Globalization & the Indian Economy: Class 10 Important Questions & Answers

Embark on a journey to conquer Chapter 4 of your Class 10 Economics syllabus with this comprehensive guide to Globalization and the Indian Economy: Class 10 Questions and Answers for Success!

Whether you're aiming for a perfect score in your upcoming CBSE board exams or simply want to solidify your understanding of this crucial topic, this blog post is your ultimate resource.

We've meticulously compiled a collection of important questions and detailed answers covering all aspects of the relationship between globalization and the Indian economy. These Q&As, conveniently available in a downloadable PDF format, will equip you with the knowledge and confidence to ace your exams.

But that's not all! to further enhance your preparation, we've included a bonus section of extra questions and answers, designed to challenge your understanding and refine your critical thinking skills.

So, grab your notebooks, sharpen your pencils, and get ready to master globalization and its impact on the Indian economy! With this comprehensive guide by your side, you'll be well on your way to exam success.

Subject	Social Science (Economics)
Class	10
Board	CBSE and State Boards
Chapter No.	4
Chapter Name	Globalization and the Indian Economy
Type	Important Questions & Answers
Session	2024-25

"Do not wait for opportunities to come. Create them."

- Shigeo Takeuchi

Globalization and the Indian Economy Class 10 Questions & Answers

Q. No. 1) Multiple Choice Questions (MCQs)

i. What is a multinational company?

a. A company that has its headquarters only in India

b. A company that has its production center in India

c. A company that has its production and distribution centers in more than one country

d. A company that is situated outside India

Ans. Option (c)

ii. Investment made by MNCs is called _____.

a. Investment

b. Foreign trade

c. Foreign investment

d. Disinvestment

Ans. Option (c)

iii. A multinational company (MNC) is a corporate organization that owns and controls production in more than one country.

Accordingly, which of the following countries has the BEST potential for an MNC to be set up?

a. Country W has a rich culture and ample biodiversity.

b. Country X provides loans to foreign companies easily at high-interest rates.

c. Country Y has an educated workforce ready to work for affordable remuneration.

d. Country Z has a rule which allows people from a specific religion to conduct business freely.

Ans. Option (c)

iv. Which of the following is NOT an example of the process of globalization?

a. Google's headquarters are in California with multiple offices across the world

b. Railways being the largest public sector undertaking employer in India

c. Mcdonald's introducing McAloo Tikki, especially for the Indian menu

d. Spanish family having masala dosas for their weekend breakfast

Ans. Option (b)

v. Name the basic factor that enables globalization.

a. Technology

b. Human resources

c. Trade

d. All of the above

Ans. Option (a)

vi. Identify the correct statements about globalization.

1. Removal of barriers by the government
2. Foreign companies are allowed to set up factories
3. Has enabled all companies to increase their investments
4. Has lessened foreign investment and foreign trade

OPTIONS:

a. I & II

b. II & III

c. I & III

d. II & IV

Ans. Option (a)

vii. Tax on imports is an example of _____.

a. Quotas

b. Trade barrier

c. Investment

d. Disinvestment

Ans. Option (b)

viii. When did the Indian Government introduce a policy of liberalization known as the ‘New Economic Policy’?

a. 1980

b. 2000

c. 1994

d. 1991

Ans. Option (d)

ix. Liberalization is _____.

a. More trade

b. Removing barriers or restrictions set by the government

c. Checking barriers by the government

d. Help from the government

Ans. Option (b)

x. Which of the following policy decisions by the central government could potentially serve as a trade barrier?

(a) strengthening export subsidies

(b) simplifying customs procedures

(c) implementing higher tariffs on imports

(d) promoting fairer trade practices globally

Ans. Option (c)

xi. Which of the following international agencies allow free trade and work on mutual trade between countries?

a. WTO

b. IMF

c. UPU

d. FAO

Ans. Option (a)

xii. SEZs stand for _____.

a. Special electricity zones

b. Southern electricity zones

c. Special economic zones

d. None

Ans. Option (c)

xiii. Read the given statements in the context of ‘globalization’ and choose the correct option –

a. It is the only way for the 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. This leads to the spread of technology, cultures, and diseases from one region to another

Ans. Option (d)

xiv. A situation in which all the countries reap equally the benefits of foreign trades equally is known as _____.

a. Internationalization

b. Fair globalization

c. Liberalization

d. Equal globalization

Ans. Option (b)

xv. Evaluate the impacts of opening foreign trade on the global economy by identifying the appropriate statements among the following options:

1. The choice of goods in the markets increases.
2. Producers from two countries closely compete against each other despite the distance between their locations.
3. Foreign trade thus results in connecting the markets or integration of markets in different countries.
4. The quality of the product is always good.

Options:

a. Statements 1 and 2 are appropriate.

b. Statements 1, 2, and 3 are appropriate.

c. All the statements are appropriate.

d. Only statement 4 is appropriate.

Ans. Option (b)

Q. No. 2) Case-Based Question

I. Read the source given below and answer the following questions –

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.

