restrictions and making the industries more competitive.
The following methods were adopted under liberalisation :
  • The number of industries reserved for the public sector was reduced from 17 to 4 and in the areas reserved for public sector, private sector's participation was to be allowed.
  • Monopolies and Restrictive Trade Practices Act (MRTP Act) was liberalised. According to the provision of MRTP Act, all those firms having assets worth more than 100 crore were used to be declared as MRTP firms and were subjected to many restrictions. Now, the concept of MRTP has been abolished. These firms are now free to expand themselves.
  • Under the policy of liberalisation industries are now free for expansion and production. Producers are now free to produce anything on the basis of demand in the market. Licensing was abolished and as a result, firms are free to expand their production capacity.
  • Investment limit of the small scale industries has been raised to ₹ one crore to enable them for modernisation.
  • Automatic approval is granted for foreign direct investment upto 51 per cent in a wide range of industries.
  • Under liberalisation process Indian industries are now free to buy machinery and raw material from abroad. Government has also allowed the industries to import technology for their modernisation from abroad.
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