Globalisation and The Indian Economy 1. OBJECTIVE QUESTIONS L_ The reason due to which multinational companies set up their branches in other « (a) cheap Inbour and resources (b) welfare motive uploy vent e Ans : (a) cheap labour and resources Globalisation will result in: (a) more co among, producers (b) ess com (©) no change (a) Ans : (a) tition among producers 8 1 com among produ ctitio ms ne of the above jore competition among producers 3 Till which time period, within the countries? (a) Middle of twen (b) Endl of tw (©) Sta (a) Till nineteenth century Ans : (a) Middle of twe production was organised th cen 14 of twentieth century An important factor causing globalisat (a) more income (©) yee (a) urban + (¢) yechnological developine 8. Choose the reason for which MNCs are attracted to India for investinents. hhas educated English speaking people professionals if (©) India has lot of natural resources (d) All of the above Aus : (d) All of the above 6. Globalisation conditions: (a) of all the people nt in living (b) of people in the developed « (6) of workers in (a) none of the above he developing coutries Ans : (c) of workers in the developing coutries Why did the Indian Government restricted foreign tie producers (b) To increase competition (©) To know t (a) an Aus : (a) To protect do international level of quality When did the India of libe went introduced a policy lisation known as “New Economie Policy"? (a) 1980 (b) 2000 (©) 1994 (a) 191 Ans : (d) 1991 ‘countries reap equally the lly is known as (b) Fair globalisation (a) efits of fore (a) Internation (©) Liberalisation Ans trades eq lisation tal globalisation (b) Fair globalisation To check the free flow of Chinese goods in the Indian parkets, what the Indian govern (a) Ban trade with China (b) Impose tax on imports (©) Impose tax on exports (a) Complain to UNO ‘Ans : (b) Impose tax on imports BPOs have benefited growth of: (b) national companies (4) none of these (a) local companies (e) MNCs Ans : (c) MNCs The past two decades of globalisation has seen rapid (a) goods, services and people between countries (b) goods, services and investiments between countries (c) goods, services and people between countries Aus: (b) goods, services and investments between2 Liberalisation is (a) more trade (b) removing barriers or restrictions set by the (©) checking bar (4) help by the goverume ‘Ans : (b) joving barriers or restrictions set by the In earlier following things’ (a) Finished goods (©) Food stufis Ans : (d) All of these rials (a) All of these al of: Uder liberal policy there has been re (a) restrictions (b) license (©) trade (4) both (a) and (b) Ans : (a) all of the above ‘The money spent on buying assets su building, machinery ete is known as (a) capital (b) rent (6) invest (4) production Ans (c) investment Improvement in transport has helped i (a) globalisation (©) privatisation Ans (b) liberalisa (4) none of these (a) globalisation Ac than (a) big company (b) international company (©) foreign company (4) multinational Ans : (d) mult pany’ that o ‘Tata Steel is a (a) Am MNC INC (©) Chi (4) none of these Ans : (b) Indian MNC Enabling producers of one country to sell their goods in other countries is known as (a) globalisation (b) trade (©) foreign trade (4) international trade Ans : (c) foreign trade uber of choices fo (b) selle (a) gove Foreign trad (a) producers gives mor (©) buyers Ans : (c) buyers petition between Indian and Chin proved better because of In the cor in Indian markets, Chi (a) low price and variety toys (b) good shape (©) trade relations (4) shigh price and quality ‘Ans : (a) low price and variety ‘Ans : (b) buy existing local companies A, The process of rapid integratios between countries due to greate ‘and foreign trade is known as (a) Integration of markets (b) International trade (©) MNC (4) Globalisation Ans (4) Globalisatio 2. FILL IN THE BLANK DIRECTION : Complete the appropriate word(s). following statements with L- Another name for the World Bank is Ans : IBRD 2 ‘owns or controls production in more than one Aus : MNC 2. Special Economie Zones re being setup by and ‘governments, Aus : Central, State ‘ monitors the liberalisation of trade at international level ‘Aus : WTO. 5. Exports now finance over 80% of imports, as compared to 60% in 1985. Thi ‘Ans : Globalisation situation is because of 3. TRUE/FALSE DIRECTION : Read each of the following. state if it is true or false 1 MNCs set up production units on the basis of proximity to the markets Ans : True 2 Foreign trade creates an opportunity for the retailers to reach beyond the domestic mar Aus : False Z, do not to pay taxes for first five years True n among producers are Ans : False5. MNCs are playing a major role in the globalisation process. Ans : True 4. ASSERTION AND REASON DIRE! (a) If Both assertion and reason are true, and reason ‘planation of assertion, ION : Mark the option which is most suitable is the correct (b) IF Both assertion and reason are true, bi is not the correct explanation of assertion (©) If Asserti (4) If