4:
Globalisation and the Indian Economy
A. MCQs
1.
Globalisation refers to:
A.
Increase in government control
B. Integration of economies through trade and investment
C. Growth of agriculture only
D. Reduction in foreign trade
Answer:
B. Integration of economies through trade and investment
2.
A Multinational Corporation (MNC) is a company that:
A.
Operates in one country only
B. Is owned by the government
C. Owns or controls production in more than one country
D. Produces only agricultural goods
Answer:
C. Owns or controls production in more than one country
3.
MNCs generally set up production units where:
A.
Labour is expensive
B. Raw materials are unavailable
C. Production cost is low
D. Markets are absent
Answer:
C. Production cost is low
4.
Investment made by MNCs in another country is called:
A.
Domestic investment
B. Public investment
C. Foreign investment
D. Capital tax
Answer:
C. Foreign investment
5.
Which of the following is an example of an MNC?
A.
Village dairy cooperative
B. Ford Motors
C. Local bakery
D. Khadi store
Answer:
B. Ford Motors
6.
Foreign trade creates an opportunity for producers to:
A.
Sell only in local markets
B. Sell beyond domestic markets
C. Reduce production
D. Avoid competition
Answer:
B. Sell beyond domestic markets
7.
Which of the following helps in integrating markets?
A.
Foreign trade
B. Drought
C. Population growth
D. Inflation
Answer:
A. Foreign trade
8.
The main reason for MNCs to spread production across countries is:
A.
To increase costs
B. To reduce profits
C. To earn greater profits
D. To avoid consumers
Answer:
C. To earn greater profits
9.
Globalisation has resulted in:
A.
Less competition
B. Greater competition among producers
C. No competition
D. End of foreign trade
Answer:
B. Greater competition among producers
10.
Which factor has greatly enabled globalisation?
A.
Poor communication
B. Slow transport
C. Technological improvements
D. Less trade
Answer:
C. Technological improvements
11.
The use of containers in transportation has:
A.
Increased handling costs
B. Reduced transportation efficiency
C. Reduced costs and increased speed
D. Stopped exports
Answer:
C. Reduced costs and increased speed
12.
Which technology has played a major role in globalisation?
A.
Telegraph only
B. Information and Communication Technology
C. Bullock carts
D. Typewriters
Answer:
B. Information and Communication Technology
13.
Which service industry expanded due to globalisation?
A.
Call centres
B. Handloom only
C. Pottery
D. Carpentry
Answer:
A. Call centres
14.
Liberalisation means:
A.
Increasing restrictions
B. Removing government restrictions on trade and investment
C. Banning imports
D. Increasing taxes
Answer:
B. Removing government restrictions on trade and investment
15.
Tax on imports is called:
A.
Foreign aid
B. Trade barrier
C. Subsidy
D. Investment
Answer:
B. Trade barrier
16.
India adopted liberalisation policies mainly in:
A.
1947
B. 1965
C. 1975
D. 1991
Answer:
D. 1991
17.
Before 1991, India protected domestic industries by:
A.
Encouraging imports
B. Removing trade barriers
C. Restricting imports
D. Increasing exports only
Answer:
C. Restricting imports
18.
WTO stands for:
A.
World Trade Organisation
B. World Transport Organisation
C. World Tax Organisation
D. World Tourism Organisation
Answer:
A. World Trade Organisation
19.
The main aim of WTO is to:
A.
Restrict trade
B. Promote liberalisation of international trade
C. Ban imports
D. Control governments
Answer:
B. Promote liberalisation of international trade
20.
WTO establishes rules regarding:
A.
Local trade only
B. International trade
C. Agriculture only
D. Banking only
Answer:
B. International trade
21.
Developed countries often provide support to:
A.
Teachers
B. Farmers
C. Tourists
D. Traders only
Answer:
B. Farmers
22.
Which country is mentioned in the chapter as giving large subsidies to farmers?
A.
India
B. China
C. USA
D. Brazil
Answer:
C. USA
23.
Globalisation has benefited consumers by providing:
A.
Fewer choices
B. Better quality and lower prices
C. Higher prices only
D. Less competition
Answer:
B. Better quality and lower prices
24.
Which sector has benefited significantly from globalisation in India?
A.
