Assignment no.

:04

Q1 Answer The Following Questions:

a) Define Globalization. Explain The Nature / Characteristics of Globalization.

Globalisation
Globalisation enables the coming together of individuals, corporations and resources from
different countries. The unique characteristics of globalisation have allowed people with
diverse backgrounds to interact freely. It is the vehicle that has helped global trade scale new
heights in the last few decades.
Characteristics of Globalisation
This concept has enabled economies of scale for companies in production and distribution. It
has also encouraged outsourcing and technology transfer among companies and countries,
thus increasing their interdependence on each other. The main characteristics of globalisation
are listed below:
1. Free Trade – Globalisation has helped improve trade volumes between nations with
minimal interference. The reason is that governments are not micromanaging every
minute aspect of business transactions. The Gross Domestic Product (GDP) of
countries that have accepted globalisation has also increased significantly, thus
bringing in greater prosperity. It has also resulted in better cooperation between
governments that leads to further improvement in trade.
2. Liberalization – One of the main characteristics of globalisation is the improvement
in the business climate for corporations. It has helped entrepreneurs to set up
businesses and transact both within and outside the country. The rules and regulations
for companies are relaxed significantly to allow for more trade between nations due to
globalisation. Flexibility in trade regulations pushes governments to make further
concessions to industries. Both Liberalization and Globalisation are dependent on
each other.
3. Increase in Employment – Every industry is responsible for generating both direct
and indirect jobs. And when production increases, it has a positive effect on
employment. Globalisation helps companies increase their production capacity and set
up operations in different parts of the world. It also helps boost work opportunities in
countries where these corporations have set up operations.
4. Increased connectivity between nations – Globalisation has helped countries
improve trade relations with each other. It has increased interaction between people
and businesses. Better connectivity also boosts a country’s economy and enhances the
standard of living for its citizens.
5. Interdependence – With the advent of globalisation, countries have become more
reliant on each other. Businesses get the opportunity to import cheaper raw materials
to produce their commodities. They are also being allowed to export to countries that
have more demand for their finished goods. It has helped reduce trading barriers and
build overall economic prosperity.
6. Cultural Exchange – Improvement in people to people contacts have encouraged the
intermingling of cultural practices and customs. It has allowed people to exchange
 ideas, behaviours and values with other countries. Communities are less isolated as a
result of globalisation. For example, several American eateries have penetrated
different parts of the world. Similarly, cuisine from far off countries is now readily
available in the United States.
7. Urbanization – One of the consequences of globalisation is the increase in urban
centres. When many foreign/local companies set up businesses in a particular area, it
becomes a hotbed of economic activity. The people who work in those companies
need infrastructure near their workplace in terms of housing, transport, shops and
other establishments. Globalisation leads to the building of urban centres in and
around industrial areas.
8. Standard of Living – With increased economic activity and opportunities for
employment, people have more money in their pockets. They also have more options
to choose from because of improved job opportunities. It is one of the main reasons
why globalisation allows more and more people to improve their standard of living.
9. Production Cost – In a globalized world, companies are free to establish their
operations in areas where the cost of production is low. The cheap availability of land,
labour and raw materials has become very important. So it makes sense for companies
to go where these resources are present in abundant quantities and at discounted rates.
It helps them gain over their rivals by lowering costs and improving profit margins.
10. Outsourcing – One of the characteristics of globalisation is that it allows companies
to bring in third parties from outside the country to manage specific processes. They
take this step to reduce internal costs, improve the quality of services or both.
Outsourcing is a boon for several human resource-rich countries that are looking to
generate employment. Countries like India and the Philippines have benefitted
immensely as a result of this practice.
Conclusion
Globalisation has helped nations integrate their economy with the rest of the world, and it has
reduced barriers to trade and increased economic activity manifold. It has also led to cultural,
social and technological exchanges that have helped governments tackle internal and external
challenges with greater efficiency.

b) Explain In Detail The Various Characteristics of Rular Sectors.

