CBSE Class 10 Economics Chapter 4 Globalisation and the Indian Economy MCQs
FAQs on CBSE Economics Globalisation and the Indian Economy Class 10 MCQ
1. What are the key factors that have enabled the process of globalisation according to the CBSE Class 10 syllabus?
The two most important factors that have enabled the globalisation process are:
- Technology: Rapid improvements in transportation technology have made the delivery of goods across long distances faster and cheaper. Crucially, advancements in information and communication technology (ICT), such as the internet and computers, allow for instant communication and the sharing of information across the globe, which is vital for managing international operations.
- Liberalisation of Trade and Investment: This involves removing government-set barriers or restrictions on foreign trade and investment. By liberalising policies, governments allow goods to be imported and exported easily and also encourage foreign companies to set up factories and offices in their country.
2. What is a Multinational Corporation (MNC) and what are the main ways it controls or spreads its production across different countries?
A Multinational Corporation (MNC) is a company that owns or controls production in more than one nation. For the Class 10 board exam, it's important to know the methods they use:
- Joint Ventures: They set up production jointly with a local company, which helps the MNC with market knowledge and the local company with technology and investment.
- Acquisitions: The most common route is to buy up local companies and then expand production. For example, Cargill Foods, an American MNC, bought Parakh Foods in India.
- Subcontracting: MNCs place large orders for production with small producers in developing countries. The products (like garments or footwear) are then sold under the MNC's own brand name.
- Direct Investment: Setting up wholly-owned subsidiaries, including factories and offices, in foreign countries.
3. While globalisation has benefits, what are some of its negative impacts on small producers and workers in India?
Globalisation has posed significant challenges for certain sections of the Indian economy. For exam purposes, focus on these two groups:
- Small Producers: Many small manufacturers have faced immense competition from cheaper imported goods. For instance, Indian toy companies were severely affected by competition from Chinese imports, leading to shutdowns and job losses. They often lack the technology and marketing scale to compete with large MNCs.
- Workers: To remain competitive, employers have become more flexible with hiring. This has led to a decrease in job security, as workers are often employed on a temporary basis without long-term benefits, especially in sectors like the garment industry.
4. What is the role of the World Trade Organisation (WTO) and why is it sometimes considered controversial?
The main purpose of the World Trade Organisation (WTO) is to liberalise international trade by establishing and enforcing rules for all member countries. However, its role is often seen as controversial because, in practice, developed countries have been accused of unfairly influencing the rules. For example, they have often pressured developing countries to open their markets to foreign goods while continuing to provide huge subsidies to their own farmers, creating an uneven playing field.
5. Why did the Indian government put barriers on foreign trade and investment after independence, and why were they removed in 1991?
This is a frequently asked question. After independence, the Indian government used trade barriers (like taxes on imports) to protect its domestic producers. The key reasons were:
- To Nurture Infant Industries: Indian industries were just starting to develop and could not compete with established foreign producers. The barriers gave them a chance to grow.
- To Promote Self-Reliance: The focus was on producing goods within the country rather than importing them.
These barriers were largely removed starting around 1991 because it was felt that Indian producers were ready to compete globally. This policy of liberalisation was intended to improve the quality of domestic goods and boost economic growth by integrating with the world economy.
6. What are some expected 3-mark or 5-mark important questions for the CBSE 2025-26 board exam from the chapter 'Globalisation and the Indian Economy'?
For the 2025-26 board exams, some high-probability important questions based on the CBSE pattern are:
- (3-mark) Differentiate between foreign trade and foreign investment.
- (3-mark) How does technology stimulate the globalisation process? Explain with examples.
- (5-mark) “The impact of globalisation has not been uniform.” Explain this statement with examples from the Indian context, covering both positive and negative effects.
- (5-mark) Explain five ways in which Multinational Corporations (MNCs) have spread their production and interlinked countries.
7. How has foreign trade led to the integration of markets across countries? Explain with an example.
Foreign trade creates an opportunity for producers to reach beyond domestic markets. It leads to the integration of markets in the following ways:
- Choice for Buyers: Imports provide buyers with a wider variety of goods. For instance, a consumer in India can choose between a locally made car and a Japanese or German one.
- Competition among Producers: Producers in different countries now have to compete with each other. A Chinese toy maker competes with an Indian one, forcing both to improve quality or lower prices. This convergence of prices for similar goods in different markets is a key aspect of market integration.
Essentially, foreign trade connects markets by creating a common space for competition and consumption.
8. What is meant by “fair globalisation” and what role can the government play in achieving it?
“Fair globalisation” refers to a vision of globalisation that creates opportunities for all and ensures that its benefits are distributed more equitably among all countries and people. It seeks to mitigate the negative impacts on vulnerable populations. The government can play a crucial role in achieving this by:
- Protecting Workers' Rights: Ensuring that labour laws are properly implemented and workers get their rights.
- Supporting Small Producers: Providing support to small, local producers to improve their performance and competitiveness until they are strong enough to compete globally.
- Negotiating at the WTO: Using its influence in international bodies like the WTO to advocate for fairer rules for developing countries.
