CBSE Class 10 Social Science Globalization Worksheet

Question. Which one of the following organizations laid stress on liberalisation of foreign trade and foreign investment?
(a) International Monetary Fund
(b) International Labour Organisation
(c) World Health Organisation
(d) World Trade Organisation
Answer : D

Question. Which one of the following refers to investment?
(a) The money spent on religious ceremonies
(b) The money spent on social customs
(c) The money spent to buy assets such as land
(d) The money spent on household goods
Answer : C

Question. ………… have been a major force in the globalization process connecting distant regions of the world?
(a) Traders
(b) International companies
(c) Multinational corporations
(d) Businesses houses
Answer : B

Question. Special Economic Zones (SEZs) are being set up to attract
(a) Foreign tourists
(b) Foreign investment
(c) Foreign goods
(d) Foreign policies
Answer : B

Question. Investment means spending on
(a) Factory building
(b) Machines
(c) Equipments
(d) All the above
Answer : D

Question. MNCs set up offices and factories for production in regions where they can get…………………...?
(a) Cheap labour and other resources.
(b) Good market for profits
(c) They can make great sales
(d) More industry
Answer : A

Question. The money that is spent to buy assets such as land, building, machines and other equipment by MNCs is called………?
(a) Investment
(b) Foreign Investment
(c) Domestic investment
(d) International investment
Answer : B

Question. Entry of MNCs in a domestic market may prove harmful for
(a) all large-scale producers
(b) All domestic producers
(c) All substandard domestic producers
(d) All small-scale producers
Answer : D

Question. Which of the following contributes to globalization?
(a) Internal trade
(b) External trade
(c) Large scale trade
(d) Small scale trade
Answer : B

Question. Which of the following industries have been hard hit by foreign competition?
(a) Dairy products
(b) Leather industry
(c) Cloth industry
(d) Vehicle industry
Answer : A

Question. Benefits enjoyed by companies who set up production units in the SEZs are:
(a) They do not have to pay taxes for some years
(b) Reduction in excise duty
(c) Reduced tariffs and barriers
(d) None of the above
Answer : A

Question. Which one of the following is not true regarding the World Trade Organisation?
(a) It allows free trade to all countries without any trade barriers.
(b) Its aim is to liberalize international trade.
(c) It establishes rules regarding international trade.
(d) WTO rules have forced the developing countries to remove trade barriers.
Answer : A

Question. In which other way do the MNCs control production?
(a) By land of local country
(b) Send the latest technology from parent country
(c) Place orders for production with small producers, which then sell these under their own brand name
(d) Send the brand name to the company they buy
Answer : C

Question. MNCs keep in mind certain factors before setting up production”. Identify the incorrect option from the choices given below
(a) Availability of cheap skilled and unskilled labour
(b) Proximity to markets
(c) Presence of a large number of local competitors
(d) Favorable government policies
Answer : C

Question. Which one of the following is a major benefit of joint production between a local company and a Multi-National Company?
(a) MNC can bring latest technology in the production
(b) MNC can control the increase in the price
(c) MNC can buy the local company
(d) MNC can sell the products under their brand name
Answer : A

Fill In The Blank 

True/False

Rewrite the Statement 

Question : Removing barriers or restrictions set by the government is known as Privatisation.
Answer : Removing barriers or restrictions set by the government is known as Liberalisation. 

Question : WTO is one such organization whose aim is to liberalise domestic trade between the countries.
Answer : WTO is one such organisation whose aim is to liberalise international trade. 

Question : The most common route for investments by MNCs in countries around the world is to form partnerships with local companies.
Answer : The most common route for investments by MNCs in countries around the world is to buy up local companies and then to expand production. 

Question : An MNC is a company that owns or controls production in more than two nations.
Answer : An MNC is a company that owns or controls production in more than one nation. 

Question : Special Economic Zones (SEZs) are being set up to attract foreign tourists and foreign policies.
Answer : Special Economic Zones (SEZs) are being set up to attract foreign investment. 

Question : Tax on imports is an example of tax barrier.
Answer : Tax on imports is an example of trade barrier. 

Question : World Trade Organisation allows free trade to all countries without any trade barriers.
Answer : WTO has forced the developing countries to remove trade barriers. 

Question : Entry of MNCs in an international market may prove harmful for all small scale producers.
Answer : Entry of MNCs in a domestic market may prove harmful for all small scale producers. 

Question : Globalisation has led to improvement in living conditions of all males across the world.
Answer : Globalisation has led to improvement in living conditions of all the people across the world. 

Question : Entry of MNCs in a domestic market may prove harmful for all small-scale producers.
Answer : Entry of MNCs in a domestic market may prove harmful for all substandard domestic producers. 

Question : Privatisation of trade and investment has facilitated globalization by removing barriers of trade and investment.
Answer : Liberalisation of trade and investment has facilitated globalization by removing barriers of trade and investment.

Data Based Questions

Question : “Only fair globalisation can give new shape to the world economy”.
Identify the correct statement from the following statements:
(a) Small producers, workers etc. have been benefitted from globalisation.
(b) People with education, skill and wealth have made the best use of new opportunities.
(c) The government cannot play a major part in globalisation.
(d) None of the above
Answer : (b) People with education, skill and wealth have made the best use of new opportunities.