IT sector
B. Traditional hunting
C. Hand grinding
D. None of these
Answer:
A. IT sector
25.
Which Indian company has emerged as a multinational?
A.
Tata Motors
B. Small village shop
C. Local dairy booth
D. Panchayat office
Answer:
A. Tata Motors
26.
Infosys is associated with:
A.
Agriculture
B. Information Technology
C. Mining
D. Fishing
Answer:
B. Information Technology
27.
SEZ stands for:
A.
Special Economic Zone
B. State Economic Zone
C. Social Export Zone
D. Special Export Zonality
Answer:
A. Special Economic Zone
28.
SEZs are established to:
A.
Reduce investment
B. Attract foreign investment
C. Stop industries
D. Increase taxes
Answer:
B. Attract foreign investment
29.
Companies in SEZs often receive:
A.
Tax benefits
B. Import bans
C. Labour bans
D. Export restrictions
Answer:
A. Tax benefits
30.
Which group has faced major challenges due to globalisation?
A.
Large MNCs
B. Well-off consumers
C. Small producers
D. Foreign investors
Answer:
C. Small producers
31.
Cheap imports often affect:
A.
Small local industries
B. Foreign companies
C. Government departments
D. Banks
Answer:
A. Small local industries
32.
Ravi in the chapter was producing:
A.
Mobile phones
B. Capacitors
C. Cars
D. Shoes
Answer:
B. Capacitors
33.
Ravi's business suffered because:
A.
Demand increased
B. Cheap imports entered the market
C. Exports increased
D. Taxes were removed on local products
Answer:
B. Cheap imports entered the market
34.
Globalisation has increased:
A.
Job security everywhere
B. Temporary employment in many sectors
C. Government employment only
D. Agricultural employment only
Answer:
B. Temporary employment in many sectors
35.
Sushila worked in the:
A.
Banking sector
B. Garment industry
C. Automobile industry
D. Mining industry
Answer:
B. Garment industry
36.
Employers prefer flexible employment because it:
A.
Increases labour costs
B. Reduces labour costs
C. Stops production
D. Reduces profits
Answer:
B. Reduces labour costs
37.
Flexible employment means:
A.
Permanent jobs for all
B. Temporary hiring according to need
C. Government jobs only
D. Higher pensions
Answer:
B. Temporary hiring according to need
38.
Which of the following is a positive impact of globalisation?
A.
Improved quality of goods
B. Closure of industries only
C. Unemployment only
D. Reduced trade
Answer:
A. Improved quality of goods
39.
Which of the following is a negative impact of globalisation?
A.
More choices for consumers
B. Better technology
C. Closure of some small industries
D. Growth of IT services
Answer:
C. Closure of some small industries
40.
Fair globalisation means:
A.
Benefits shared by all sections of society
B. Benefits only for MNCs
C. Benefits only for rich consumers
D. No foreign trade
Answer:
A. Benefits shared by all sections of society
41.
The government can make globalisation fairer by:
A.
Ignoring labour laws
B. Protecting workers' interests
C. Stopping all trade
D. Banning industries
Answer:
B. Protecting workers' interests
42.
Which organisation influences trade policies worldwide?
A.
WTO
B. RBI
C. CBSE
D. NITI Aayog
Answer:
A. WTO
43.
Globalisation leads to integration of:
A.
Markets and production
B. Villages only
C. States only
D. Rivers only
Answer:
A. Markets and production
44.
Which of the following is not a factor enabling globalisation?
A.
Improved transport
B. Internet
C. Liberalisation
D. Trade barriers
Answer:
D. Trade barriers
45.
MNCs often buy local companies because:
A.
It helps expand production quickly
B. It reduces market access
C. It increases losses
D. It avoids customers
Answer:
A. It helps expand production quickly
46.
The expansion of trade and investment has led to:
A.
Isolation of countries
B. Global integration
C. End of competition
D. Decrease in production
Answer:
B. Global integration
47.
Call centres in India provide services mainly to:
A.
Local villages only
B. Customers abroad
C. Farmers only
D. Government offices only
Answer:
B. Customers abroad
48.
Which among the following is an example of a trade barrier?
A.
Quota on imports
B. Better roads
C. E-banking
D. Mobile phones
Answer:
A. Quota on imports
49.
Competition due to globalisation encourages producers to:
A.
