VELAMMAL BODHI CAMPUS- VELLORE
Class X GLOBALIZATION AND THE INDIAN ECONOMY
1. What are Multi-National Corporations (MNCs)?
A Multi-National Corporation (MNC) is a company that owns or controls production in more than one
nation..
2. What attracts MNCs to set up offices I different regions?
Closeness of the place to the markets.
Availability of skilled and unskilled labour at low costs.
Availability of other factors of production e., raw material, etc.
Government’s favourable policies
Earn greater profit
3. How we can prove that production is organised in a complex way in an MNC?
China provides the cheap manufacturing location.
Mexico and Eastern Europe are useful for their closeness to market
India has highly skilled and unskilled labourers.
Company’s customer care is carried out around the world.
4. Differentiate between investment and foreign investment.
The money that is spent to buy assets (land, building, machines and other equipment’s) is called
investment, while the investment made by the MNCs is called foreign investment.
5. How are local companies benefitted by collaborating with multinational companies? Explain with
examples.
:
First, the MNCs provide money for additional investments for faster production.
Second, MNCs bring with them the latest technology for enhancing and improving the production.
Globalization has enabled some companies to emerge as multinationals.
6. How the MNCS spread their production in different countries?
BY setting up partnerships with local companies
By using the local companies for supplies
By closely competing with the local companies or buying them
7. What are the benefits of foreign trade?
Foreign trade creates an opportunity for the producers to reach beyond the domestic market
Producers cam compete international market
Buyers have more choice of goods
Goods travel from one market to another
Prices of similar goods in the two markets tend to become equal.
8. How has information and communication technology stimulated globalisation process? Explain with
examples.
Rapid improvement in technology has contributed greatly towards globalisation.
Advanced technology in transport systems has helped in the delivery of goods faster across long
distances at lower costs.
Development in information and communication technology has also helped a great deal..
Information technology has also played an important role in spreading out production of services
across countries.
9. What do you understand by globalisation?
Globalization is the process of rapid integration or interconnection among countries. It is the
integration between countries through foreign trade and foreign investments by multinational
corporations
10. Explain any three advantages of globalization.
Under this process, goods and services along with capital, resources and technology can
move freely from one nation to another.
It has increased the movement of people between countries. People usually move from one
country to another in search of better income, better jobs or better education.
Rapid improvement in technology has been one major factor that has stimulated the
globalization process
Globalization has resulted in greater competition among producers and has been of
advantage to consumers, particularly the well-off section.
Rich people now enjoy improved quality and lower prices for several products.
11. What is meant by trade barrier?
Barriers or restrictions that are imposed by the government on free import and export activities are
called trade barriers. Tax on imports is an example of a trade barrier
12. Why had the Indian Government put barriers to foreign trade and foreign investment after
independence?.
The Indian government after independence had put barriers to foreign trade and investment.
This was done to protect the producers within the country from foreign competition.
To protect the Indian economy from foreign infiltration in industries affecting the economic
growth of the country as planned.
India allowed imports of only essential items such as machinery, fertilizers, petroleum etc.
13. Define the term liberalization. Explain the reasons why the Indian Government started the policy of
liberalization in 1991.
Removing barriers or restrictions set by the government on foreign trade and foreign investment is
what is known as liberalization. The Indian Government removed these barriers because:
Liberalization of trade and investment policies allows Indian producers to compete with producers
around the globe leading to an improvement in performance and quality of products.
Goods could be imported and exported easily and also foreign companies could set up factories and
offices in India.
14. Give the meaning of WTO?
WTO (World Trade Organization
15. What is the major aim of WTO?
WTO believes that there should not be any barriers between trade of different countries. Trade
between countries should be free.
Aims of WTO:
To liberalize international trade.
To establish rules regarding international trade.
16. Mention any two shortcomings of WTO?
Two shortcomings of 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 and continued to provide protection to their
producers.
On the other hand WTO rules have forced the developing countries to remove trade barriers
17. How has globalization been advantageous to both the producers as well as the consumers in India?
Explain.
To Producers: Several of the top Indian Companies have been able to benefit from the
increased competition.
They have invested in newer technology and production methods and thereby raised their
production standards.
They have gained from successful collaborations with foreign companies.
Globalization helped in the development of IT sector.
Good quality products are being produced at lower prices.
To Consumers: There is greater choice before consumers who can enjoy improved quality and
lower prices for several products.
People today, enjoy much higher standards of living than was possible earlier.
18. What is the meaning of SEZ? Mention any three features of SEZ.
SEZ or Special Economic Zones are industrial zones set up by the Central and State Governments
with world class facilities in electricity, water, roads, transport, storage, recreational and
educational facilities.
Three features of SEZ:
The companies who set up production units in the SEZs do not have to pay taxes for an
initial period of five years.
Government has also allowed flexibility in the labour laws to attract foreign investment.
This is done to reduce the cost of labour for the company.
These are being set up to attract foreign companies to invest in India.
19. Describe the steps that may be taken make globalisation more ‘fair’.
Answer:
The following steps may be taken to make globalisation more fair :
Labour laws should be implemented properly to avoid exploitation of the workers.
The government should protect the interest of the small producers by using trade and
investment barriers
The government should negotiate at the WTO for “fairer rules”.
The government should align with other developing countries to fight against the
domination of developed countries.
