Class 10 Economics Chapter 4 | Easy Solution

In this post, we have provided the Globalisation and the Indian Economy Class 10 Economics Chapter 4 Questions and Answers to introduce you to clarify the important economic changes that globalisation has introduced. These solutions help students understand these topics and prepare for their exams.

Class 10 Economics Chapter 4 Questions and Answers

1: What do you understand by globalisation? Explain in your own words.
Answer: Globalization is a process of interaction and integration between people, companies, and governments in different countries. It is driven by international trade and investment and aided by information technology.
Under globalization countries which were hitherto closed to trade and foreign investment are opening up their economies and going global.
Under globalization, more and more goods and services, investments and technology are being moved between countries.
Apart from goods, services, investments and technology, there is also the movement of people who move from one country to another in search of better income, better jobs or better education.

2: What was the reason for putting barriers to foreign trade and foreign investment by the Indian government? Why did it wish to remove these barriers?

Answer: The government imposed restrictions on the import of goods to protect domestic producers from foreign competition because in the 1950s and 1960s, industries were being established and competition from imports would not have allowed these industries to grow. Therefore, the government allowed imports of only essential goods such as machinery, fertilizers and petroleum. These restrictions helped to build technological capacity within the country.

The government wanted to remove the barriers for the reasons given below:

India had acquired technological capability.

The government decided that the time had come for Indian producers to compete with producers across the world.

The government felt that competition would improve the performance of producers within the country as they would have to improve their quality.

There would be unrestricted exchange of capital, technology and experience between India and other countries of the world.

3. How will flexibility in labour laws help companies?
Answer: Flexibility in labour laws will help companies to become competitive and progressive. By relaxing labour laws, company heads can negotiate salaries and fire employees based on market conditions. This will increase the competitiveness of the company.

4. What are the various ways in which multinational companies set up or control production in other countries?
Answer: The multinational companies adopt the following ways of setting up or controlling production in other countries:

1. Multinational companies set up production based on
   Proximity of location to markets.
2. Availability of skilled and unskilled labour at low cost.
3. Availability of other factors of production like raw materials etc.
4. Favourable policies of the government.
5. After ensuring the above conditions, multinational companies set up factories and offices for production.
6. They purchase assets like land, buildings, machines and other equipment.
   
7. They set up production in collaboration with local companies.
8. They provide funds and the latest technology for production.
9. They buy local companies to expand production.

5. Why do developed countries want developing countries to liberalise their trade and investment? What do you think developing countries should demand in return?

Answer: Developed countries encourage developing countries to liberalise their trade and investment for several reasons:

1. To access new markets for their goods and services,
2. To expand investment
3. Enhance economic ties.

In return, developing countries may demand for
technology transfer, capacity building, fair trade terms, and infrastructure and institutional development assistance.

6. “The impact of globalisation has not been uniform.” Explain this statement.
Answer: Globalisation affects countries, regions and people differently.

1.It has improved the standard of living of people living in urban areas,
2.MNCs in developing countries like India have increased their investments in industries like cell phones, automobiles, electronics, soft drinks, etc.
3. Services like data entry, accounting, administrative work and engineering have also benefited from globalisation.
4. New jobs have been created in developing countries.
5. Some local companies supplying raw materials to MNCs have also benefited.
6. Globalisation has enabled some large companies like Tata Motors, and Infosys to emerge as multinationals.
7. Companies providing services in information and communication technology have also benefited from globalisation.

Question 7: How has liberalisation of trade and investment policies helped the globalisation process?

Answer: Liberalisation of trade and investment policies has played a vital role in facilitating the process of globalisation.
1. It has reduced barriers and restrictions on international trade and investment.

2.It has promoted cross-border economic integration.

3. It has increased market access.

4. It has encouraged global trade linkages.

Question 8: How does foreign trade lead to the integration of markets across countries? Explain with an example.

Answer: Foreign trade leads to the integration of markets of different countries it provides producers with an opportunity to reach beyond domestic markets. Producers can sell their products in the markets of their country as well as in other countries across the world. They can also compete in markets located in other countries of the world.

Buyers also have the option to choose between goods produced in different parts of the world. This enables the consumer to buy according to his requirements.

For example, AIG has set up a joint venture in the insurance sector and is selling its products in India.

Question 9: Globalisation will continue in the future. Can you imagine what the world would be like twenty years from now? Give reasons for your answer.

Answer: Globalization will continue in the future. Twenty years from now,

• The world will be more globally connected.
• The international economy will be integrated.
• Mobility of labour as well as trade and capital flows will increase.
• Liberalization will increase.
• Multinational companies will merge with other companies producing similar goods.

Question 10: Supposing you find two people arguing: One is saying globalisation has hurt our country’s development. The other is telling, globalisation is helping India develop. How would you respond to these organisations?

Answer: Both arguments have some truth as given below:

Globalization has helped the development of India e.g.

• Many multinational companies are investing in India in various sectors like insurance banking and food processing.
• These investments have benefited the people in many ways resulting in the development of the country.
• Now people have choices. They can buy anything they like, expensive or cheap.
• People are getting well-paid jobs.
• The standard of living of the people has increased.
• Many projects are being carried out with the help of foreign investment.

However, globalization has also harmed the development of the country e.g.

• Globalization has posed many challenges for a large number of small producers.
• Battery, capacitors, plastic toys, tyres, dairy products and vegetable oil industries have been badly affected due to competition.
• Many small units have closed down, leaving many workers unemployed.

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Read More: Development Class 10 Notes

FAQ | Class 10 Economics Chapter 4 Questions and Answers

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