Improve quality
B. Stop production
C. Reduce efficiency
D. Avoid innovation
Answer:
A. Improve quality
50.
The most important driving force behind globalisation is:
A.
Panchayats
B. MNCs
C. Local markets only
D. Cooperative societies
Answer:
B. MNCs
B.
Short Answer Questions
1.
What is globalisation?
1. It
is the process of integration of economies across countries.
2. It
takes place through foreign trade and foreign investment.
3. It
increases interaction among countries.
4. MNCs
play a major role in this process.
2.
What is a Multinational Corporation (MNC)?
1. It
is a company that owns or controls production in more than one country.
2. It
sets up factories and offices in different nations.
3. It
aims to reduce production costs.
4. It
works on a global scale.
3.
Why do MNCs set up production in other countries?
1. To
get cheap labour.
2. To
access raw materials easily.
3. To
reduce production costs.
4. To
earn higher profits.
4.
How do MNCs spread production across countries?
1. By
setting up factories abroad.
2. By
purchasing local companies.
3. By
forming partnerships with local firms.
4. By
placing orders with small producers.
5.
What is foreign investment?
1. Investment
made by MNCs in another country.
2. It
includes spending on land and buildings.
3. It
also includes machinery and equipment.
4. It
is done to earn profits.
6.
How do MNCs control production in other countries?
1. By
buying local companies.
2. By
forming joint ventures.
3. By
supplying technology and capital.
4. By
controlling quality and prices.
7.
What are the benefits of foreign trade?
1. It
increases choices for consumers.
2. It
provides larger markets to producers.
3. It
encourages competition.
4. It
improves product quality.
8.
How does foreign trade lead to integration of markets?
1. Goods
move between countries.
2. Producers
compete internationally.
3. Prices
become more competitive.
4. Markets
become interconnected.
9.
What is the role of MNCs in globalisation?
1. They
increase foreign investment.
2. They
expand international trade.
3. They
spread technology.
4. They
connect production across countries.
10.
Mention any four factors that have enabled globalisation.
1. Improved
transportation.
2. Information
technology.
3. Liberalisation
policies.
4. Expansion
of international trade.
11.
How has technology helped globalisation?
1. It
has reduced transportation costs.
2. It
has improved communication.
3. It
has increased the speed of trade.
4. It
has connected markets globally.
12.
What is liberalisation?
1. Removal
of trade restrictions.
2. Reduction
of government control.
3. Easier
imports and exports.
4. Greater
freedom for businesses.
13.
What are trade barriers?
1. Restrictions
imposed on foreign trade.
2. They
include import duties.
3. They
include quotas.
4. They
regulate imports and exports.
14.
Why did India impose trade barriers after Independence?
1. To
protect domestic industries.
2. To
support new industries.
3. To
reduce foreign competition.
4. To
encourage self-reliance.
15.
Why were trade barriers removed after 1991?
1. To
increase competition.
2. To
improve efficiency.
3. To
attract foreign investment.
4. To
integrate with the world economy.
16.
What is WTO?
1. WTO
stands for World Trade Organisation.
2. It
promotes international trade.
3. It
frames trade rules.
4. It
encourages liberalisation.
17.
What are the functions of WTO?
1. Promotes
free trade.
2. Sets
international trade rules.
3. Monitors
trade agreements.
4. Encourages
trade liberalisation.
18.
Why do developing countries criticise WTO?
1. Developed
countries retain trade barriers.
2. Rich
countries provide heavy subsidies.
3. Trade
rules are often unequal.
4. Poor
countries face unfair competition.
19.
How has globalisation benefited consumers?
1. More
choices of goods.
2. Better
product quality.
3. Lower
prices.
4. Improved
living standards.
20.
How has globalisation benefited Indian companies?
1. Access
to modern technology.
2. Better
production methods.
3. Increased
exports.
4. Opportunity
to become MNCs.
21.
How has the IT sector benefited from globalisation?
1. Increase
in outsourcing work.
2. Growth
of call centres.
3. More
employment opportunities.
4. Higher
exports of services.
22.
What are Special Economic Zones (SEZs)?
1. Special
industrial areas.
2. Provide
world-class facilities.
3. Attract
foreign investment.
4. Offer
tax benefits to companies.
23.
