Globalisation and the Indian Economy Class 10 MCQ Questions With Answers
Question 1.
Read the given statements in context of ‘globalization’ and choose the correct option:
(A) It is the only way for economic development of the country
(B) Interlinks only production based activities in dispersed locations in the world
(C) It has always given only positive results in all the countries
(D) Leads to spread of technology, cultures and diseases from one region to another
Answer:
(D) Leads to spread of technology, cultures and diseases from one region to another
Explanation:
Due to intermingling of people from different parts of the world, not only does the spread of technology takes place but it also leads to the intermixing of culture and spread of diseases to various parts of the world.
Question 2.
What is foreign investment?
(A) Investment made by the foreign governments
(B) Investment made by the foreign banks
(C) Investment made by the MNCs
(D) Investment made by the IMF and World Bank
Answer:
(C) Investment made by the MNCs
Question 3.
An organization whose aim is to liberate international trade is
(A) World Bank
(B) International Monetary Fund (IMF)
(C) World Trade Organisation (WTO)
(D) United Nations Organisation (UNO)
Answer:
(C) World Trade Organisation (WTO)
Explanation:
The World Trade Organization provides a common platform to negotiate trade agreements among member countries and to resolve any trade disputes.
Question 4.
What is the idea behind the development of Special Economic Zones (SEZs) in India?
(A) To boost Indian industries
(B) To solve the problem of unemployment
(C) To produce handicrafts
(D) To attract foreign investment
Answer:
(D) To attract foreign investment
Question 5.
Removing barriers or restrictions set by the government is known as
(A) Privatisation
(B) Liberalisation
(C) Globalisation
(B) Industrialisation
Answer:
(B) Industrialisation
Question 6.
When and where did the Ford Motors set up their large plant in India?
(A) In 1975 at Chennai
(B) In 1985 at Chennai
(C) In 1995 at Chennai
(D) In 2005 at Chennai
Answer:
(C) In 1995 at Chennai
Question 7.
| Column A | Column B |
| (i) MNCs buy at cheap rates from small producers | (A) Automobiles |
| (ii) Quotas and taxes on imports are used to regulate trade | (B) Garments, foot-wear,sports items |
| (iii) Indian companies who have invested abroad | (C) Tata Motors, In- fosys, Ranbaxy |
| (iv) Several MNCs have invested in setting up factories in India for production | (D) Trade barriers |
(A) (i)-(A),(ii)-(B),(iii)-(C),(iv)-(D)
(B) (i)-(B),(ii)-(C),(iii)-(A),(iv)-(D)
(C) (i)-(B),(ii)-(D),(iii)-(C),(iV)-(A)
(D) (i)-(A),(ii)-(C),(iii)-(D),(iv)-(B)
Answer:
(C) (i)-(B),(ii)-(D),(iii)-(C),(iV)-(A)
Explanation:
MNCs buy garments, footwear, sports items at cheap rales from small producers. because it reduces Lheir cost of production and using their brand value they sell them lhigh prices and earn profits. Quotas and taxes on imports are used to regulate trade items received through import.
Question 8.
| Column A | Column B |
| (i) Tata Motors | (A) Nuts and Bolts |
| (ii) Asian Paints | (B) IT |
| (iii) Infosys | (C) Automobiles |
| (iv) Sundaram Fasten-ers | (D) Paints |
(A) (i)-(C), (ii)-(D), (iii)-(B), (iv)-(A)
(B) (i)-(A), (ii)-(C), (iii)-(D), (iv)-(B)
(C) (i) -(D), (ii) -(A), (iii)-(C), (iv)-(B)
(D) (i)-(C), (ii)-(B), (iii)-(A), (iv)-(D)
Answer:
(A) (i)-(C), (ii)-(D), (iii)-(B), (iv)-(A)
Question 9.
Arrange the following in the correct Sequence:
(i) Meanwhile, the company’s customer care is carried out through call centres located in India.
(ii) And then has the components manufactured in China.
(iii) A large MNC, Producing industrial equipment, designs its products in research centres in the United States.
(iv) These are then shipped to Mexico and Eastern Europe where the products are assembled and the finished products are sold all over the world.
Options:
(A) (iv) – (iii) – (ii) – (i)
(B) (i) – (ii) – (iii) – (iv)
(C) (ii) – (iii) – (i) – (iv)
(D) (iii) – (ii) – (iv) – (i)
Answer:
(D) (iii) – (ii) – (iv) – (i)
Explanation:
The manufacturing process of industrial equipment begins with designing, manufacturing of components, assembling of the machine and then selling the finished product.
Question 10.
Arrange the following in the correct Sequence:
(i) A news magazine published for London readers is to be designed and printed in Delhi.
