CBSE Class 10 Social Science Globalisation and the Indian Economy Important Questions Set 05

Important Questions

Question 1. Removing barriers or restrictions set by the government on foreign trade and investment is known as: (a) Globalisation (b) Privatisation (c) Nationalisation (d) Liberalisation?
Answer:
(d) Liberalisation — the removal of government-imposed barriers on foreign trade and investment.

Teacher's Note:
a) Liberalisation means removing trade/investment barriers.
b) It is a policy step that then enables globalisation.

Question 2. How is foreign trade interlinking markets of different countries? Explain with an example.
Answer:
Through trade, goods travel from one market to another.
The choice of goods in markets increases, and prices become more competitive.
Producers compete closely with each other, and the best products become successful.

Teacher's Note:
a) Foreign trade links markets by moving goods across borders, widening choice and sharpening competition.
b) This pushes producers to improve quality and pricing to succeed.

Question 3. What are Special Economic Zones (SEZs)? Why is the government setting up SEZs?
Answer:
SEZs (Special Economic Zones) are industrial areas with world-class facilities.
Companies that set up units in SEZs are exempted from tax for 5 years.
They are set up to attract foreign investment.

Teacher's Note:
a) SEZs offer world-class infrastructure plus a 5-year tax exemption.
b) Their main purpose is attracting foreign investment into India.

Question 4. Why had the Indian government put barriers on foreign trade and foreign investments after Independence? Analyse the reasons.
Answer:
To protect local producers and goods from foreign competition.
Industries needed protection in their early stages so they could grow and develop, in order to be ready to compete with developed countries later on.
It imposed restrictions on the import of certain goods.
Reasons to later remove these barriers were: to face competition and improve product quality; to attract foreign investment; and to get more orders for production.

Teacher's Note:
a) Early trade barriers protected infant Indian industries from foreign competition.
b) These were later removed to force competitiveness and attract foreign investment.

Question 5. “Foreign trade is an important component of globalisation.” Explain any three points in this regard.
Answer:
Foreign trade implies the exchange of goods and services across countries.
It helps expand the size of the market for producers.
Producers and consumers can access commodities produced in any part of the world through foreign trade.

Teacher's Note:
a) Foreign trade expands markets for producers and choices for consumers.
b) This cross-border exchange is a core driver of globalisation.

Question 6. How has foreign trade been integrating markets of different countries? Explain with examples.
Answer:
Markets have been integrated through foreign trade, foreign investment, flow of capital, and movement of persons across borders.
Integration of markets has led people in one country to use and appreciate products and culture from other countries; markets now behave like one huge 'world market'.
MNCs play a major role in this rapid integration — for example, in automobiles, an Indian citizen can choose from a large number of international brands made in India, made possible only by market integration.
More regions of the world are now in closer contact than a few decades ago, due to the increased flow of goods and services.
MNCs also play an important role in the Indian economy by setting up production jointly with local companies.
Rapid improvement in information and communication technology has been a major factor stimulating the globalisation process.

Teacher's Note:
a) Trade, investment, capital flow, and labour mobility together integrate world markets.
b) MNCs and improved technology have been key drivers of this rapid integration.

Question 7. What is liberalisation? Describe any four effects of liberalisation on the Indian economy.
Answer:
Liberalisation means opening up the country for foreign investments and capital; trade barriers, often used to protect domestic industries from foreign products, are dismantled under liberalisation.
Free trade benefits consumers through increased choice and reduced prices; free flow of capital lets any country invest in others.
Effects: increase in foreign trade, leading to better foreign exchange reserves.
Increase in foreign investment.
Exchange of technology between countries has improved production in domestic companies, and competition from MNCs makes Indian companies perform better.
Foreign companies (MNCs) can now set up factories and offices in India to boost production for global markets, with many MNCs operating through international organisations like the WTO (World Trade Organisation).

Teacher's Note:
a) Liberalisation dismantled trade barriers, letting foreign capital and MNCs enter India.
b) This raised foreign reserves, investment, technology transfer and domestic competitiveness.