The ten essential characteristics of the rural Sector are as follows: a. Size of the Community
b. Density of Population c. Agriculture is the Main Occupation d. Close Contact with Nature
e. Homogeneity of Population f. Social Stratification g. Social Interaction h. Social Mobility
i. Social Solidarity j. Joint Family.
a. Size of the Community:
The village communities are smaller in area than the urban communities. As the village
communities are small, the population is also low.
b. Density of Population:
As the density of population is low, the people have intimate relationships and face-to-face
contacts with each other. In a village, everyone knows everyone.
c. Agriculture is the Main Occupation:
Agriculture is the fundamental occupation of the rural people and forms the basis of rural
economy. A farmer has to perform various agricultural activities for which he needs the
cooperation of other members. Usually, these members are from his family. Thus, the mem-
bers of the entire family share agricultural activities. That is the reason why Lowry Nelson
has mentioned that farming is a family enterprise.
d. Close Contact with Nature:
The rural people are in close contact with nature as most of their daily activities revolve
around the natural environment. This is the reason why a ruralite is more influenced by nature
than an urbanite. The villagers consider land as their real mother as they depend on it for their
food, clothing and shelter.
e. Homogeneity of Population:
The village communities are homogenous in nature. Most of their inhabitants are connected
with agriculture and its allied occupations, though there are people belonging to different
castes, religions and classes.
f. Social Stratification:
In rural society, social stratification is a traditional characteristic, based on caste. The rural
society is divided into various strata on the basis of caste.
g. Social Interaction:
The frequency of social interaction in rural areas is comparatively lower than in urban areas.
However, the interaction level possesses more stability and continuity. The relationships and
interactions in the primary groups are intimate. The family fulfills the needs of the members
and exercises control over them.
It is the family, which introduces the members to the customs, traditions and culture of the
society. Due to limited contacts, they do not develop individuality and their viewpoint
towards the outside world is very narrow, which makes them oppose any kind of violent
change.
h. Social Mobility:
In rural areas, mobility is rigid as all the occupations are based on caste. Shifting from one
occupation to another is difficult as caste is determined by birth. Thus, caste hierarchy
determines the social status of the rural people.
i. Social Solidarity:
The degree of social solidarity is greater in villages as compared to urban areas. Common
experience, purposes, customs and traditions form the basis of unity in the villages.
j. Joint Family:
Another characteristic feature of the rural society is the joint family system. The family
controls the behaviour of the individuals. Generally, the father is the head of the family and is
also responsible for maintaining the discipline among members. He manages the affairs of the
family.

Q2 Short Notes:

1) Foreign Trade.

Foreign trade is exchange of capital, goods, and services across international borders or territories.
In most countries, it represents a significant share of gross domestic product (GDP). While
international trade has been present throughout much of history, its economic, social, and political
importance has been on the rise in recent centuries.

all countries need goods and services to satisfy wants of their people. Production of goods
and services requires resources. Every country has only limited resources. No country can
produce all the goods and services that it requires. It has to buy from other countries what it
cannot produce or can produce less than its requirements. Similarly, it sells to other countries
the goods which it has in surplus quantities. India too, buys from and sells to other countries
various types of goods and services.
Generally no country is self-sufficient. It has to depend upon other countries for importing
the goods which are either non-available with it or are available in insufficient quantities.
Similarly, it can export goods, which are in excess quantity with it and are in high demand
outside.
International trade means trade between the two or more countries. International trade
involves different currencies of different countries and is regulated by laws, rules and
regulations of the concerned countries. Thus, International trade is more complex.
International or Foreign trade is recognized as the most significant determinants of economic
development of a country, all over the world. The foreign trade of a country consists of
inward (import) and outward (export) movement of goods and services, which results into.
outflow and inflow of foreign exchange. Thus it is also called EXIM Trade.
For providing, regulating and creating necessary environment for its orderly growth, several
Acts have been put in place. The foreign trade of India is governed by the Foreign Trade
(Development & Regulation) Act, 1992 and the rules and orders issued there under.
Payments for import and export transactions are governed by Foreign Exchange Management
Act, 1999. Customs Act, 1962 governs the physical movement of goods and services through
various modes of transportation.

2) Exchange Rate.

exchange rate, the price of a country’s money in relation to another country’s money. An
exchange rate is “fixed” when countries use gold or another agreed-upon standard, and each
currency is worth a specific measure of the metal or other standard. An exchange rate is
“floating” when supply and demand or speculation sets exchange rates (conversion units). If a
country imports large quantities of goods, the demand will push up the exchange rate for that
country, making the imported goods more expensive to buyers in that country. As the goods
become more expensive, demand drops, and that country’s money becomes cheaper in
relation to other countries’ money. Then the country’s goods become cheaper to buyers
abroad, demand rises, and exports from the country increase.
World trade now depends on a managed floating exchange system. Governments act to
stabilize their countries’ exchange rates by limiting imports, stimulating exports, or devaluing
currencies.