(ii) The designing is done on a Computer. After printing the magazines are sent by air to London.
(iii) The payment of money for designing and printing from a bank in London to a bank in Delhi is done instantly through the Internet (E-banking)
(iv) The text of the magazines is sent through is sent through Internet to the Delhi office The designers in Delhi office get orders on how to design the magazine from the office in London using telecommunication facilities.
Options:
(A) (iii) – (iv) – (i) – (ii)
(B) (i) – (iv) – (ii) – (iii)
(C) (iv) – (i) – (ii) – (iii)
(D) (ii) – (iv) – (iii) – (i)
Answer:
(B) (i) – (iv) – (ii) – (iii)
Explanation:
lechnological advancements have reduced the costs of transportation and communication across nations and thereby facilitate global sourcing of raw materials and other inputs. the technological advancement has helped a lot in creation and growth of a global market.
Question 11.
Analyze the information given below, considering one of the following correct options:
Though WTO is supposed to allow free trade for all, in practice, it is seen that the developed countries have unfairly retained trade barriers. On the other hand, WTO rules have forced the developing countries to remove trade barriers. An example of this is the current debate on trade in agricultural products.
(A) Trade and Commerce
(B) Agricultural products
(C) Trade barriers
(D) World Trade Organization
Answer:
(D) World Trade Organization
Question 12.
Analyze the information given below, considering one of the following correct options:
A news magazine published for London readers is to be designed and printed in Delhi. The text of the magazine is sent through Internet to the Delhi office. The designers in the Delhi office get orders on how to design the magazine from the office in London using telecommunication facilities. The designing is done on a computer. After printing, the magazines are sent by air to London. Even the payment of money for designing and printing from a bank in London to a bank in Delhi is done
(A) Fair globalisation would create opportunities for all.
(B) MNCs are playing a major role in the globalisation process.
(C) Globalisation has led to improvement in living conditions of all the people.
(D) MNCs have increased their investment in India over the past 20 years.
Answer:
(C) Globalisation has led to improvement in living conditions of all the people.
Explanation:
Globalization has led to improvement in living condition of educated, skilled and wealthy people as now they have access to the best facilities available across the globe.
Question 13.
Find the incorrect option from the following:
(A) Fair globalisation would create opportunities for all.
(B) MNCs are playing a major role in the globalisation process.
(C) Globalisation has led to improvement in living conditions of all the people.
(D) MNCs have increased their investment in India over the past 20 years.
Answer:
(C) Globalisation has led to improvement in living conditions of all the people.
Explanation:
Globalization has led to improve¬ment in living condition of educated, skilled and wealthy people as now they have access to the best facilities available across the globe.
Question 14.
Find the incorrect option from the following:
(A) MNCs play an important role in the liberalization process.
(B) MNCs control production in more than one instantly through the Internet (e-banking)
(C) MNCs compete with the local producers directly.
(D) MNCs set up their production units close to market.
Answer:
(A) MNCs play an important role in the liberalization process.
Explanation:
MNCs is not only selling its finished products globally, but more important, the goods and services are produced globally. The production process is divided into small parts and spread out across the global. Due to MNCs more and more technology, services, goods etc. are moving between countries.
Assertion and Reason Based MCQs
Directions: In the following questions, A statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as.
(A) Both A and R are true and R is the correct explanation of A.
(B) Both A and R are true but R is NOT the correct explanation of A.
(C) A is true but R is false.
(D) A is false and R is true.
Question 1.
Assertion (A): The Indian government, after independence, had put barriers to foreign trade and foreign investment.
Reason (R): The government considered it necessary to protect the producers within the country from foreign competition.
Answer:
(A) Both A and R are true and R is the correct explanation of A.
Question 2.
Assertion (A): The car manufacturing plant of Maruti Udyog Ltd in India produces cars for Indian markets.
Reason (R): It also exports cars to other developing countries and exports car components for its many factories around the world.
Answer:
(C) A is true but R is false.
Explanation:
It was established with the objectives of producing indigenous utility cars for the growing needs of the Indian population.
Question 3.
Assertion (A): Global production has a complex structure.
Reason (R): Production of one good may take place in different parts of the world. For instance, an equipment may be formed by combining components produced in different countries.
Answer:
(A) Both A and R are true and R is the correct explanation of A.
Explanation:
Globalization leads to connectivity of different countries and goods and services can be transported across the world. Goods, components produced in different parts of the world can be used for production in any country.
Question 4.
Assertion (A): Local businesses may set up joint production process with MNCs and earn higher profits.
Reason (R): MNCs can provide money for additional investments, like buying new machines for faster production.