Both assertion and reason are false. is true, but reason is false 1. Assertion : Global production has a complex st Reason : Production of one good may take place in different parts of the world. For instance, an equipment nay be formed by co 5 produced in different countries. Ans: (a) Both assertion and reason is the correct explanation of assertion, nbining compor Globalization leads to connectivity of different countries and goods and services can be transported across the world. Goods, components produced in different parts of the world can be used for producti in any country Assertion: Local * upjoint prod process with MNCs and earn higher profits Reason : MNCs can provide money for add invest production, Ans: (a) Both assertion and the correct explanation of assertion. ional nts, like buying new machines for faster mes, MNCs set up productio local companies of the host countries. The benefit he local company from such joint production is two- fold ax MNCs ean provide for additional invest in newer technology of production t result in fast-paced production. j 3. Assertion : MNCs can exert a strong infh production at distant locations Reason : MNCs set up partnerships with local companies, use local companies for supplies, compete witnghe local com or buy them up. Ans : Ans. (a) Both assertion and reason are true, and reason is the correct explanation of assertion, and can b By setting up partnerships with local compan) by using the local companies for supplies, by closely ‘competing with the local companies or buying thei MNCs are exerting a strong 4 Assertion : Foreign trade creates an opportun the producers to reach bey narkets. Reason : Fore mxpands the choice of goods what is domestically produced. bey Ans: (b) Both assertion and reason are true, but reason is not the correct explanation of assertion. Foreign trade creates an opportunity for the producers to reach beyond the domestic marl expands the choices available for consiun Assertion : Due to foreign trade, producers in different tries closely compe th Reason : Forvign trade leads to similar prices of good across boundaries, and the producers who do not offe competitive prices may lose the Ans : (a) Both asertio reason is the correet explany with each parket share fand reason are true, a ion of assertion, Due to foreign trade, producers in diffe closely. cou pete with each other. This is because ds to become equal in 1s may prefer importing ry at a lower price. Assertion : Foreign trade and fore results in disintegration of production across eo Reason : MNCs disrupt the production processes in domestic country Ans : (d) Both assertion and reason are false. ‘The result of greater foreign investment and greater foreign trade has been greater integration of production and markets across countries. When MNCs conduct joi < processes with local com nefit to local companies is massive as Assertion : Rapid improve ‘one major factor that has st process. Reason : Developing countries are likely to become at par with developed countries in terms of technological development due to globalization, Ans : (b) Both asse reason is not the co ut in technology has been uulated the globalization jon and reason are true, ect explanation of assertion. Since globalization leads to movement of goods, services, people and technology across nations, developing countries are likely to become at par with developed countries in terius of technological velop Assertion : A tax on imports makes the market for imported goods lucrative in terms of earning higher profits Reason : Taxes are imposed to ensure smooth trade between nations and higher tax revenues for the governments of the countries. Ans : (d) Both assertion and reason are false. ‘Taxes increase the price of imported goods, and so the and for imports is likely to go down, As a result the profits of producers who sell imported goods are also likely to reduce. Governments impose taxei to regulate the amount and quality of goods that enter a nation and to protect domestic industry fr°m foreign competition. Assertion : The removal of barriers to trade is known as liberalizati Reason : federalization of trade allows businesses to freely decide which goods to import and export. Ans: (b) Both assertion and reason are true, reason is not the correct explanation of assertion.The re is known as liberalization, and the bu which goods to import a liberalization not a reason for liberalization to tr esses freely deciding utcome of ral of ba wereased markets Assertion : Globalization leads competition in i sand donest Reason : Globalization also makes th better off as they have a wider variety of goods to choose from at lower prices, Ans: (b) Both assertion and reason are ut reason is not the correct explanation of assertion. Globalization leads to increased competition in international and domestic markets as there is free ant of goods, services, labour and funds across countries, Also, consumers ate better off as they get better quality and increased variety of goods atlower prices.