Question : Ford Motors, an American company, came to India in 1995 and spent `1700 crores to set up a large plant near Chennai. By the year 2014, Ford Motors were selling 77000 cars in the Indian markets while around 77000 cars were exported to South Africa.
Identify from the following passage, whether the company is regarded as a MNC or not?
(a) Ford Motors is not a MNC.
(b) Ford Motors is a MNC.
(c) Ford Motors is an International company.
(d) None of the above.
Answer : (b) Ford Motors is a MNC.

Question : ‘There has been rapid development in information and communication technology, e.g., telecommunications, computers, internet etc. They have made easy access to any person or place around the world.’
Identify the concept which is indicated by the above paragraph:
(a) Globalisation
(b) Privatisation
(c) Foreign trade
(b) None of these
Answer : (a) Globalisation

One Word Answer Type Questions 

Question : WTO stands for ?
Answer : World Trade Organisation. 

Question : Which has been the major force in globalisation process in the past thirty years ?
Answer : Multinational Corporations. 

Question : Which countries are location-wise useful for their closeness to the markets in the US and Europe ?
Answer : China, Mexico and Eastern Europe. 

Question : When did the process of liberalisation started in India ?
Answer : 1991. 

Question : Before MNCs, what was the main channel connecting countries ?
Answer : Foreign trade. 

Question : Which country provides the advantage of being a cheap manufacturing location ?
Answer : China. 

Question : Give example of an industry where number of small producers produce goods.
Answer : Garments/Footwear. 

Question : What is the ultimate objective of investing ?
Answer : Profit.

Very Short Answer Type Questions 

Question : What is foreign investment ?
Answer : An investment made by MNCs is called foreign investment. 

Question : What is the most common route for an MNC to start a business in a country ?
Answer : The most common route for MNC investments is to buy up local companies and then to expand production. 

Question : Generally, where do MNCs set up their production?
Answer : MNCs set up production where it is close to the markets; where there is skilled and unskilled labour available at low costs; and where the availability of other factors of production is assured. In addition, MNCs might look for government policies that look after their interests. 

Question : Suppose the Indian government puts a tax on import of a commodity. What would happen?
Answer : To import this commodity, the importer would have to pay higher tax. Because of higher tax, buyers will have to pay a higher price for imported goods. This may lead to reduced demand for the commodity. 

Question : What are the benefits of liberalisation?
Answer : With liberalisation of trade, businesses are allowed to make decisions freely about what they wish to import or export and where they want to produce. 

Question : What does it make India an ideal destination for production?
Answer : India has highly skilled engineers who can understand the technical aspects of production. It also has educated English speaking youth who can provide high quality customer care services. 

Question : What are the reasons for the movement of people from one to another country ?
Answer : People usually move from one country to another in search of better income, better jobs or better education. 

Question : What has been a major force influencing globalisation ?
Answer : Multinational Corporations (MNCs) have been a major force in the globalisation process which connects distant regions of the world. 

Question : What factors have facilitated the process of globalisation ?
Answer : (i) Rapid improvements in technology.
(ii) Liberalisation of trade and investment policies.
(iii) Pressures from international organisations such as the WTO. 

Question : How can import of Chinese toys in India be reduced ?
Answer : The import of Chinese toys in India can be reduced by imposing import duty or tax on them. This way the toys will become costlier and their demand will fall. 

Question : What are the ways in which an MNC can start operating in a country?
Answer : An MNC can start operating in a country either by directly establishing its own factory or by acquiring some running factory or by the way of joint venture with some existing company.

Short Answer Type Questions 

Question : How does foreign trade act as an integrating force ?
Answer : Foreign trade leads to the movement of goods from one market to another in different countries. This flow of goods increases the choice of goods in the markets. Prices of similar goods in the two markets tend to become equal and producers in the two countries start closely competing against each other even though they are separated by thousands of miles. Foreign trade thus, results in connecting the markets or integration of markets in different countries.

Question : How have ‘local companies’ benefited by collaborating with ‘multinational companies’ ? Evaluate any three benefits.
Answer : The local companies have been benefited by collaborating with ''Multinational Companies'' in the following ways :
(i) MNCs provide money for additional investments like buying new machines for faster production.
(ii) MNCs bring with them the latest technology for production.
(iii) The collaboration with MNCs also bring new market for the finished goods/product.
(iv) With the increase in production, Indian companies made good earnings.

Question : How do multi-national companies manage to keep the cost of production of their goods low? Explain with examples.
Answer : MNCs are able to keep their cost low due to the following factors:
(i) MNCs establish their production facilities in such areas where they get cheap raw material and cheap and skilled labour.
(ii) MNCs always establish their production facility near the market which helps them to keep their transportation cost low.
(iii) MNCs may hire best human talent which makes very effective planning which results into higher productivity.
(iv) MNCs spend a large amount in research and development which helps them to always produce latest products and services with minimum of resources and efforts.

Question : How do local producers get benefited from MNCs ?
Answer : Many of the times, MNCs set up production facility in any country jointly with some of the local companies of that country. The benefit to the local company of such joint production is two-fold.
First, MNCs can provide money for additional investments, like buying new machines for faster production. Second, MNCs might bring with them the latest technology for production.

