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

Objective Type Questions

Question. Which of the following option best describe the ‘Globalisation’ ?
(a) The process of removing international borders by countries.
(b) The process of rapid integration or interconnection between countries.
(c) The process of abolishing own government and letting United Nation govern.
(d) The process of abolishing own currency and adopting dollar as only recognised currency.
Answer: (b)

Question. Which of the following cannot be used as collateral?
(a) Land titles
(b) Deposits with banks
(c) Godown taken on rent
(d) Livestock
Answer: (c)

Question. Which of the following is a reason for the government to impose barriers on trade?
(a) To regulate the type and amount of goods that can enter the country
(b) To increase competition in domestic market
(c) To remove monopoly markets from the country
(d) To improve the performance of domestic producers
Answer: (a)

Question. Which of the following is an example of globalization?
(a) Indians consuming good produced abroad.
(b) Indians becoming self-sufficient in terms of production of goods and services.
(c) Indians moving across different states in domestic territory.
(d) Indians producing huge amount of agricultural produce.
Answer: (a)

Question. Which of the following is a benefit of globalization?
(a) Consumers pay higher amount for goods and services, so producers are better off.
(b) Asymmetric information cannot exist in a globalized market.
(c) Consumers get a wide variety of goods to choose from.
(d) Homogeneous goods are sold in a globalized market.
Answer: (c)

Question. Which of the following best describes an MNC?
(a) An MNC is a company that controls production of good and services in multiple nations.
(b) An MNC is a government organized body that controls the distribution of resources in a country.
(c) An MNC is an organization that ensures new technology is used by the farming sector of a country.
(d) An MNC is a conglomerate of domestic companies that control production of goods and services in the domestic region.
Answer: (a)

Question. Which of the following is an advantage of globalization to multinational companies?
(a) Multinational companies do not have to procure raw materials from other countries as globalization leads to self-sufficiency of companies.
(b) Spreading out production across international borders can help in lowering the cost of production.
(c) When multinational companies expand production across the world, they do not have to pay taxes as they help in generating employment.
(d) Multinational companies can easily put the burden of increased cost of production on global consumers and continue to earn high profits.
Answer: (b)

Question. Rajiv has a textile firm. For carrying out production, Rajiv spent money on procuring thread from traders, buying machine and equipment and built a warehouse to store the cloth produced. The expenditure incurred by Rajiv for conducting the production process is termed as _____.
(a) investment
(b) profits
(c) equity
(d) interest
Answer: (a)

Question. Which of the following can be a benefit to local businesses if they conduct business with MNCs?
(a) Local businesses do not have to invest in the business as MNCs do all the investment.
(b) MNCs provide cheap labour to local businesses.
(c) MNCs can bring advanced techniques of production.
(d) Local businesses earn higher profits as their cost of production becomes nil.
Answer: (c)

Question. In what way did the pressure of competition affect the workers in the garment industry?
(a) Reduced cost of raw materials
(b) Reduced the labour cost
(c) Decreased the working hours
(d) Protection to workers
Answer: (b)

Question. The investment made by MNCs is called ______.
(a) foreign investment
(b) foreign trade
(c) foreign demand
(d) foreign supply
Answer: (a)

Question. Which of the following is the following is an example of a trade barrier?
(a) Remittances to foreigners
(b) Cost of transportation
(c) Tax on imports
(d) Interest on bonds
Answer: (c)

Question. Which of the following is a reason for the government to impose barriers on trade?
(a) To regulate the type and amount of goods that can enter the country.
(b) To increase competition in domestic market.
(c) To remove monopoly markets from the country.
(d) To improve the performance of domestic producers.
Answer: (a)

Question. Joint production helps in bringing the latest technology by MNC's, thus improving the value of the product. (True/False)
Answer: True

Question. A consumer gets greater choices of goods because of entry of MNC's, increase in foreign trade and free trade regulated by international organisation. (True/False)
Answer: True

Question. The impacts of globalisation is that although it has created a lot of jobs but labour laws are not implemented properly, workers are denied their rights and its benefits have not been shared equally. (True/False)
Answer: True

Question. Rapid development in technology and its usage and removal of trade barriers has helped to achieve rapid globalisation. (True/False)
Answer: True

Question. Globalisation helps in exchange of goods and services around the world. (True/False)
Answer: True

Question. Match the following :
Column A
1. MNCs buy at cheap rates from the small producers
2. Quotas and taxes are imposed on imports to regulate trade
3. Indian companies who have invested abroad
4. Spread of customer care services in other countries
5. MNCs have invested in setting up factories in India for production

Column B
(A) Trade barriers
(B) Garments and footwear
(C) Cell centres
(D) Automobiles
(E) Tata motors and Infosys
Answer: 1. (B), 2. (A), 3. (E), 4. (C), 5. (D)

Question. World Trade Organisation (WTO) is an organisation whose aims is ______.
Answer: to liberalise international trade.

