Home Work 27.10.

23

ASSIGNMENT 2023-24
CLASS: X
SUBJECT- ECONOMICS
CHAPTER-4 (Globalisation and the Indian Economy)

Glossary
1. Globalisation : It means free interaction of an economy with the economies of the rest of the
world.
2. Liberalisation : Liberalisation of the economy means to free it from direct or physical controls
imposed by the government.
3. Privatisation : It means allowing the private sector to set up industries which were earlier
reserved for the public sector.
4. MNC : It is a company that owns or controls production in more than one country.
5. Investment : The money that is spent to buy assets such as land, building, machines and
other equipment is called investment.
6. Foreign investment : Investment made by MNCs is called foreign investment.
7. Fair Globalisation : It refers to globalisation which creates opportunities for all and ensures
that its benefits are better shared.
8. WTO : It is an organization which is in favour of increasing the world trade through
globalization.
9.Trade Barrier:Barriers or restrictions that are imposed by the government on free import and
export activities are called trade barriers. Tax on imports is an example of a trade barrier
because it increases the price of imported • commodities. The government can use a trade
barrier like ‘tax’ to increase or decrease (regulate) foreign trade and to decide what kind of
goods and how much of what should come into the country.

Q 1.What are the advantages of multinational corporations?.

1.Availability of foreign investment:The MNC’s help to solve the problem of capital
and foreign investment Of the underdeveloped and developing countries. This way
these MNCs help the local producers by providing them capital and foreign investment.
2.Availability of foreign exchange: The MNC’s can be helpful in solving the problem
of foreign exchange of underdeveloped and developing countries. earlier India faced a
huge shortage of foreign exchange but with the entry of MNCs today it has surplus
Foreign Exchange Reserves.

3.Promotion of small scale industries: most of the MNC ‘s take help from small scale
and local industries in manufacturing. The products are supplied to the MNC’s Which
then sell these products under their own brand names.

4.Integration of markets: The MNC’s help in the integration of the world market. With
the entry of MNC ‘s even the small countries have opened up their domestic markets
for other countries and increased their foreign trade.

5.New technology: The MNCs have brought the new technology in India which has
promoted the process of globalisation. Information and Communication Technology has
played an important role in spreading out production of services across countries

2. what are the disadvantages of multinational corporations?

Disadvantages of multinational corporations
Harmful for the host country :The main objective of the MNC is to earn maximum
profit .To achieve this objective these companies invest their capital in underdeveloped
and developing countries. these companies exploit the resources of the host country
and earn maximum profit.
this way the resources of the host country are exploited by these companies.

Harmful for the local producers:The MNC places orders to the local companies. the
products are sold by the MNCs under their own brand names. the MNCs have power to
determine the price ,quality and other manufacturing conditions. Most of the local
producers have failed to compete with these companies so either they have to sell their
products or they have to bear loss

regional disparity: The MNCs have been proved Harmful for the goal of economic
equality in different region. the areas where these MNCs are set up are more
developed than the other areas .The development of these companies has aggravated
the problem of regional disparity.

Economic inequality: The MNCs pay more salaries and perks to their employees than
the employees of the Other companies. this widens the gap between the income of the
workers which give rise to economic inequality
5.Impact on workers:
● 1. Most employers the these days prefer to employ workers flexibly. this means
that worker jobs are no longer secure.
● 2. due to globalisation Only skilled and educated workers get job opportunities.
earlier companies employ workers on permanent basis but now these companies
employ workers on temporary basis
● 3. Workers have to work for long working hours which can cause health issues.
● 4. Workers are denied their fair share of benefit as the profit always goes into
the pockets of these companies.
● 5. Conditions of work in the organised sector have come to resemble the
unorganised sector. These workers are working for long working hours and they
don't have a fair share in the profit so it seems that the organised sector is getting
transformed into the unorganised sector.

3.What is WTO? mention its aims and limitations

World Trade Organisation is an organisation which deals with the rules of trade among
the Nations
Aims of the WTO
1. The major aim of the WTO is to conduct the international trade among the
countries of the world in an open uniform and non discriminatory manner
2. WTO also handles trade disputes
3. the World Trade Organisation provides technical support and training to the
developing and underdeveloped economies
4. it also forms rules and regulations for all the members which have to be adopted
by the member countries for the the smooth running of trade
Limitations
Developed countries have unfairly retained trade barriers on developing countries and
have forced the developing countries to remove trade barriers on their products.