Question : Describe the impact of globalisation on Indian economy with examples.
Answer : Results of Globalisation :
(i) Better employment opportunities : Due to the growing economic activities many new centres of economic activity has developed in India. These are Gurgaon, Chandigarh, Bangalore, Hyderabad and Meerut. Earlier Mumbai, Chennai, Kolkata and Delhi used to be major economic centres.
(ii) Change in lifestyle : Eating habits have changed dramatically.
(iii) Unfair means adopted by developed countries : Developed countries still give huge subsidies to their farmers and impose heavy trade barriers. In the bargain, developing nations don't get the desired benefit out of WTO negotiations.
(iv) The development of Indian companies as multinational-Several top India companies like Infosys, Ranbaxy Tata Motors, has been able to get benefit from the increased competition created as a result of globalisation.

Question : How has liberalisation of trade and investment policies helped the globalisation process?
Answer : Liberalisation is the process of removing barriers or restrictions to trade and investment set by the government. After the Second World War, almost all the countries of the world adopted protectionist policies regarding foreign trade. But their negotiations for liberal trade continued. With the formation of WTO, most of the countries liberalised their policies regarding foreign trade and foreign investments. Increased foreign trade and investment facilitated the movement of goods and production facilities to other countries and this process led to the globalisation or the interconnecting or integration of economies of the world.

Question : Why had the Indian government put barriers to foreign trade and foreign investments after independence? Analyse the reasons.
Answer : (i) The Indian government, after independence, had put up barriers to foreign trade and foreign investment. This was considered necessary to protect the producers within the country from foreign countries.
(ii) Industries were just coming up in the 1950s and 1960s and competition from imports at that stage would not have allowed these industries to come up.
(iii) Thus, India allowed imports of only essential items such as machinery, fertilisers, petroleum, etc.

Question : Do the rules of WTO give fair treatment to all the countries?
Answer : No. Though WTO is supposed to facilitate free trade for all, in practice, it is seen that the developed countries have retained or developed unfair trade barriers against developing countries. An example of this is the current debate on trade in agricultural products and establishing labour standards. On the other hand, WTO rules have forced the developing countries to remove trade barriers.

Question : What are the implications of “flexibility” in employment of workers ?
Answer : The ''flexibility" concept in employment leads to the irregular employment of workers. Now, the companies may employ workers only on a temporary basis so that they do not have to pay workers for the whole year. The workers, now, will have to put in very long working hours and in night shifts on a regular basis during the peak season. Wages are low and workers are forced to work overtime to make both ends meet.

Question : How does foreign trade lead to integration of markets across countries? Explain with an example other than those given here.
Answer : Foreign trade creates an opportunity for the producers to reach beyond the domestic markets. The producers can sell their products not only in markets located within the country, but they can also compete in markets located in other countries of the world. When the goods travel from one market to another, prices of similar goods in the two markets tend to become equal. Similarly, for the buyers, import of goods produced in another country expands their choice of goods beyond what is domestically produced. So, the choice of goods in the markets increases. This has also raised their standard of consumption at par with their counterparts in other countries. For example, when IPhone 12 was launched in USA, it was also launched in India at the same time and buyers in India also started placing their orders for the same. Foreign trade thus results in connecting the markets or integration of markets in different countries.

Question : What is a MNC?
Answer : A MNC is a company that owns or controls production in more than one nation. MNCs set up their 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 becomes low and the MNCs can earn greater profits.

Question : What are the characteristics of a MNC?
Answer : Following are the characteristics of a MNC:
(i) A MNC may have research and development facility in country 'A'.
(ii) It may have production facility in country 'B'.
(iii) It may source raw materials from other countries.
(iv) It then sells its products across the world.

Question : ‘‘Foreign trade integrates the markets in different countries.’’ Support the statement with arguments.
Answer : Foreign trade provides opportunities for both producers and buyers to reach beyond the domestic market of their own country. Goods travel from one country to another. For the buyers, import of goods produced in another country provides opportunity to extend their choice of goods beyond what is domestically produced. Competition among producers of various countries prevails as they can sell their produce not only in domestic market, but they can also compete in market of other countries. Thus, foreign trade has been the main channel connecting countries, e.g., the silk route connects India and South Asia to markets both in the East and West.

Question : Explain any three steps taken by the Indian government to attract foreign investment.
Answer : The Indian government has taken following steps to attract foreign companies to invest in India:
(i) The government has developed industrial zones, called Special Economic Zones (SEZs). SEZs are confined zones that have world class facilities like electricity, water, roads, transport, storage, recreational and educational facilities. Companies who set up production units in the SEZs do not have to pay taxes for an initial period of five years.
(ii) 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.
(iii) FDI varying from 26 per cent to 100 per cent was allowed in specified sectors.

Question : Which small businesses have been hit hard by the competition due to the globalisation in India?
Answer : Batteries, electronics, cold drinks, 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.

