Home work : Ch.

Globalisation
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Q5. 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. 1.Developing countries possess raw materials, market, cheaply available

skilled and unskilled labour. Developed countries want to make use of resources
of developing countries for their own profit. Developed countries want
liberalised policies for trade and investment so that MNC’s can set up industries
in small and developing nations and earn more profit.

2. Developing countries should demand a fair price for their resources, labour
and facilities provided for MNC’s of developed nations. The developing nations
should also demand protection of domestic producers against competition from
imports, and also some charges should be levied on MNC’s looking for setting
base in developing nations.

Q7. How has liberalisation of trade and investment policies helped the
globalisation process?

Ans. 1. With liberalisation of trade, businesses can now take their business
related decisions independently and freely. The government imposes less
restrictions and is more liberal.

2. Foreign trade and investments have become easier. Buyers have more
choices. They can choose products from domestic or foreign markets. Also
buyers get products at affordable prices.

3. Liberalisation has further improved globalisation and has led to increase

in integration of markets.
Q8. How does foreign trade lead to integration of markets across countries?
Explain with an example other than those given here.

Ans. Foreign trade leads to integration of markets across countries by the

process of imports, exports and exchange of technology.

2. Foreign trade creates an opportunities for producers to reach beyond

domestic markets ie producers can sell their products in their own country
and in markets located in other countries.

3. Consumers get more choices in goods with expansion of trade. Consumers

get more variety and quality of goods at cheaper rates. Consumers can get
better prices as due to competition similar goods are available at low prices.

4. So there are more opportunities to both buyer and seller.