Answer:
(A) Both A and R are true and R is the correct explanation of A.
Explanation:
At times, MNCs set up production jointly with some of the local companies of the host countries. The benefit to the local company from such joint production is two-fold as MNCs can provide for additional investments and can bring in newer technology of production that result in fast-paced production.
Question 5.
Assertion (A): MNCs can exert a strong influence on production at distant locations.
Reason (R): MNCs set up partnerships with local companies, use local companies for supplies, compete with the local companies or buy them up.
Answer:
(A) Both A and R are true and R is the correct explanation of A.
Explanation:
By setting up partnerships with local companies, by using the local companies for supplies, by closely competing with the local companies or buying them up, MNCs are exerting a strong influence on production at distant locations. As a result, production in widely dispersed locations is getting interlinked.
Question 6.
Assertion (A): Foreign trade creates an opportunity for the producers to reach beyond the domestic markets.
Reason (R): Foreign trade expands the choice of goods beyond what is domestically produced.
Answer:
(B) Both A and R are true but R is NOT the correct explanation of A.
Explanation:
Foreign trade creates an opportunity for the producers to reach beyond the domestic markets and thus expands the choices available for consumers.
Case-Based MCQs
I. Read the source given below and answer the questions that follows:
India has become a second home to many multinationals’ over the years. MNCs set up offices and factories for production in regions where they can get cheap labour and other resources. This is done so that the cost of production is low and the MNCs can earn greater profits. MNCs set up production where it is close to the markets; where there is skilled and unskilled labour available at low costs; and where the availability of other factors of production is assured. But the most common route for MNC investments is to buy up local companies and then to expand production.
MNCs with huge wealth can quite easily do so. To take an example, Cargill Foods, a very large American MNC, has bought over smaller Indian companies such as Parakh Foods. Parakh Foods had built a large marketing network in various parts of India, where its brand was well-reputed. Also, Parakh Foods had four oil refineries, whose control has now shifted to Cargill.
Cargill is now the largest producer of edible oil in India, with a capacity to make 5 million pouches daily. Large MNCs in developed countries place orders for production with small producers. Garments, footwear, sports items are examples of industries where production is carried out by a large number of small producers around the world. The products are supplied to the MNCs, which then sell these under their own brand names to the customers. These large MNCs have tremendous power to determine price, quality, delivery, and labour conditions for these distant producers. Ford Motors, an American company, is one of the world’s largest automobile manufacturers with production spread over 26 countries of the world. Ford Motors came to India in 1995 and spent Rs. 1700 crore to set up a large plant near Chennai. This was done in collaboration with Mahindra and Mahindra, a major Indian manufacturer of jeeps and trucks.
Answer the following MCQs by choosing the most appropriate option
Question 1.
In which regions MNCs set up offices and factories for production?
(A) Close to the market.
(B) Availability of skilled/unskilled labour at low cost.
(C) Favourable government policies.
(D) All of the above
Answer:
(D) All of the above
Explanation:
MNCs set up their offices and factories in those regions where they get cheap labour and other resources because they bring down the cost of production and ensure more profits for themselves.
Question 2.
Ford Motors entered the Indian automobile business in collaboration with which Indian manufacturer?
(A) Mahindra and Mahindra
(B) Tata Motors
(C) Maruti Suzuki
(D) None of the above
Answer:
(A) Mahindra and Mahindra
Question 3.
Investment made by MNCs is called
(A) Investment
(B) Foreign trade
(C) Foreign investment
(D) Foreign direct investment
Answer:
(C) Foreign investment
Explanation:
Foreign investment refers to the investment in domestic companies and assets of another country by a foreign investor.
Question 4.
MNCs do not increase
(A) Competition
(B) Price war
(C) Quality
(D) None of the above
Answer:
(D) None of the above
II. Read the extract given below and answer the questions that follows:
Globalization expands and accelerates the movement and exchange of ideas and commodities over vast distances. Globalisation has created more competitive environment in India. In the past two to three decades, more and more MNCs have been looking for locations around the world which would be cheap for their production. Foreign investment by MNCs in these countries has been rising. At the same time, foreign trade between countries has been rising rapidly. A large part of the foreign trade is also controlled by MNCs. The result of greater foreign investment and greater foreign trade has been greater integration of production and markets across countries. Globalisation is this process of rapid integration or interconnection between countries. MNCs are playing a major role in the globalisation process.