Question : What is globalisation? Describe the role of Multinational Corporations (MNCs) in promoting globalisation process.
Answer : Globalisation is the opening of local and nationalistic perspectives to a broader outlook of an interconnected and inter-dependent world with free transfer of capital, goods, and services across national frontiers. MNCs play an important role in the process of globalisation. They bring not only their products to a country, but also new business policies and cultures. They also help in increasing competitiveness among the Indian companies. At present, most of us have access to the latest models of cars and this could be possible only due to globalisation. Because of a large number of MNCs in our country, most of the urban Indians have become broad-minded in their outlook.

Question : What were the reasons for putting barriers to foreign trade and foreign investment by the Indian government? Why did it wish to remove these barriers?
Answer : At the time of independence, India received its industrial structure in very shattered and backward form. So, in order to give it an environment for growth, the Indian government put barriers to foreign trade and foreign investment to protect the producers within the country from foreign competition. Industries were just coming up in the 1950s and 1960s, and competition from imports at that stage would not have allowed these industries to grow up. But around 1991, the Indian government had realised that in order to improve the functioning of the Indian economy, the time had come for Indian producers to compete with producers around the globe. It felt that competition would improve the performance of producers within the country since they would have to improve their quality.

Question : What are multinational corporations (MNC s) and describe its peculiar nature with an example. 
OR
Explain how production takes place across the countries with an example.
Answer : 1. A MNC is a company that owns or controls production in more than one nation. MNC s set up offices and factories for production in regions where they can get cheap labour and other resources.
2. This is done so that the cost of production is low and the MNC s can earn greater profits. the The MNC is not only selling Consider its finished products globally, but more important, the goods and services are produced globally. As a result, production is organised in increasingly complex ways.
3. following example.
4. The production process is divided into small parts and spread out across the globe.
For example, large MNC producing industrial equipment designs its products in research centres in the USA and then has the components manufactured in China. These are then shipped to Mexico and Eastern Europe where the products are assembled and the finished products are sold all over the world .Meanwhile ,the company’s customer care is carried out through call centres located in India.In the above 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. And India provide customer care service as she has educated English speaking youth.

Question : What are the conditions in which MNC set up production? 
Answer : 1. MNC s set up production where it is close to the markets; where there is skilled and unskilled labour available at low costs; and where the availability of other factors of production is assured.
2. MNC s might look for government policies that look after their interests.  

Question : Define investment and foreign investment?
Answer : 1. The money that is spent to buy assets such as land, building, machines and other equipment is called investment.
2. Investment made by MNCs is called foreign investment. Any investment is made with the hope that these assets will earn profits. 

Question : Suggest the ways in which MNC s control production. 
Answer : 1. MNCs set up production jointly with some of the local companies of these countries. The benefits to the local company of such joint production are First, MNCs can provide money for additional investments, like buying new machines for faster production. Second, MNCs might bring with them the latest technology for production.
2. Large MNCs in developed countries place orders for production with small producers. Garments, footwear, sports items are examples of industries where production is carried out by a large number of small producers around the world. The products are supplied to the MNC s, which then sell these under their own brand names to the customers. These large MNCs have tremendous power to determine price, quality, delivery, and labour conditions for these distant producers.
3. The most common route for MNC investment is to buy up local companies and then to expand production. MNCs with huge wealth can quite easily do so 

Question : How does foreign trade lead to integration of markets across countries? Explain with an example.
Answer : 1. The foreign trade creates an opportunity for the producers to reach beyond the domestic markets.
2. Producers can sell their produce not only in markets located within the country but can also compete in markets located in other countries of the world.

Long Answer Type Questions 

Question : What kind of challenges globalisation has presented before the small producers and workers of India? 
Answer : Globalisation has presented before the small producers of India the situation of either to compete or to perish. For a large number of small producers and workers, globalisation has posed major challenges. Batteries, electronics, cold drinks, capacitors, plastic 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 which has left many workers jobless. Globalisation and competition has also generated the situation of uncertain employment which has 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. So, the number of underemployed workers is increasing day by day.

Question : In what ways do MNCs control production of local companies ?
Answer : (i) Large MNCs in developed countries place orders for production with small producers.
(ii) Garments, footwear, sports items are the examples of industries where production is carried out by a large number of small producers around the world.
(iii) The products are supplied to the MNCs, which then sell these products under their own brand names to the customers.
(iv) These larger MNCs have tremendous power to determine price, quality, delivery and labour conditions for these distant producers.

Question : Why do you think the Indian market has been transformed?
Answer : We can notice rapid advancement in technology in almost all the spheres of our life. Earlier, we used yellow bulbs in our homes. Now our homes are illuminated by LED bulbs. Similarly, in other areas like in communication, we have moved from yellow postcards to Whatsapp; in education we have moved from blackboard to smart classes etc. Mobiles have transformed businesses and gave birth to ecommerce and e-payment anytime and anywhere. If we closely observe, now we are using such products which were non-existent a few years ago. So, we can say that Indian markets have been completely transformed.

Question : What policy decisions were taken by the Indian government in 1991?
Answer : Starting around 1991, the Indian government began to realise that in order to improve the functioning of the Indian economy, the time had come for Indian producers to compete with producers around the globe. It felt that competition would improve the performance of producers within the country since they would have to improve their quality. This decision was supported by powerful international organisations like IMF and WTO. Thus, barriers on foreign trade and foreign investment were removed to a large extent. This means that goods could be imported and exported easily and also foreign companies could set up their factories and offices here.