Q4. How does foreign trade play an important role in integrating the markets
across the countries? OR

How the opening up of foreign trade results in connecting the markets in different
countries?
Answer:
Main channel for connecting countries: foreign trade plays an important role for
connecting countries as goods and services are exchanged at the international level.
 expansion of local market: foreign trade increases an opportunity for the producers to
reach beyond the domestic markets. producers can sell their products not only in the
markets located within the country but they can also compete with the products of other
countries
better choice for the buyers: due to the expansion of trade the goods and services
are exchanged among the countries. consumers get better variety and quality products
at cheaper rates.
Competition: trade promotes competition both within as well as outside the nation.
Producers of different countries compete against each other even though they are
separated by thousands of miles.These producers try to provide better quality products
to the consumers on cheaper rates just to increase the demand for their own products in
the market.
impact on prices: Expansion of market and competition among the producers provide
the better quality products to the consumers on cheaper rates.The producers generally
keep the prices of their products low just to increase the demand in the market to earn
more profit.

Globalisation: trade play an important role in the process of globalisation. goods and
services are exchanged among the countries which pave way for the foreign trade.
Countries can have friendly relations and MNCs can be set up. This way when
economies of a country come in contact with economies of the rest of the world result
into globalisation

5.What are special economic zone? why have they been set up?
Ans:
● special economic zone are the zones where the world class facilities like water
,electricity, roads, transport, recreation and education are available .The aim is to
attract foreign companies to invest in India
● they have been set up to attract foreign companies to invest in India
● companies with production units in the special economic zones do not have to
pay taxes for the initial period of 5 years
● government has also allowed flexibility in the labour law to attract foreign
investment
6. What is liberalisation? What steps were taken by the government to liberate the
Indian economy?
OR
‘Barriers on foreign trade and foreign investment were removed to a large extent in India
since 1991’. Justify the statement.
Ans: liberalisation of the economy means to free an economy from direct or physical
controls imposed by the government
following steps were taken
removal of trade barriers: under the policy of globalization the government has
removed various restrictions from the import and export of the goods and services .
Now the companies are free to import goods in India. Indian companies are free to
export goods and services abroad.
liberalisation of investment: under this policy MNC’s are free to invest in India. Many
companies have invested in infrastructure automobiles, soft drinks etc. The Indian
government is also encouraging these companies to invest in India . the government
has created special economic zones which provide electricity, road transport and other
facilities.
Abolition of License: The government has abolished the policy of license. MNC’s do
not require any license to set up their companies in host country rather govt has to
provide the world class facilities under SEZ.

7.Rapid improvement in technology has been one major factor that has
stimulated the globalisation process. Explain
OR
Information and Communication Technology has played a major role in
spreading out production of services across countries. support the statement
with suitable examples
OR
.How has Information Communication Technology stimulated globalisation
process?

1. Improvement in transportation : the world has witnessed the major

improvements in transportation . Due to the improvement in information and
technology transportation of goods can be easily tracked .
2. Easy to get information: due to the development of Telecommunication and
computers there is a great development in foreign trade and foreign investment.
because of modern facilities it is very easy to assess information and to
communicate in remote areas. Through the internet services one can
communicate across the world at negligible costs.

3. E-marketing: With the help of modern technology the transferring of data and
other information has become easier because with the help of these modern
facilities one can get the information about the products at his own place and can
make online transactions.
 4. expansion of market: the use of IT has helped the MNCs to expand their
market throughout the world. MNCs can set up their call centres in developing
countries and information about their products can easily be shared throughout
the world.
5. To link the market: Information and Communication Technology has created an
opportunity for the producers to reach beyond their own markets .producers can
sell their products not only within their own country but they can also compete in
the other countries. the information about their product can be spread with the
help of this modern technology. consumers can get information about their
products..

8.Why had the Indian government put barriers to foreign trade and foreign investments after
independence? Analyse the reasons.

Answer:

1. The Indian government after independence had put barriers to foreign trade and
investment. This was done to protect the producers within the country from
foreign competition. Industries were just coming up in the 1950s and 1960s and
competition from imports at that stage would not have allowed these industries to
develop and grow. Imports of only essential items such as machinery, fertilisers,
petroleum etc. was allowed.
2. Another reason was to protect the Indian economy from foreign infiltration in
industries affecting the economic growth of the country as planned. India wanted
to move faster to catch up with the main industries in the world market and
therefore had to keep an extra watch on its progress in international trade .

9.Explain the factors that have enabled Gobalisation ?

Ans: Explain following points in this answer:
Policy of Liberalisation:
Role of IT and Communication
Foreign Investment:
Role of Government:
Role of WTO