Question. MNC is the company that owns or control _______.
Answer: Production in more than one nation.

Question. Removing trade barriers and tax restriction set up by the government is called as _________ .
Answer: liberalisation.

Question. Arrange the following according to their establishment year :
(i) Sony (ii) Ranbaxy (iii) Nokia (iv) IBM
(A) i-iv-ii-iii
(B) ii-iv-i-iii
(C) iv-ii-i-iii
(D) i-ii-iii-iv
Answer: (D)

Question. Complete the following table :
World Trade Organisation
Aim: (A)– ?
It allows: Free Trade
Countries at present are members of WTO: (B) – ?
Answer: (A)– To liberalise international trade, (B)– 164 Countries.

Question. Correct the following statement and rewrite it. Removing barriers or restrictions by the government is known as globalisation.
Answer: Removing barriers or restrictions by the government is known as liberalisation.

Question. Correct the following statement and rewrite it. International Monetary Fund (IMF) is an organisation whose aim is to liberalise international trade.
Answer: World Trade Organisation (WTO) is an organisation whose aim is to liberalise international trade.

Very Short Answer Type Questions

Question. What is the most visible phenomenon in the present global economic environment ?
Answer: Nations are getting interconnected with each other more rapidly through foreign trade and foreign investment.

Question. How can we identify that we are living in a globalised world ?
Answer: The latest models of digital cameras, mobile phones and televisions made by the leading manufacturers of the world are within our reach. This is an indicator of a globalised world.

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

Question. Why are the MNCs spreading their production to other countries ?
Answer: Expanded markets, lower cost, proximity to other markets are some of the reasons for MNCs spreading their production to other countries.

Question. Which areas are suitable for MNCs to invest ?
Answer: Regions which provide cheap raw material, cheap quality labour, good infrastructure, proximity to markets and better governance policies are suitable areas for MNCs to invest.

Question. Which are the sectors in which MNCs have shown interest to invest in ?
Answer: MNCs have been interested in industries such as mobile phones, automobiles, electronics, soft drinks, fast food or services such as banking etc.

Question. When is money called an investment ?
Answer: The money that is spent to buy assets such as land, building, machines and other equipment is called investment.

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

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 association or joint venture with some existing company.

Question. Why do MNCs set up their offices and factories in those regions where they get cheap labour and other resources ?
Answer: To minimise the cost of production and maximise profit earning, MNCs set up their offices and factories in region where they get cheap labour and other resources.

Question. The MNC’s of a country sets up a production jointly with the local company of other country. State any one benefit of this joint production to the local company.
Answer: Benefits of Joint Production: (i) MNC can provide money for additional investment. (ii) MNC might bring latest technology for production.

Question. What is the basic function of foreign trade? OR State the basic functions of foreign trade.
Answer: Basic function of foreign trade is to connect the market of different countries.

Question. Define globalisation.
Answer: Globalisation can be defined as the integration between countries through foreign trade and foreign investments by Multinational Corporations (MNCs).

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 are the ways to interconnect countries ?
Answer: (i) Foreign trade, (ii) Foreign investments, and (iii) Movement of people.

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

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

Question. What is meant by trade barrier ?
Answer: Trade barrier refers to the restriction imposed by the government to stop or reduce the export/import of the specified commodities.

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

Question. What is Liberalisation ?
Answer: Liberalisation is the process of removing barriers or restrictions to trade and investment limits set by the government.

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

Question. How many countries are the members of WTO ?
Answer: 165 countries.

Question. What is the objective of WTO ? OR What was the main aim of World Trade Organisation?
Answer: The main aim of World Trade Organisation (WTO) is to liberalise international trade.