More and more goods and services, investments and technology are moving between countries. Besides the movements of goods, services, investments and technology, there is one more way in which the countries can be connected. This is through the movement of people between countries. People usually move from one country to another in search of better income, better jobs or better education. Rapid improvement in technology has been one major factor that has stimulated the Globalisation process. Even more remarkable have been the developments in information and communication technology. Globalisation and greater competition among producers both local and foreign producers – has been of advantage to consumers, particularly the well-off sections in the urban areas. There is greater choice before these consumers who now enjoy improved quality and lower prices for several products. As a result, these people today, enjoy much higher standards of living than was possible earlier. Globalisation has also created new opportunities for companies providing services, particularly those involving IT.
Answer the following MCQs by choosing the most appropriate option
Question 1.
Process of integration of different countries is called
(A) Liberalization
(B) Privatization
(C) Globalization
(D) None of the above
Answer:
(C) Globalization
Explanation:
Globalisation is the process of rapid integration. It integrates the country with other economies of the world through trade, capital flow and technology.
Question 2.
Globalisation has led to higher standards of living of:
(A) Well-off consumers
(B) Poor consumers
(C) Big producers
(D) None of the above
Answer:
(A) Well-off consumers
Explanation:
There is greater choice before these consumers who now enjoy improved quality and lower prices for several products.
Question 3.
Globalisation has created new opportunities of:
(A) Employment
(B) Emerging multinationals
(C) Providing services
(D) All of the above
Answer:
(D) All of the above
Question 4.
Globalisation has posed major challenges for:
(A) Big Producers
(B) Small Producers
(C) Rural Poor
(D) None of these
Answer:
(B) Small Producers
Explanation:
Globalization has posed a major challenge to the small scale producers having low capital investment and poor strategies to develop. They have been hit hard due to severe competition. Several units have been shut down rendering many workers jobless.
III. Read the extract given below and answer the questions that follows:
In the last twenty years, globalisation of the Indian economy has come a long way. What has been its effect on the lives of people? Let us look at some of the evidence. Globalisation and greater competition among producers – both local and foreign producers – has been of advantage to consumers, particularly the well-off sections in the urban areas. There is greater choice before these consumers who now enjoy improved quality and lower prices for several products. As a result, these people today, enjoy much higher standards of living than was possible earlier. Among producers and workers, the impact of globalisation has not been uniform. Firstly, MNCs have increased their investments in India over the past 20 years, which means investing in India has been beneficial for them. MNCs have been interested in industries such as cell phones, auto mobiles, electronics, soft drinks, fast food orservices such as banking in urban areas.
These products have a large number of well-off buyers. In these industries and services, new jobs have been created. Also, local companies supplying raw materials, etc. to these industries have prospered. Secondly, several of the top Indian companies have been able to benefit from the increased competition. They have invested in newer technology and production methods and raised their production standards. Some have gained from successful collaborations with foreign companies.
Moreover, globalisation has enabled some large Indian companies to emerge as multinationals themselves! Tata Motors (automobiles), Infosys(IT), Ranbaxy (medicines), Asian Paints (paints), Sundaram Fasteners (nuts and bolts) are some Indian companies which are spreading their operations worldwide. Globalisation has also created new opportunities for companies providing services, particularly those involving IT. The Indian company producing a magazine for the London based company and call centres are some examples. Besides, a host of services such as data entry, accounting, administrative tasks, engineering are now being done cheaply in countries such as India and are exported to the developed countries.
Answer the following MCQs by choosing the most appropriate option
Question 1.
Why have MNCs have increased their investments in India over the past 20 years?
(A) To attract costumers
(B) To evade taxes
(C) To make use of the market potential
(D) To do social service
Answer:
(C) To make use of the market potential
Explanation:
India’s market potential, skilled workforce and political stability are the three key reasons that make India a favoured MNC destination.
Question 2.
Why do people have a preference for foreign products?
(A) They think foreign products are of better quality.
(B) They think it will improve their social status.
(C) They think the product is much cheaper than Indian product.
(D) None of the Above.
Answer:
(A) They think foreign products are of better quality.
Explanation:
Various companies and brands make similar products and this has made the consumer very confused. But people prefer to buy foreign products thinking that it is of better quality.
Question 3.
How several of the top Indian companies have been able to benefit from the increased competition?
(A) They have invested in newer technology
(B) They have no rivals in the market
(C) They get to travel the world
(D) They can work in isolation
Answer:
(A) They have invested in newer technology
Explanation:
Investment in newer technology has helped in increasing the efficiency of the companies.
Question 4.
Globalisation has been advantageous to :
(A) Consumers
(B) Producers
(C) Consumers and producers
(D) Limited sector of the society
Answer:
(C) Consumers and producers
Explanation:
Consumers now enjoy numerous choices as well as better quality since it is now an international market. Many domestic companies have improved technology and production methods due to competition from MNCs.