Question : Explain any five positive impacts of globalisation.
Answer : Globalisation and greater competition among producers - both local and foreign, has been of advantage to consumers in the following ways:
(i) Companies have invested in new technology to increase their products quality to compete with the MNCs, thus, ensuring that consumers get better quality products and be satisfied.
(ii) Indian companies have collaborated with MNCs to produce more functional and advanced products, thus benefitting the consumers.
(iii) Consumer can enjoy improved quality at lower prices for several products. This has led to higher standard of living.
(iv) There is greater choice available to the consumers in goods.
(v) The quality of goods has improved.
(vi) Due to competition, the prices of various products has come down.

Question : “Only fair globalisation can give new shape to the world economy. Explain.
OR ‘‘
Fair globalisation would create opportunities for all and also ensure that benefits of globalisation are shared better.’’ Support the statement. OR How can globalisation be made more fair?
Answer : (i) Fair globalisation would create opportunities for all, and also ensure that the benefits of globalisation are shared better.
(ii) The government can play a major role in making this possible.
(iii) Government can ensure that labour laws are properly implemented and the workers get their rights, their provisions till the time they become strong.
(iv) It can support small producers to improve enough to compete.
(v) It can negotiate at the WTO for fair rules.
(vi) It can also align with other developing countries with similar interests to fight against the domination of developed countries in the WTO.
(vii) If necessary, the government can use trade and investment barriers.

Question : “The multinational companies (MNCs) choose China as an alternative location for investment ?” Explain the statement.
Answer : "The multinational companies (MNCs) choose China as an alternative location for investment" because :
(i) After the revolution of 1949, China gradually came in the field of world economy. It attracted the foreign MNCs.
(ii) China is the most populous country, besides labour they formed a large consumer base.
(iii) Wages in China were relatively low so it was a great attraction for MNCs.

Question : What were the reasons that restricted the foreign trade in India after independence ?
Answer : Following are some of the reasons that lead to the restrictions of foreign trade in India after independence :
(i) India got independence from Britishers after a very long battle of approx. 200 years. This led to a natural sense of hatred towards foreign products. So, the policy makers tried to discourage foreign trade.
(ii) At the time of independence, the industrial structure of India was very weak. Hence, it required protection from foreign competition. Otherwise they would have suffered or failed to emerge.
(iii) At the time of independence, India's foreign reserves were very less, so these reserves were to be used in the most important imports like machinery and technology. So, Indian government discouraged foreign trade.

Question : Why are MNCs able to gain greater profits ?
Answer : MNCs are able to gain big profits due to the following factors :
(i) MNCs enter into a country with modern technology which gives them better competitive advantage over their competitors in terms of quality and cost.
(ii) MNCs provide the people with world class products. So consumers prefer them over their local counterparts.
(iii) MNCs establish their production facilities in such areas where they get cheap raw material and labour.
(iv) MNCs are normally wealthy companies. They spend large amounts on promotion. So more and more people come to know about them and use their products.
(v) Because of their economic clout, the MNCs are able to influence a country's economic policies in their favour
(vi) MNCs hire best human talent which makes very effective planning for them to win over their competitors.
(vii) MNCs spend a large amount in research and development which help them to always produce latest products and services. This helps them to retain their existing customery and acquire new customers.

Question : Suppose you find two people arguing: One is saying globalisation has hurt our country’s development. The other is telling, globalisation is helping India develop. How would you respond to these arguments?
Answer : Globalisation is a mixed bag. It is not an absolute boon or absolute curse. It has merits and demerits both which are following:
Merits:
(i) There is increase in the foreign investment.
(ii) Globalisation has brought with itself latest technologies.
(iii) It has resulted into the production of latest and efficient goods and services.
(iv) It has resulted into competition which has led to the adoption of efficient methods of production.
(v) It has given origin to various new services like BPO and call centers in India.
Demerits:
(i) Globalisation has resulted into intense competition which has led to the closing down of many small industrial units.
(ii) The closing of many units due to competition has resulted into large unemployment.
(iii) Income inequalities in the society has become widespread.
(iv) Due to globalisation the unorganised sector has expanded rapidly. So, we can see that globalisation has both positive and negative aspects. The positive aspects are more than the negative aspects and whatever negative aspects it has, can be managed by the right policies of the governments. So, globalisation is left with merits only.

Question : In the last twenty years, globalisation of the Indian economy has come a long way. What has been its effect on the lives of people ?
Answer : Globalisation and the resulting competition from it have affected different sections of economy in different manners. Following are the impacts of globalisation on the different sections of the economy :
(i) Consumers, particularly the well-off sections in the urban areas have benefitted a lot due to globalisation. Now, there is a greater choice before these consumers who now enjoy improved quality and lower prices for several products. As a result, these people at present, enjoy much higher standards of living than was possible earlier.
(ii) Due to competition, the producers improved the technology and quality of their products. They have invested in newer technology and production methods and raised their production standards. Some have gained from successful collaborations with foreign companies.
(iii) Globalisation has resulted into the advent of multinational corporations (MNCs). MNCs have increased their investments in India over the past 20 years. Due to the increased investment by MNCs, new jobs have been created.
(iv) Globalisation has also created new opportunities for companies providing services, particularly those dealing in IT. BPOs and call centres are some examples. Besides, a host of services such as data entry, accounting, administrative tasks, engineering are now being done cheaply in countries such as India and are exported to the developed countries.

