NCERT TEXTBOOK QUESTIONS
Questions in the Exercise
Q.1. What do you understand by globalisation? Explain in
your own words.
Ans. Globalisation means integrating the economy of a
country with the economies of other countries under conditions of free flow of trade, capital
and movement of persons across borders. It includes
(i) Increase in foreign trade
(ii) Export and import of techniques of production.
(iii) Flow of capital and finance from one country to
another
(iv) Migration of people from one country to another.
Q.2. What was the reasons for putting barriers to foreign trade and foreign investment by the Indian government? Why did it wish to remove these barriers?
Ans. The Indian government had put barriers to foreign trade
and foreign investment because at that time it was necessary to protect the Indian producers from
the foreign competition.
In New Economic Policy in 1991, it was thought by the
government to remove these barriers so that Indian producers can compete with producers around
the globe. Thus competition improves the quality of their products.
Q.3. How would flexibility in labour laws help companies?
Ans. Flexibility in labour laws helps companies to cut down
the cost of production. Now, instead of hiring workers on a regular basis, companies hire workers
flexibly for short periods and this reduces the cost of labour for the company.
Q.4. What are the various ways in which MNCs set up or control production in other countries?
Ans. Multinational Corporations (MNCs) set up their factories or
production units close to markets where they can get desired type of skilled or unskilled
labour at low costs along with other factors of production. After ensuring these conditions MNCs
set up production units in the following ways :
(a) Jointly with some local companies of the existing
country.
(b) Buy the local companies and then expand its production with
the help of modern technology.
(c) They place orders for small producers and sell these
products under their own brand name to the customers worldwide.
Q.5. Why do developed countries want developing countries to
liberalise their trade and investment? What do you think should the developing
countries demand in return?
Ans. Developed countries feel that all barriers to foreign
trade and investment are harmful for international trade. They want that trade between countries
should be free. Developed countries like the USA
and UK
have high production capacity and latest technology.
Developing countries should demand fair globalisation which
ensures opportunities and benefits for all. Interest of the workers should also be
taken care of.
Q.6. “The impact of globalisation has not been uniform.” Explain this statement.
Ans. While globalisation has benefited the well-off
consumers and also producers with skill, education and wealth, many small producers and workers have
suffered as a result of the rising competition.
Q.7. How has liberalisation of trade and investment policies helped the globalisation process?
Ans. Liberalisation of trade and investment has facilitated
globalisation by removing barriers to trade and investment.
At international level, WTO has put pressure on developing
couintries to liberalise trade and investment.
Q.8. How does foreign trade lead to integration of markets across countries? Explain with an example.
Ans. Foreign trade provides opportunities for both producers
and buyers to reach beyond the markets of their own countries. Goods travel from one
country to another.
Competition among producers of various countries as well as
buyers prevails. Thus foreign trade leads to integration of markets across countries. For
example, during Diwali season, buyers in India
have the option of choosing between Indian and Chinese decorative lights and bulbs. So this provides an opportunity to expand business.
Q.9. Globalisation will continue in the future. Can you imagine what the world would be like twenty years from now? Give reason for your answer.
Ans. After twenty years, world would undergo a positive
change which will possess the following features—healthy competition, improved productive
efficiency, increased volume of output, income and employment, better living standards, greater
availability of information and modern technoloy.
Reason for the views given above : These are the favourable factors
for globalisation :
(a) Availability of human resources both quantitywise and
qualitywise.
(b) Broad resource and industrial base of major countries.
(c) Growing entrepreneurship
(d) Growing domestic market.
Q.10. Supposing you find two people. 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?
Ans. Benefits of globalisation of India :
(a) Increase in the volume of trade in goods and services
(b) Inflow of private foreign capital and export orientation
of the economy.
(c) Increases volume of output, income and employment.
Negative Impact / Fears of Globalisation.
(a) It may not help in achieving sustainable growth.
(b) It may lead to widening of income inequalities among
various countries.
(c) It may lead to aggravation of income inequalities within
countries.
Whatever may be the fears of globalisation, I feel that it
has now become a process which is catching the fancy of more and more nations. Hence we must
become ready to accept globalisation with grace and also maximise economic gains
from the world market.
Q.11. Fill in the blanks :
Indian buyers have a greater choice of goods than they did
two decades back. This is closely associated with the process of (1) . Markets in India are
selling goods produced in many other countries. This means there is increasing (2) with other countries. Moreover, the rising number of brands that we see in the
market might be produced by MNCs in India.
MNCs are investing in India
because (3) . While consumers have more choices in the market, the effect of rising (4) and (5) has meant greater
(6) among the producers.
Ans. (1) Globalisation (2) Trade (3) They can get cheap
labour (4) Prices (5) Standard (6) Competition
Q.12. Match the following.
(i) MNCs buy at cheap rates from small producers (a)
Automobiles
(ii) Quota and taxes on imports are used to (b) Garment,
footwear, sports
regulate trade items
(iii) Indian companies who have invested abroad (c) Call
centres
(iv) It has helped in spreading of production of services.
(d) Tata Motors, Infosys, Ranbaxy
(v) Several MNCs have invested in setting up factories (e)
Trade barriers.
in India
for production of
Ans. (i) (b) (ii) (e)
(iii) (d) (iv) (c) (v) (a)
Q.13. Choose the most appropriate option.
(i) The past two decade of globalisation has seen rapid
movements of
(a) goods, services and people between countries.
(b) goods, services and investments between countries.
(c) goods, investment and people between countries.
(ii) The most common route for investments by MNCs in
countries around the world is to
(a) set up new factories.
(b) buy existing local companies.
(c) form partnership with local companies.
(iii) Globalisation has led to improvement in living
conditions
(a) of all the people
(b) of people in the developed countries.
(c) of workers in the developing countries.
(d) none of the above.
Ans. (i) (a) (ii) (b) (iii) (c)