4.3 ADDITIONAL QUESTIONS :
Answer the following in one sentences :
1. What is called investment ?
Ans: The money spent to buy assets like land , building , machines etc is called investment .
2. What is called foreign investment ?
Ans: Investment made by MNC’s is called foreign investment .
3. What is MNC (Multi-National Companies) ?
Ans: MNC is a company that owns or controls production in more than one nation .
4. What is globalisation ?
Ans: Globalisation is the process of rapid integration or interconnection between the countries .
5. What is Liberalisation ?
Ans: Liberalisation means to rid industry and trade of unnecessary restrictions and make them more competitive .
6. What is investment ?
Ans: The money spent to buy assets such as land , building , machines and other equipment is called investment .
7. What is the result of greater foreign investment ?
Ans: It has resulted in greater integration of production and markets across countries .
8. Give one example of trade barrier .
Ans: Tax on imports .
9. What is the aim of World Trade Organisation (WTO) ?
Ans: The aim of World Trade Organisation is to liberalise international trade .
Answer the following questions in two to three sentences :
1. How are the local companies benefited by joint production with MNC’s ?
Ans:
i) MNC’s can provide money for additional investments , like buying new machines for faster production .
ii) MNC’s might bring with them the latest technology for production .
2. How can the government play a major role in making globalisation more fair ?
Ans:
i) The government can ensure that labour laws are properly implemented and the workers get their rights .
ii) It can support small producers to improve their performance till the time they become strong enough to compete .
iii) The government can use trade and investment barriers .
iv) The government can negotiate at the WTO for fairer rules .
3. What are the basic functions of foreign trade ?
Ans: The basic functions of the foreign trade are :
i) Foreign trade creates an opportunity for producers to reach beyond the domestic markets .
ii) It expands the choice of the buyers as the goods produced beyond the domestic market are available .
iii) It results in connecting the markets or integration of the markets in different countries .
4. How has improvement in technology stimulated the globalisation process ?
Ans:
i) Improvement in transportation technology has made faster delivery of goods across long distances possible at cheap rates .
ii) Technology in the telecommunications , computers , internet etc are used to contact one another around the world .
iii) Internet can be used to obtain and share information and to send e-mail and voice-mail .
5. What are the various ways in which MNC’s set up , or control production in other countries ?
Ans: There are various ways in which MNC set up or controls production :
i) The most common route for MNC investments is to buy up local companies and then to expand production .
ii) Sometimes MNC’s set up production jointly with some of the local companies .
iii) MNC’s place orders for production with small producers around the world . The products are supplied to the MNC’s which then sell these under their own brand names .
6. What is the impact of globalisation in India ? OR How is globalisation beneficial to some sections of the society ?
Ans:
i) There is greater choice before the consumers who enjoy improved quality and lower prices for several products .
ii) Globalisation has enabled some large Indian companies to emerge as multinationals themselves . E.g. Tata Motors .
iii) Local companies supplying raw materials to the industries started by the MNC’s have prospered .
7. Why did the Indian government put barriers to foreign trade and foreign investments after independence ?
Ans:
i) After independence , industries were just coming up and competition from imports at that stage would not have allowed these industries to expand .
ii) It was considered necessary to protect the producers within the country from foreign competition .
8. How has the development in IT helped globalisation ?
Ans:
i) Telecommunication facilities like telegraph , telephone , mobile phones and so on are used to contact people around the world .
ii) Satellite communication has brought about a revolution in the IT sector .
iii) Internet allows us to send e-mail or voice mail across the world at negligible cost .
iv) By using internet we can obtain and share information .
9. What are the effects of globalisation ?
Ans:
i) More and more goods and services , investments and technology are moving between countries .
ii) Most regions of the world are now in closer contact with each other than a few decades back .
10. ‘WTO is unsuccessful in implementing free and fair trade’ . Explain why ?
Ans:
i) Developed countries have unfairly retained trade barriers .
ii) WTO rules have forced the developing countries to remove trade barriers .