Why are SEZs set up?
1. To
attract investors.
2. To
increase exports.
3. To
generate employment.
4. To
promote industrial growth.
24.
How has globalisation affected small producers?
1. Increased
competition from imports.
2. Reduced
market share.
3. Closure
of some units.
4. Loss
of employment.
25.
What problems did Ravi face in his capacitor business?
1. Cheap
imported capacitors entered India.
2. Demand
for local products declined.
3. Production
reduced significantly.
4. Workers
lost jobs.
26.
How has globalisation affected workers?
1. Increased
job insecurity.
2. More
temporary employment.
3. Longer
working hours.
4. Fewer
employment benefits.
27.
What is flexible employment?
1. Workers
are hired temporarily.
2. Jobs
are not permanent.
3. Employers
can hire according to need.
4. Labour
costs are reduced.
28.
Why is fair globalisation necessary?
1. Benefits
should reach everyone.
2. Workers'
rights must be protected.
3. Small
producers need support.
4. Opportunities
should be equal.
29.
What role can the government play in fair globalisation?
1. Protect
workers' rights.
2. Support
small producers.
3. Implement
labour laws.
4. Ensure
fair trade policies.
30.
Explain the positive and negative effects of globalisation.
1. Positive:
More choices and better quality goods.
2. Positive:
Increased investment and jobs.
3. Negative:
Small producers face competition.
C. Long Answer Questions
1. Explain the meaning of globalisation.
1. Globalisation is the process
of rapid integration among countries.
2. It takes place through foreign
trade and foreign investment.
3. Goods and services move freely
across countries.
4. Technology spreads rapidly
between nations.
5. MNCs play a major role in
connecting economies.
6. It creates a global market for
producers and consumers.
2. Explain the main features of Multinational Corporations (MNCs).
1. MNCs own or control production
in more than one country.
2. They set up factories and offices
worldwide.
3. They invest large amounts of
capital.
4. They use advanced technology.
5. They operate on a global
scale.
6. Their main objective is to
maximise profits.
3. Why do MNCs set up production in different countries?
1. To obtain cheap labour.
2. To access raw materials
easily.
3. To reduce production costs.
4. To reach large markets.
5. To benefit from favourable
government policies.
6. To increase profits through
global production.
4. Explain the various ways in which MNCs spread production across
countries.
1. By establishing factories and
offices abroad.
2. By buying local companies.
3. By forming joint ventures with
local firms.
4. By placing orders with small
producers.
5. By supplying technology and
finance.
6. By controlling production
networks globally.
5. Explain the importance of foreign trade.
1. It provides larger markets to
producers.
2. It increases choices for
consumers.
3. It promotes competition among
producers.
4. It improves product quality.
5. It helps countries earn
foreign exchange.
6. It leads to integration of
markets.
6. How does foreign trade lead to integration of markets?
1. Goods move across national
boundaries.
2. Consumers get access to
imported products.
3. Producers compete in
international markets.
4. Similar goods become available
in different countries.
5. Prices become more competitive.
6. Markets of different countries
become interconnected.
7. Explain the role of MNCs in the globalisation process.
1. MNCs invest in different
countries.
2. They increase foreign trade.
3. They transfer technology
globally.
4. They organise production
across countries.
5. They create employment
opportunities.
6. They connect markets and
economies worldwide.
8. Explain how technology has helped globalisation.
1. Transportation has become
faster and cheaper.
2. Communication has improved
significantly.
3. Internet enables instant information
exchange.
4. E-banking allows quick money
transfers.
5. Production can be coordinated
globally.
6. International trade has
increased rapidly.
9. Explain the role of information and communication technology in
globalisation.
1. It enables instant
communication across countries.
2. It supports outsourcing of
services.
3. It allows online transfer of
information.
4. It helps businesses coordinate
production globally.
5. It reduces communication
costs.
6. It promotes international
trade and services.
10. Explain liberalisation.
1. Liberalisation means removal
of trade restrictions.
2. It reduces government control
over trade.
3. It allows easier imports and
exports.
4. It encourages foreign
investment.
5. It promotes competition among
producers.
6. It supports globalisation.
11. Why did India adopt liberalisation policies in 1991?
1. To improve industrial
efficiency.
