Question 21.
In matter of years, how have markets been transformed ?
Answer:
The markets have been transformed because now latest models of cameras, cars,watches, mobile phones etc. are available there.
Question 22.
What is MNC or Multi-National Corporation ?
Answer:
MNC or Multi-National Corporation is a company that owns or controls production in : more than one nation.
Question 23.
In which regions MNCs set up offices and factories for production ?
Answer:
MNCs set up offices and factories in regions with features as mentioned below :
- Close to the market.
- Availability of skilled/unskilled labour at low cost.
- Favourable government policies.
Question 24.
What is investment and foreign investment ?
Answer:
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.
Question 25.
How MNCs control production across globe ? Mention any one way.
Answer:
Large MNCs in developed countries place orders for production with small producers such as garments, footwear etc.
Question 26.
What is Ford Motors ? When did it come to India and what did it do ?
Answer:
- 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 ?1700 crore to set up a large plant near Chennai. This was done in collaboration with Mahindra and Mahindra.
Question 27.
What was effect of importing Chinese toys to India ?
Answer:
Chinese toys became popular in the Indian markets.Within a year, 70 to 80 per cent shops have replaced Indian toys with Chinese toys.
Question 28.
What is the result of greater foreign investment and greater foreign trade ?
Answer:
Greater foreign investment and greater foreign trade leads to greater integration of production and markets across countries.
Question 29.
What is globalisation ?
Answer:
Globalisation is process of rapid integration or interconnection between countries. The countries are connected by movements of goods, services, investments and technology.
Question 30.
How information and communication technology is useful in foreign trade ?
Answer:
Telecommunication facilities – telegraph, telephone including mobile phones, fax etc. are used to contact one another around the world, to access information instantly, and to communicate from remote areas.
Question 31.
What is a trade barrier ?
Answer:
Restrictions on foreign trade are called trade barrier. For example tax on imports is a trade barrier.
Question 32.
Why had the Indian government after independence put barriers to foreign trade and foreign
investment ?
Answer:
The Indian government put barriers to protect the producers within the country from foreign competition. Industries were just coming up and the competition from imports would not allow the Indian industries to come up.
Question 33.
What is liberalisation ?
Answer:
Removing barriers or restrictions set by the government is known as liberalisation.
Question 34.
When did the policy of liberalisation start in India ?
Answer:
Around 1991.
Question 35.
What is the aim of World Trade Organisation ?
Answer:
The aim of World Trade Organisation is to liberalise international trade.
Question 36.
Which country gives a massive sum of money to farmers so that they can sell their farm products at abnormally low prices in other countries ?
Answer:
USA.
Question 37.
Which Indian companies have emerged as multi-national companies as a result of globalisation ? Name any two.
Answer:
- Tata Motors (Automobiles)
- Infosys (IT)
- Ranbaxy (Medicines)
- Asian Paints (Paints).
Question 38.
How many workers are employed in small-scale industries in India ?
Answer:
The small-scale industries in India employ the largest number of workers (20 million) in the country, next only to agriculture.
Question 39.
How have workers suffered under the flexible labour laws ? Mention any two points.
Answer:
- Workers are now employed on a temporary basis so that the employers do not have to pay workers for the whole year. ,
- Wages are low and workers are forced to work overtime to make both ends meet.
Question 40.
How can the globalisation be made more fair ? Write two steps and what will be its effect ?
Answer:
(1)
- The government must protect the interest of all the people in the country.
- The government can ensure that labour laws are properly implemented and the workers get their rights.
(2) Fair globalisation would create opportunities for all, and also ensure that the benefits of globalisation are shared better.
Question 41.
What changes have taken place in our markets during the last few years ?
Answer:
In the last few years, our markets have been transformed as mentioned below :
- There is a wide choice of goods and services in the markets.
- The latest models of digital cameras, mobile phones and televisions made by the leading manufacturers of the world are available in the markets. Not only this these products are affordable and within reach of the people.