Question : Why do developed countries want developing countries to liberalise their trade and investment? What do you think should the developing countries demand in return?
Answer : Developed countries want developing countries to liberalise their trade and investment policies because developed countries view developing countries as an ideal source and destination for their purpose. Countries want their companies to set up their production facilities in developing countries due to the availability of cheap raw material and cheap labour. In the same way, countries want to sell their products in developing countries because in most of the developing countries, the level of income is rising. So, developed countries search for possibility of higher profit and demand in the developing countries. The developing countries must ask for better reach of their products in the developed countries so that the indigenous industries may also prosper. They may also ask the developed countries for investment in the development of public goods so that the productive capacity of developing countries may also increase.

Source/Case Based Questions 

Question : Read the sources given below and answer the questions that follow: 

Source A : Production across countries
Until the middle of the twentieth century, production was largely organised within countries. What crossed the boundaries of these countries were raw material, food stuff and finished products. Colonies such as India exported raw materials and food stuff and imported finished goods. Trade was the main channel connecting distant countries. This was before large companies called Multinational Corporations (MNCs) emerged on the scene. 

Source B : Foreign trade and integration of markets
Foreign trade creates an opportunity for the producers to reach beyond the domestic markets, i.e., markets of their own countries, Producers can sell their produce not only in markets located within the country but can also compete in markets located in other countries of the world. Similarly, for the buyers, import of goods produced in another country is one way of expanding the choice of goods beyond what is domestically produced. 

Source C : Impact of globalisation in India
Globalisation and greater competition among producers–both local and foreign producers–has been of advantage to consumers, particularly the well-off sections in the urban areas. 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. 

(i) How are MNCs a major force in connecting the countries of the world?
Answer : MNCs play an important role in the process of globalisation. They bring not only their products to a country, but also the new business policies and cultures. They also help in increasing competitiveness among the Indian companies. At present, most of us have access to latest models of cars and this could be possible only because of globalisation. Because of a large number of MNCs in our country, most of the urban Indians have become broad-minded in their outlook.

(ii) How does foreign trade become a main channel in connecting countries?
Answer : Foreign trade becomes a main channel in connecting countries because trade in the past was restricted to finished goods being produced in one market, and sold in other markets. In today's time, besides trade- flow of capital, technology, people, and Services is also taking place all over the world. Today, the world is connected in a way that even production of the same good takes place across different countries.

(iii) How is globalisation beneficial for consumers?
Answer : The benefits of the globalisation for the consumers are given below:
(i) It creates opportunities in terms of investment, employment for many developing and underdeveloped countries and brings about greater integration of economies.
(ii) It enhances choices to the consumers, and brings about increased movement of goods, people, and ideas.
(iii) It has led to the establishment of many foreign brands in the country, thes widening our choices and creating preferences.

Question : Read the sources given below and answer the questions that follows:*

Source A- Production across countries
Colonies such as India exported raw materials and food stuff and imported finished goods. Trade was the main channel connecting distant countries. This was before large companies called multinational corporations (MNCs) emerged on the scene. A 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 labour and other resources.

Source B- Interlinking production across countries
MNCs set up factories and offices for production. 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. Any investment is made with the hope that these assets will earn profits.

Source C- Information and communication technology
Even more remarkable have been the developments in information and communication technology. In recent times, technology in the areas of telecommunications, computers, Internet has been changing rapidly. Telecommunication facilities (telegraph, telephone including mobile phones, fax are used to contact one another around the world, to access information instantly, and to communicate from remote areas. This has been facilitated by satellite communication devices. Source A- Production across countries.

(i) Why some companies are called multinational corporations (MNCs)?
Answer : Some companies are called multinational corporations (MNCs) because these companies own or control production in more than one nation.

(ii) What do you understand by foreign investment?
Answer : Investment made by MNCs is called foreign investment.

(iii) What type of technology are used to contact one another around the world?
Answer : Telecommunication facilities (telegraph, telephone including mobile phones, fax) are used to contact one another around the world.

Question : Read the extract and answer the questions that follow: 

Tax on imports is an example of trade barrier. It is called a barrier because some restriction has been set up. Governments can use trade barriers to increase or decrease (regulate) foreign trade and to decide what kinds of goods and how much of each, should come into the country. 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. Industries were just coming up in the 1950s and 1960s, and competition from imports at that stage would not have allowed these industries to come up. Thus, India allowed imports of only essential items such as machinery, fertilisers, petroleum etc. Note that all developed countries, during the early stages of development, have given protection to domestic producers through a variety of means. Starting around 1991, some far reaching changes in policy were made in India. The government decided that the time had come for Indian producers to compete with producers around the globe. It felt that competition would improve the performance of producers within the country since they would have to improve their Quality. This decision was supported by powerful international organisations. Thus, barriers on foreign trade and foreign investment were removed to a large extent. This meant that goods could be imported and exported easily and also foreign companies could set up factories and offices here. Removing barriers or restrictions set by the government is what is known as liberalisation.