2. To increase competition.
3. To attract foreign investment.
4. To improve product quality.
5. To integrate with the global
economy.
6. To accelerate economic growth.
12. What are trade barriers? Explain their importance.
1. Trade barriers are
restrictions on foreign trade.
2. They include import duties and
quotas.
3. They protect domestic
industries.
4. They regulate imports and
exports.
5. They reduce excessive foreign
competition.
6. They support developing industries.
13. Explain the objectives and functions of WTO.
1. WTO promotes international
trade.
2. It encourages trade
liberalisation.
3. It establishes trade rules.
4. It resolves trade disputes.
5. It monitors trade agreements.
6. It promotes cooperation among
member countries.
14. Why do developing countries criticise WTO?
1. Developed countries continue
subsidies to farmers.
2. Rich countries retain certain
trade barriers.
3. Trade rules often favour
developed nations.
4. Developing countries face
unfair competition.
5. Agricultural products from
poor countries suffer.
6. Free trade is not always truly
fair.
15. Explain the positive impact of globalisation on consumers.
1. Greater variety of goods is
available.
2. Consumers enjoy better quality
products.
3. Prices have become more
competitive.
4. New technologies reach
consumers quickly.
5. Standards of living have
improved.
6. Consumers have wider choices
than before.
16. Explain the positive impact of globalisation on Indian industries.
1. Access to advanced technology.
2. Better production methods.
3. Increased foreign investment.
4. Greater export opportunities.
5. Improved productivity and
efficiency.
6. Stronger international
competitiveness.
17. Explain how globalisation has benefited the IT sector in India.
1. Growth of software exports.
2. Expansion of call centres.
3. Increased outsourcing
opportunities.
4. Creation of skilled jobs.
5. Growth of IT-enabled services.
6. Increase in foreign exchange
earnings.
18. Explain the importance of SEZs.
1. SEZs attract foreign
investment.
2. They provide world-class
infrastructure.
3. They encourage exports.
4. They create employment
opportunities.
5. Companies receive tax
benefits.
6. Industrial development is
promoted.
19. Why do governments try to attract foreign investment?
1. It brings capital into the
country.
2. It creates employment.
3. It introduces new technology.
4. It boosts industrial growth.
5. It increases exports.
6. It promotes economic
development.
20. Explain the problems faced by small producers due to globalisation.
1. Competition from imported
goods.
2. Declining market demand.
3. Falling profits.
4. Closure of production units.
5. Loss of employment.
6. Difficulty competing with
MNCs.
21. Explain the case of Ravi's capacitor business.
1. Ravi started a capacitor
manufacturing unit.
2. Imported capacitors entered
the market after liberalisation.
3. Imported products were
cheaper.
4. Demand for Ravi's products
declined.
5. Production fell significantly.
6. Workers lost jobs and profits
decreased.
22. Explain the impact of globalisation on workers.
1. Employment has become less
secure.
2. Temporary jobs have increased.
3. Workers often receive lower
benefits.
4. Working hours have increased.
5. Labour costs are reduced by
employers.
6. Workers do not always get fair
benefits.
23. Explain flexible employment policies.
1. Workers are hired temporarily.
2. Permanent jobs are reduced.
3. Employers can hire according
to demand.
4. Labour costs decrease.
5. Job security declines.
6. Workers lose employment
benefits.
24. Explain the condition of workers in the garment industry.
1. Workers often work long hours.
2. Many are employed temporarily.
3. Wages remain low.
4. Benefits are limited.
5. Job security is poor.
6. Workers face intense
competition.
25. Explain the positive effects of globalisation in India.
1. Increased foreign investment.
2. More employment opportunities.
3. Better quality products.
4. Greater consumer choice.
5. Growth of exports.
6. Expansion of service
industries.
26. Explain the negative effects of globalisation in India.
1. Small industries face
competition.
2. Some businesses shut down.
3. Workers face job insecurity.
4. Income inequality may
increase.
5. Temporary employment rises.
6. Benefits are not equally distributed.
27. What is fair globalisation?
1. Benefits should reach all
sections of society.
2. Workers' rights must be
protected.
3. Small producers should receive
support.
4. Trade rules should be fair.
5. Opportunities should be
equally available.
6. Economic growth should be
inclusive.
28. Explain the role of government in making globalisation fair.
1. Protect workers through labour
laws.