Thus a few years back, there were only few brands of different goods in the markets. A consumer did not have real choice and had no option to purchase a particular brand. But now he has a number of options between Indian as well as foreign brands.
Question 42.
What is a trade barrier ?
“Tax on imports is one type of trade barrier. The government could also place a limit on the number of goods that can he imported. This is known as quotas. Can you explain using the example of Chinese toys, how quotas can be used as trade barriers ? Do you think this should be used ? Discuss.
Answer:
- Trade barrier means restrictions to increase or decrease foreign trade and to decide what kinds of goods and how much of each should come into the country.
- Tax on imports is a trade barrier because this will lead to increase in the price of the product. In such a situation foreign products will become costlier than Indian goods and the Indian producer will be in a position to sell their products and earn profits.
- In case of Chinese toys, quotas can be used as trade barrier because the government can put restrictions on the number and type of toys that can be imported into the country In such case, there will be less competition between Indian toys and Chinese toys. The Indian toy makers may also not suffer losses. Quotas should be used as trade barriers in the interest of the Indian toy makers.
Question 43.
Give arguments in favour of WTO.
Or
Write a short note on World Trade Organisation.
Ans.
(1) World Trade Organisation was set up in 1995 at the initiative of the developed countries. Its aim is to liberalise international trade. Its headquarters is at Geneva. WTO establishes rules regarding international trade among countries of the world in an open,uniform and non-discriminatory manner. In 2006,149 countries of the world were its members.
(2)
- With the liberalisation of foreign trade and investment, it is necessary to have an international organisation to supervise the trade between countries.
- It sees that all the countries in the world liberalise their policies.
- It allows free trade for all i.e., in developing and developed countries.
- It implements the rules for trade in all the countries.
- WTO looks after to make globalisation more fair to create opportunities for all and also ensure that the benefits of globalisation are shared better.
Question 44.
Describe the major problems created by the globalisation for a larger number of small producers and workers.
Or
Describe the effects of globalisation on small producers and workers.
Answer:
Small producers such as producing batteries, capacitors, toys have been hit hard due to competition with the MNCs. They could not compete on the issue of price and quality. As a result of it, their production decreased and many units were closed. Many workers became jobless. Many employers prefer to employ workers on temporary basis which means workers’ jobs are no longer secure. Women are denied their fair share of benefits. Workers have to put in very long working hours without any overtime.
Also see Textbook Question 6.
Question 45.
What steps have been taken by the government to attract foreign investment ?
Answer:
The steps taken by the government to attract foreign investment are as mentioned below :
- Industrial zones, called Special Economic Zones (SEZs) are being set up.
- SEZs are to have world class facilities : electricity, water, roads, transport, storage etc.
- Companies who set up production units in the SEZs do not have to pay taxes for an initial period of five years.
- The government has also allowed flexibility in labour laws g., workers can be hired for short period.
Question 46.
Describe the steps that may be taken make globalisation more ‘fair’.
Answer:
The following steps may be taken to make globalisation more fair :
- Labour laws should be implemented properly to avoid exploitation of the workers.
- The government should protect the interest of the small producers by using trade and investment barriers till they are in a position to compete with large producers or MNCs.
- The government should negotiate at the WTO for “fairer rules”.
- The government should align with other developing countries to fight against the domination of developed countries.
MULTIPLE CHOICE QUESTIONS
Question 1.
Which one of the following organisations lay 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
Answer: (d) World Trade Organisation
Question 2.
Removing barriers or restrictions set by the government is known as
(a) Globalisation
(b) Privatisation
(c) Nationalism
(d) Liberalisation
Answer
Answer: (d) Liberalisation
Question 3.
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
Answer: (c) The money spent to buy assets such as land
Question 4.
Which of the following is a ‘barrier’ on foreign trade?
(a) Tax on import
(b) Quality control
(c) Sales tax
(d) Tax on local trade
Answer
Answer: (a) Tax on import
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