Answer the following MCQs by choosing the most appropriate option

i. The passage given above relates to which of the following options?

a. Increased employment

b. Foreign investment

c. Foreign collaboration

d. International competition

Ans. Option (b)

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 largescale exports of cars across the globe

d. Industrial and commercial ventures across the globe

Ans. Option (d)

iii. By setting up their production plants in India, Ford Motors wanted to

a. Collaborate with a leading Indian Automobile company

b. Satisfy the demands of American, African, and Indian markets

c. Tap the benefits of low-cost production and a large market

d. Take over small automobile manufacturing units in India

Ans. Option (c)

iv. ‘Ford Motors' wish to develop Ford India as a component supplying base for its other plants across the globe is evidence of

a. Promoting local industries in India

b. Merging trade from different countries

c. Supplying jobs to factory workers in India

d. Interlinking of production across countries

Ans. Option (d)

Q. No. 3) 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 centers
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

Ans. i - b, ii - e, iii - d, iv - c, v - a.

Q. No. 4) What are multinational corporations (MNCs)?

Ans. An MNC is a company that owns or controls production in more than one nation. MNCs set up offices and factories for production in regions where they can get cheap labor and other resources. This is done so that the cost of production is low and the MNCs can earn greater profits.

Q. No. 5) In what ways Multi-National Corporations (MNCs) different from other companies? Explain with an example.

Ans.

1. Domestic companies tend to restrict their operations to the country of origin, while multinational corporations operate in more than two countries. Ex- Infosys
2. Companies (Infosys) expand globally for many reasons, mostly to obtain new markets, cheaper resources, and reduction in operational costs, all of which significantly affect financial management. These benefits also increase the risks faced by multinational corporations.
3. Unlike their domestic financial management counterparts, multinationals are subject to exchange rates that differ based on the prevailing inflation rate in the foreign countries where they operate.

Q. No. 6) Differentiate between investment and foreign investment.

Or,

What are investments made by MNCs called and with what expectations are these investments made?

Ans. The money that is spent to buy assets such as land, building, machines, and other equipment is called investment.

The investment made by MNCs is called foreign investment. It is done with the expectation of earning more profits by reducing the cost of production.

Q. No. 7) How are local companies benefited from collaborating with multinational companies? Explain with examples.

Or,

The MNCs of a country sets up production jointly with the local company of other countries. State any one benefit of this joint production to the local company.

Ans. The local companies are benefited by collaborating with multinational companies in the following ways:

1. MNCs provide money for additional investments, like buying new machines for faster production.
2. MNCs might bring with them the latest technology for production.

Q. No. 8) Which is the most common route for investment by MNCs in countries around the world?

Ans. To buy up local companies and then expand production.

Q. No. 9) How do multinational corporations adopt multiple strategies to spread their production?

Or,

How are multinational corporations (MNCs) controlling and spreading their productions across the world? Explain.

Or,

How do MNCs interlink production across countries?

Ans.

1. MNCs set up their production units in those areas where they can save on their cost of production.
2. It sets up production jointly with some of the local companies of the selected countries.
3. Sometimes large MNCs place orders for production with small producers and provide them money for additional investments and then sell the products under their own brand name at much higher rates in foreign countries.
4. Sometimes MNCs buy local companies and then expand their production.

Q. No. 10) What is foreign trade? How does it lead to the integration of markets across countries?

Ans. Foreign trade is the exchange of goods – purchase and sale – across geographical boundaries of countries.

• Goods travel from one market to another.
• Choice of goods available in the market increases.
• Prices of similar goods in different markets tend to become equal.
• Producers in two countries closely compete against each other even though they are separated by geographical boundaries.

Q. No. 11) What is globalization? Describe the role of Multinational Corporations (MNCs) in promoting the globalization process.

Ans. Globalization is the process of rapid integration or interconnection between countries.

Role of MNCs in promoting globalization:

• Goods and services are bought and sold at a global level.
• Investments, technology, and people are moving between countries.
• MNCs by foreign trade integrated the markets in the world.

Q. No. 12) Describe the role of technology in promoting the globalization process.

Or,

Examine the role of information technology in stimulating the process of globalization.

Or,

‘Rapid improvement in technology has stimulated the globalization process.’ Justify through examples.

Ans. Rapid improvement in technology has stimulated the globalization process.

• Improvements in transportation technology have made much faster delivery of goods across long distances possible at lower costs.
• Even more remarkable have been the developments in information and communication technology.

Role of Information Technology in stimulating the process of globalization

• Telecommunication facilities (telegraph, telephone including mobile phones, fax) are used to contact and access information.
• Helps to communicate from remote areas.
• This has been facilitated by satellite communication devices.
• Computers have now entered almost every field of activity.
• One can obtain and share information through the internet.
• Electronic mail (e-mail) and talk (voice-mail) across the world at negligible costs.
• Has played a major role in spreading out the production of services across countries.

Q. No. 13) What is a trade barrier? Why did the Indian government put up trade barriers after independence? Explain.

Ans. Restrictions set by the government to increase or decrease (regulate) foreign trade is called trade barriers.

For example tax on imports, quotas (the government places a limit on the number of goods that can be imported), etc.