2. Support small producers.
3. Provide better infrastructure.
4. Ensure fair trade practices.
5. Negotiate effectively at WTO.
6. Promote inclusive economic
growth.
29. How can small producers compete better in the global market?
1. Access to modern technology.
2. Better roads and
infrastructure.
3. Availability of electricity
and water.
4. Easy access to credit.
5. Improved marketing facilities.
6. Government support and
training.
30. “The impact of globalisation has not been uniform.” Explain.
1. Consumers benefit through
greater choice and lower prices.
2. MNCs and large companies gain
profits.
3. Skilled workers get new
opportunities.
4. Small producers face severe
competition.
5. Many workers experience job
insecurity.
6. Therefore, benefits and losses
are not shared equally among all groups.
D.
Assertion and Reason Questions
Directions:
Choose the correct option.
A.
Both Assertion (A) and Reason (R) are true, and R is the correct explanation of
A.
B. Both Assertion (A) and Reason (R) are true, but R is not the correct
explanation of A.
C. Assertion (A) is true, but Reason (R) is false.
D. Assertion (A) is false, but Reason (R) is true.
1.
Assertion
(A): MNCs set up production units in different countries.
Reason
(R): They want to reduce production costs and increase
profits.
Answer: A
2.
Assertion
(A): Foreign trade leads to integration of markets.
Reason
(R): Foreign trade connects producers and consumers of
different countries.
Answer: A
3.
Assertion
(A): Globalisation has increased competition among
producers.
Reason
(R): Goods from different countries are available in the
same market.
Answer: A
4.
Assertion
(A): Information technology has accelerated globalisation.
Reason
(R): It enables instant communication and transfer of
information worldwide.
Answer: A
5.
Assertion
(A): Liberalisation means imposing more restrictions on
trade.
Reason
(R): Liberalisation encourages free movement of goods and
investments.
Answer: D
6.
Assertion
(A): WTO promotes international trade among countries.
Reason
(R): WTO establishes rules regarding international trade.
Answer: A
7.
Assertion
(A): Consumers in India have greater choices of goods
today.
Reason
(R): Globalisation has increased imports and foreign
investment.
Answer: A
8.
Assertion
(A): MNCs always establish new factories when entering a
country.
Reason
(R): Buying local companies is a common method used by
MNCs.
Answer: D
9.
Assertion
(A): Indian companies such as Tata Motors have expanded
globally.
Reason
(R): Globalisation has enabled some Indian companies to
become MNCs.
Answer: A
10.
Assertion
(A): Trade barriers restrict foreign trade.
Reason
(R): Taxes on imports increase the price of imported goods.
Answer: A
11.
Assertion
(A): Before 1991, India encouraged unrestricted imports.
Reason
(R): India wanted to protect domestic industries from
foreign competition.
Answer: D
12.
Assertion
(A): Small producers often face challenges due to
globalisation.
Reason
(R): They must compete with large MNCs and imported goods.
Answer: A
13.
Assertion
(A): Special Economic Zones (SEZs) are established to
attract investment.
Reason
(R): SEZs provide world-class infrastructure and tax
benefits.
Answer: A
14.
Assertion
(A): Globalisation has benefited all sections of society
equally.
Reason
(R): Small producers and workers often face losses due to
competition.
Answer: D
15.
Assertion
(A): Foreign investment can bring new technology into a
country.
Reason
(R): MNCs often introduce advanced production methods.
Answer: A
16.
Assertion
(A): Flexible employment increases job security for
workers.
Reason
(R): Workers are generally hired on a temporary basis under
flexible employment.
Answer: D
17.
Assertion
(A): The movement of people across countries has increased
as rapidly as trade.
Reason
(R): Many countries impose restrictions on migration.
Answer: D
18.
Assertion
(A): Improved transportation has supported globalisation.
Reason
(R): Faster and cheaper transport helps goods reach
international markets quickly.
Answer: A
19.
Assertion
(A): WTO rules are often criticised by developing
countries.
Reason
(R): Developed countries continue providing subsidies to their
farmers.
Answer: A
20.
Assertion
(A): Fair globalisation aims to ensure that benefits are
shared more equally.
Reason
(R): Governments should protect the interests of all
sections of society.
Answer: A
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