Question. What is the full form of SEZ?
Answer: Special Economic Zone.

Question. Name some of the Indian multinationals.
Answer: Videocon (Electronics), Tata Motors (automobiles), Infosys (IT), Ranbaxy (medicines), Asian Paints (paints), Sundaram Fasteners (nuts and bolts) etc.

Assertion and Reasoning Based Questions

Mark the option which is most suitable :
(a) If both assertion and reason are true and reason is the correct explanation of assertion.
(b) If both assertion and reason are true but reason is not the correct explanation of assertion.
(c) If assertion is true but reason is false.
(d) If both assertion and reason are false.

Question. Assertion : Global production has a complex structure.
Reason : Production of one good may take place in different parts of the world. For instance, an equipment may be produced by combining components produced in different countries.
Answer: (a) Globalization leads to connectivity of different countries and goods and services can be transported across the world. Goods, components produced in different parts of the world can be used for production in any country.

Question. Assertion : Local businesses may set up joint production process with MNCs and earn higher profits.
Reason : MNCs can provide money for additional investments, like buying new machines for faster production.
Answer: (a) At times, MNCs set up production jointly with some of the local companies of the host countries. The benefit to the local company from such joint production is two-fold as MNCs can provide for additional investments and can bring in newer technology of production that result in fast-paced production.

Question. Assertion : MNCs can exert a strong influence on production at distant locations.
Reason : MNCs set up partnerships with local companies, use local companies for supplies, compete with the local companies or buy them up.
Answer: (a) By setting up partnerships with local companies, by using the local companies for supplies, by closely competing with the local companies or buying them up, MNCs are exerting a strong influence on production at distant locations. As a result, production in widely dispersed locations is getting interlinked.

Question. Assertion : Foreign trade creates an opportunity for the producers to reach beyond the domestic markets.
Reason : Foreign trade expands the choice of goods beyond what is domestically produced.
Answer: (b) Foreign trade creates an opportunity for the producers to reach beyond the domestic markets and thus expands the choices available for consumers.

Question. Assertion : Due to foreign trade, producers in different countries closely compete with each other.
Reason : Foreign trade leads to similar prices of good across boundaries, and the producers who do not offer competitive prices may lose the market share.
Answer: (a) Due to foreign trade, producers in different countries closely compete with each other. This is because the price of similar goods tends to become equal in different markets. Therefore, if a good is priced higher in domestic market, consumers may prefer importing it from another country at a lower price.

Question. Assertion : Foreign trade and foreign investment results in disintegration of production across countries.
Reason : MNCs disrupt the production processes in domestic country.
Answer: (d) The result of greater foreign investment and greater foreign trade has been greater integration of production and markets across countries. When MNCs conduct joint business processes with local companies, the benefit to local companies is massive as they receive investment funds and exposure to different production techniques.

Question. Assertion : Rapid improvement in technology has been one major factor that has stimulated the globalisation process.
Reason : Developing countries are likely to become at par with developed countries in terms of technological development due to globalisation.
Answer: (b) Since globalisation leads to movement of goods, services, people and technology across nations, developing countries are likely to become at par with developed countries in terms of technological development.

Question. Assertion : A tax on imports makes the market for imported goods lucrative in terms of earning higher profits.
Reason : Taxes are imposed to ensure smooth trade between nations and higher tax revenues for the governments of the countries.
Answer: (d) Taxes increase the price of imported goods, and so the demand for imports is likely to go down. As a result, the profits of producers who sell imported goods are also likely to reduce. Governments impose taxes to regulate the amount and quality of goods that enter a nation and to protect domestic industry from foreign competition.

Question. Assertion : The removal of barriers to trade is known as liberalisation.
Reason : Liberalisation of trade allows businesses to freely decide which goods to import and export.
Answer: (b) The removal of barriers to trade is known as liberalisation, and the businesses freely deciding which goods to import and export is an outcome of liberalisation not a reason for liberalisation.

Question. Assertion : Globalisation leads to increased competition in international and domestic markets.
Reason : Globalisation also makes the consumers better off as they have a wider variety of goods to choose from at lower prices.
Answer: (b) Globalisation leads to increased competition in international and domestic markets as there is free movement of goods, services, labour and funds across countries. Also, consumers are better off as they get better quality and increased variety of goods at lower prices.