Reasons for putting trade barriers after independence:

• Governments use trade barriers to regulate foreign trade.
• Trade barriers were used to protect domestic industries from foreign competition.
• The competition from foreign competitors could have crippled the newborn industries in India.

Q. No. 14) A group of companies in India wishes to import high-quality ACs from South Korea but have to pay a huge import tax on them which would make the ACs very expensive leading to a decline in their sale. Ascertain the role of the import tax in this situation.

Ans. The Import tax is acting as a Trade Barrier.

Q. No. 15) Define the term ‘liberalization’. Explain the reasons for the Indian Government beginning the policy of liberalization in 1991.

Ans. Removing barriers or restrictions set by the government is known as liberalization.

• The Indian government wanted domestic producers to face global competition.
• Completion would improve the quality of the goods.
• International organizations supported this.

Q. No. 16) What is the main aim of the World Trade Organization? Explain its functions.

Ans. The main aim of WTO is to liberalize international trade.

Functions of WTO:

• It establishes rules regarding international trade and sees that these rules are obeyed.
• To establish a forum for trade negotiations.
• To handle trade disputes.

Q. No. 17) Assess the positive and negative impact of WTO on the Indian economy.

Ans. Positive impact:

• Offered an opportunity to India for trading with other member countries.
• Availability of foreign technology to India at a reduced cost.

Negative impact:

• Many laws of WTO are unfavorable to developing countries like India.
• Developed countries have ignored the rules of WTO and have continued to support their farmers with vast sums of money, whereas developing countries have stopped doing so.

Q. No. 18) “Globalization and greater competition among producers have been advantageous to consumers.” Justify the statement with examples.

Ans. The consumers are getting an advantage in the following ways:

• Consumers today have a wide variety of goods and services to choose from. The latest models of digital cameras, mobile phones, televisions, etc. from the world’s leading manufacturers are available to them.
• They get better quality products at lower prices.
• Greater competition among producers has raised production standards.
• It has resulted in a high standard of living.

Q. No. 19) What are the harmful effects of MNCs on a host country?

Ans. The harmful effects of MNCs on a host country are:

• They can hamper the growth of local industries by giving them tough competition.
• They generally use capital-intensive techniques which may not be suitable for a developing country like India, where unemployment is a big problem.
• They may misuse the environment of the host country by over-exploiting its natural resources.

Q. No. 20) Analyze the Impact of globalization.

Or,

The effect of Globalisation has not been uniform’. Do you agree? Give reasons to support your answer.

Or,

Critically examine the impact of globalization in India.

Ans. Positive

1. A wide variety of goods is now available to consumers.
2. Good quality products are available at lower prices.
3. New jobs are created in industries.
4. Local companies have prospered by supplying raw materials to the industries.
5. Top Indian companies like Tata Motors, Infosys, Ranbaxy, have emerged as MNCs.
6. Some local companies have been able to invest in newer technology and production methods.

Negative

1. Globalization may not help in achieving sustainable development
2. It may lead to the widening of income inequalities among various countries.
3. It may lead to greater dependence of underdeveloped countries on advanced countries.
4. Flexibility in labor laws.
5. Cut in farm subsidies.
6. Closure of small industries.

Q. No. 21) What is the meaning of SEZ? Mention any two features of SEZ.

Ans. SEZ stands for Special Economic Zones. These are industrial zones set up by the government with world-class facilities: electricity, water, roads, transport, storage, recreational and educational facilities, to attract foreign companies to invest in their countries.

The features of SEZs are:

• The companies that set up production units in the SEZs do not have to pay taxes for an initial period of five years.
• These areas have world-class facilities: electricity, water, roads, transport, storage, recreational and educational facilities.

Q. No. 22) How is the government of India trying to attract more foreign investment? Explain.

Ans. Steps to attract foreign investment:

1. Special Economic Zones (SEZs): These are industrial zones set up by the government with world-class facilities: electricity, water, roads, transport, storage, recreational and educational facilities, to attract foreign companies to invest in their countries. MNCs will not have to pay taxes for an initial period of 5 years if they set up their production units in the SEZs.
2. Flexibility in labor laws: The government has allowed flexibility in the labor laws to attract foreign investment. Instead of hiring workers on a regular basis, companies hire workers ‘flexibly’ for short periods when there is intense pressure of work. This is done to reduce the cost of labor for the company.

Q. No. 23) What is meant by ‘Fair Globalisation’?

Ans. Fair globalization:

• Would create opportunities for all,
• Ensure the benefits of globalization are shared better.

Q. No. 24) How can the government ensure that globalization is fair and its benefits are shared in a better way by all?

Ans.

1. Government policies must protect the interests, not only of the rich and the powerful but all the people in the country.
2. It should ensure that the labor laws are properly implemented and the workers get their rights.
3. It can support small producers to improve their performance till the time they become strong enough to compete. If necessary, the government can use trade and investment barriers.
4. It can negotiate at the WTO for fairer rules.
5. It can also align with other developing countries with similar interests to fight against the domination of developed countries in the WTO.

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