(i) What is trade barrier? Give one example.
Answer : When the government puts some restriction on the foreign trade and foreign investment, it is called trade barrier. Oneexample of trade barrier is tax. 

(ii) What do you mean by the term liberalisation?
Answer : Removing barriers or restrictions set by the government is known as liberalisation. 

(iii) How does government regulate foreign trade?
Answer : Governments can use trade barriers:
(i) To increase or decrease (regulate) foreign trade.
(ii) To decide what kinds of goods and how much of each should come into the country.

Creating Based Questions 

Question : Arrange the following statements in a logical order.
(a) Indian government imposed trade barriers postindependence.
(b) India allowed imports of only essential commodities such as oil, fertilizer and machinery.
(c) Protecting domestic producers from foreign competition was considered necessary to allow domestic industry to prosper.
(d) In 1950s and 1960s, domestic industry was in nascent stage, and competition from developed foreign industry would not have allowed domestic industry to develop.
Answer : (a) In 1950s and 1960s, domestic industry was in nascent stage, and competition from developed foreign industry would not have allowed domestic industry to develop.
(b) Protecting domestic producers from foreign competition was considered necessary to allow domestic industry to prosper.
(c) Indian government imposed trade barriers postindependence.
(d) India allowed imports of only essential commodities such as oil, fertiliser and machinery. 

Question : Arrange the following statements in a logical order.
(a) Foreign trade helped Norlock integrate its market with world market.
(b) The consumers in Norlock, now, have a wide variety of goods to choose from.
(c) The opening up of economy caused the producers in Norlock to compete with local as well as international producers.
(d) Norlock opened its economy to the world and allowed foreign traders to sell their goods.
Answer : (a) Norlock opened its economy to the world and allowed foreign traders to sell their goods.
(b) The opening up of economy caused the producers in Norlock to compete with local as well as international producers.
(c) The consumers in Norlock, now, have a wide variety of goods to choose from.
(d) Foreign trade helped Norlock integrate its market with world market. 

Question : Arrange the following statements in a logical order.
(a) Faberbread succeeded in maintaining low cost of production as it entered developed nations.
(b) After establishing the brand value in some of the developed nations, Faberbread gradually purchased certain local companies and acquired their existing infrastructure. As production increased, cost of production went down.
(c) Fabrebread, an MNC in food processing business, established joint business processes with local food processing companies.
Answer : (a) Fabrebread, an MNC in food processing business, established joint business processes with local food processing companies.
(b) After establishing the brand value in some of the developed nations, Faberbread gradually purchased certain local companies and acquired their existing infrastructure. As production increased, cost of production went down.
(c) Faberbread succeeded in maintaining low cost of production as it entered developed nations. 

Question : Agroplas, an agro-processing firm in a developing country, requires its government to impose tariffs on imported processed agricultural goods. What arguments would you suggest Agroplas to establish their case?
Answer : Agroplas can point out the following issues to the government.
(i) Invasion by foreign companies in local market is hampering the growth of local companies. The sale of domestic companies has gone down.
(ii) Developed countries are capital-intensive and have lower cost of production. When the local consumers demand imported goods, the local producers have to reduce their production which ultimately lowers the employment level in the country. 

Question : If someone tells you that everyone has not benefitted from globalisation, what would you infer from this statement?
Answer : If someone says that not everyone has benefitted from globalisation, they could be likely pointing out people from the labour class or people with lower skill and education level. Globalisation and increased competition have changed the life of workers as firms now want to hire workers either temporarily or on contractual basis only when there is work pressure. This has left workers with low job security. 

Question : Fill in the blanks with suitable words to complete the story of Indian liberalisation process.
Exported, compete, international organisations, 1991, production process, quality, barriers, competition, foreign investment, imported, foreign trade
In _____, some far reaching changes in policy were made in India. The government decided that the Indian producers must ______ with producers around the globe. The government believed that _____ would improve the _____ within the country since the producers would have to improve the _____ of produce. This decision was supported by powerful ______. Thus, ______on ______ and _______ were removed to a large extent. This meant that goods could be ______ and _______ freely and foreign companies could set up offices in India.
Answer : In 1991, some far reaching changes in policy were made in India. The government decided that the Indian producers must compete with producers around the globe. The government believed that competition would improve the production process within the country since the producers would have to improve the quality of produce. This decision was supported by powerful international organisations. Thus, barriers on foreign trade and foreign investment were removed to a large extent. This meant that goods could be imported and exported freely and foreign companies could set up offices in India.

Question. What is Globalisation?
Answer: Globalisation is the process of rapid integration or interconnection between countries.
(Globalisation means integrating our economy with world economy. In this process, we become economically interdependent at the global or international level.)
1. It is the result of greater foreign investment and greater foreign trade has been greater integration of production and markets across countries.
2. More and more goods and services, investments and technology are moving between countries.
3. Most regions of the world are in closer contact with each other than a few decades back.

