Class 10 Economics Chapter 4 Globalisation and the Indian Economy Important Question Answer NCERT

Class 10th
Subject Economics
Category Important Questions

Class 10 Economics Chapter 4 Globalisation and the Indian Economy Important Question Answer NCERT

Q1. What is Globalization ? Most Important

Ans – Globalization is the process of rapid integration or interconnection between countries. MNCs are playing a major role in the globalization process.

Q2. What do you mean by Multinational Company?

Ans – It is a company having business operations in at least two countries.

Q3. Write the name of one big Indian company which is emerged as MNC due to Globalization.

Ans – Tata Motors

Q4. Why are the Chinese toys popular in India ? Most Important

Ans – Chinese toys are popular in India because of the cheaper prices and new designs.

Q5. Write full form of G.D.P. Most Important

Ans – Gross Domestic Product

Q6. What is meant by trade barriers?

Ans – A trade barrier refers to any regulation or policy that restricts trade, especially tariffs, quotas, license etc. Governments can use trade barriers to increase or decrease foreign trade and to decide what kind of goods and how much of each, should come into the country.

Q7. What do you mean by I.S.O. ?

Ans – Incentive Stock Options

Q8. Write full form of W.T.O. Most Important

Ans – World Trade Organisation

Q9. What is Globalization? Explain any four advantage of globalization in brief.
Describe in brief good effects of Globalization on India. Most Important


Ans – Globalization is the process of rapid integration or interconnection between countries. MNCs are playing a major role in the globalization process.

Good effects/advantages of Globalization on India are as follows :

(i) People are enjoying higher standards of living after globalization.

(ii) MNCs have increased their investments in India over the past 20 years, which means they are investing in India and are interested in industries such as cell phones, automobiles, electronics, soft drinks, fast food or services such as banking in urban areas. These products have a large number of well-off buyers. In these industries and services, new jobs have been created. Also, local companies supplying raw materials, etc. to these industries have prospered.

(iii) Several of the top Indian companies have been able to benefit from the increased competition. They have invested in newer technology and production methods and raised their production standards. Some have gained from successful collaborations with foreign companies.

(iv) Globalisation has enabled some large Indian companies to emerge as multinationals themselves. eg. Tata Motors, Infosys, Ranbaxy etc.

(v) Globalisation has also created new opportunities for companies
providing services, particularly those involving IT.

Q10. Give arguments against the impact of Globalization on Indian Economy. Most Important
Give arguments against Globalisation.

Ans – Arguments against Globalisation are as follows :

  1. Globalization sometimes doesn’t allow the domestic Industries to grow.

  2. Globalization may also lead to dumping of goods from one country in another country.

  3. Due to globalization local jobs are taken by migrants or people or foreigners and local residents do not get any jobs.

  4. It also leads to exploitation of Local resources i.e. raw material. where the local residents cannot make use of it.

  5. Globalisation has been a source of denial of democratic rights to ordinary citizens and their governments.

Q11. Why do the MNC expand their market by placing order for production with small producers ?

Ans – The MNC expand their market by placing order for production with small producers because this will reduce the cost of production and also reduce the risk of local competition. MNCs sell these products under their products under their own brand name.

Q12. What is MNC ? Mention the conditions that determine to set up production in other countries by MNC.

Ans – A MNC (Multinational Corporation) is a company that owns or controls production in more than one nation.

Conditions that determine to set up MNC are as follows  :

(i) MNCs set up offices and factories for production in regions where they can get cheap labour i.e. the skilled and unskilled labours at low costs.

(ii) MNCs are set up in the countries where the favourable government policies exist.

(iii) Availability of factors of production such as raw material, water, electricity and transport.

(iv) Standard Safety measures for assured production.

(v) Availability of market close to that place.

Q13. Distinguish between Foreign Trade and Foreign Investment.

AnsForeign Trade : It refers to the buying and selling of goods and services between countries.

Foreign Investment : Investment made by MNCs to buy assets such as land, building, machines and other equipment is called Foreign Investment.

Q14. What are the three main functions of World Trade Organization (W.T.O.) ? Most Important

Ans – Three main functions of World Trade Organization are as follows :

(i) It operates a global system of trade rules.

(ii) It settles trade disputes between its members.

(iii) It acts as a forum for negotiating trade agreements.

Q15. What is World Trade Organization (W.T.O.) ? What are its advantages and disadvantages for Indian Economy?

Ans – It is an international organization whose aim is to liberalise international trade. Started at the initiative of the developed countries, WTO establishes rules regarding international trade, and see that these rules are obeyed.

Advantages of WTO for Indian Economy Disadvantages of WTO for Indian Economy
  • India’s growth and development have been increased by transferring and exchanging technology and ideas.
  • The WTO helped better settle trade disputes in a well-defined and structured manner.
  • India’s export competitiveness has been improved by the WTO.
  • The introduction of product patents in India by MNCs caused a hike in drug prices (medicines).
  • It proved detrimental to India’s interest as it provided grounds for the Chinese invasion of the Indian market through dumping.

Q16. What are the reason for putting barrier to foreign trade and foreign investment by the Indian Government? Why did it wish to remove these barriers?

Ans – The main reason for putting barriers to foreign trade and foreign investment by the Indian government is to protect the producers and small industrialists of our country from foreign competition.

But later, it was accepted by the government that foreign competition would encourage Indian industrialists to improve the quality of their products, and that removing these barriers would increase trade and the quality of products produced in the country.

Q17. Why do developed countries want developing countries to liberalize their trade and investment? What do you think should the developing countries demand in return ?

Ans – Developed countries want developing countries to liberalise their trade and investment because MNCs can set up industries in small and developing nations, which are less expensive and can earn them more profit. The labour cost and manufacturing costs decrease, and this decrease in cost results in an increase in profit. Also, setting up factories and industries in developed countries increases competition. The developing countries should, in turn, ask for a fair removal of trade barriers in order to protect their own industries.

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