Question. Discuss the factors that have enabled globalization.
Answer: (1) Technology
a) Rapid improvement in technology has been one major factor that has stimulated the globalisation process. For instance, the past fifty years have seen several improvements in transportation technology. This has made much faster delivery of goods across long distances at lower costs. Eg: Container Services
b) Growth of Information Technology
1. Even more remarkable have been the developments in information and communication technology. In recent times, technology in the areas of telecommunications, computers, Internet has been changing rapidly.
2. Telecommunication facilities (telegraph, telephone including mobile phones, fax) are used to contact one another around the world, to access information instantly, and to communicate from remote areas. This has been facilitated by satellite communication devices.
3. The amazing world of internet can obtain and share information on almost anything we want to know. Internet also allows us to send instant electronic mail (e-mail) and talk (voice-mail).
(2) Liberalization of foreign trade and foreign investment policy
1. Removing barriers or restrictions set by the government is what is known as liberalisation.
2. With liberalisation of trade, businesses are allowed to make decisions freely about what they wish to import or export.
3. The government imposes much less restrictions than before and is therefore said to be more liberal.

Question. Why Indian government put various barriers in foreign trade and investments before1991?
OR
Why did the Indian government put barriers to foreign trade and foreign investment after independence?
Answer: 1. Tax on imports is an example of trade barrier. It is called a barrier because some restriction has been set up. Governments can use trade barriers to increase or decrease (regulate) foreign trade and to decide what kinds of goods and how much of each, should come into the country.
2. The Indian government, after Independence, had put barriers to foreign trade and foreign investment. This was considered necessary to protect the producers within from foreign competition.
3. Industries were just coming up in the 1950s and 1960s, and competition from imports at that stage would not have allowed these industries to come of only essential items such as machinery,
fertilizers, petroleum etc.

Question. Assess the far reaching changes brought about by the Government of India after 1991 in its foreign trade and investment policies.
Answer:
1. Starting around 1991, some far reaching changes in policy were made in India. The government decided that the time had come for Indian producers to compete with producers around the globe.
2. It felt that competition would improve the performance of producers within the country since they would have to improve their quality.This decision was supported by powerful international organisations.
3. Thus, barriers on foreign trade and foreign investment were removed to a large extent. This meant that goods could be imported and exported easily and also foreign companies could set up factories and offices here.

Question. Describe the status of WTO. OR Write a short note on WTO.
Answer:
1. World Trade Organisation (WTO) is one such organisation whose aim is to liberalise international trade. Started at the initiative of the developed countries, WTO establishes rules regarding international trade, and sees that these rules are obeyed.
2. 149 countries of the world are currently members of the WTO (2006).
3. Though WTO is supposed to allow free trade for all, in practice, it is seen that the developed countries have unfairly retained trade barriers. On the other hand, WTO rules have forced the developing countries to remove trade barriers.

Question. Discuss the impact of Globalisation in India.
Answer:
1. Globalisation and greater competition among producers (both local and foreign producers) has been of advantage to consumers, particularly the well-off sections in the urban areas. Due to greater choice and improved quality and lower prices for several products improved the standards of living than earlier.
2. Among producers and workers, the impact of globalisation has not been uniform ,as illustrated with following examples
♦ MNCs have increased their investments in India over the past 15 years, as they understood that investing in India has been beneficial for them and also they are interested in industries such as cell phones, automobiles, electronics, soft drinks, fast food or services such as banking in urban areas because they have a large number of well-off buyers, new jobs have been created. And also provided raw materials supplied by the local companies to these MNCs have prospered.
♦ Several of the top Indian companies have been benefited from the increased competition by investing in newer technology, production methods and raising their production standards. Some have gained from successful collaborations with foreign companies.
3. Globalisation has enabled some large Indian companies to emerge as multinationals themselves like Tata Motors (automobiles), Infosys (IT), Ranbaxy (medicines), which are spreading worldwide
4. Globalisation has also created new opportunities for companies providing services, particularly those involving IT. The Indian company producing a magazine for the London based company and call centers are some examples.
5. Besides, a 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. Discuss the special steps taken by government of India to attract foreign companies to invest in India. 
Answer: 1. Industrial zones, called Special Economic Zones (SEZs), are being set up. SEZs are to have world class facilities: electricity, water, roads, and transport, and storage, recreational and educational facilities.
2. Companies who set up production units in the SEZs do not have to pay taxes for an initial period of five years.
3.Government has also allowed flexibility in the labour laws to attract foreign investment. the companies in the organised sector have to obey certain rules that aim to protect the workers’ rights.
4.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 labour for the company. Foreign companies are demanding more flexibility in labour laws.

Question. Analyse the major challenges posed by globalization. OR Evaluate the negative impact of globalization on Indian economy.
Answer:
1. Rising Competition
2. Uncertain Employment
3. The condition of work and hardships of workers have become common to many industrial and service units in India. Even many organized sector have started to follow unorganized features.
4. Several small scale industries have shut down due to completion which led to many workers jobless.

Question. Examine in what ways we can attain a fair globalization.
Answer:
1. The government can play a major in fair globalisation that would create opportunities for all and ensure that benefits of globalisation are shared equally in a better manner.
2. Its policies must protect the interest of both rich and powerful and all the people in the country
3. Steps should be taken by the government to ensure that labour laws are properly implemented and workers get their rights
4. 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. 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.
6. In the past few years, massive campaigns and representation by people’s organizations have influenced important decisions relating to trade and investments at the WTO. This has demonstrated that people also can play an important role in the struggle for fair globalization.