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Globalisation and the Indian Economy · Class 10 Economics: 139 MCQs with answers

All 139 multiple-choice questions from this kit, free and with no sign-up.

Full kit · everything Flashcards · 78 Quick Revision · 46

Warm-up · 36 questions

Q1. Which statement best describes globalisation as explained in the chapter?

Beginner
A The closing of borders to foreign goods and firms B The rapid integration or interconnection between countries C The growth of farming within a single country D The printing of a common currency for all countries
Show answer & explanation

The rapid integration or interconnection between countries

The chapter's definition.

Q2. A Korean electronics company owns factories in India, Vietnam and Mexico. What kind of company is it?

Beginner
A A cooperative society B A self-help group C A small-scale unit D A multinational corporation
Show answer & explanation

A multinational corporation

It controls production in more than one nation.

Q3. A Japanese car company spends Rs 2,000 crore on land, buildings and machines for a plant in Gujarat. What is this spending called?

Beginner
A Foreign trade B Foreign investment C A trade barrier D A quota
Show answer & explanation

Foreign investment

Investment made by an MNC.

Q4. What has been the combined result of greater foreign investment and greater foreign trade?

Beginner
A Greater integration of production and markets across countries B Complete separation of national economies C An end to all competition between producers D A fall in the number of MNCs
Show answer & explanation

Greater integration of production and markets across countries

That integration is globalisation.

Q5. Globalisation, by connecting countries, shall result in:

Beginner
A lesser competition among producers B no change in competition among producers C an end to all trade D greater competition among producers
Show answer & explanation

greater competition among producers

The chapter's own question.

Q6. Why do people usually move from one country to another, according to the chapter?

Beginner
A Only to go on holiday for a few weeks B In search of better income, better jobs or better education C Because governments force everyone to move D To avoid paying for goods in their own country
Show answer & explanation

In search of better income, better jobs or better education

Economic and educational reasons.

Q7. Which pair shows two different ways in which countries are linked?

Beginner
A Flow of rainfall and movement of rivers B Growth of forests and spread of deserts C Village fairs and local festivals D Flow of technology and movement of people
Show answer & explanation

Flow of technology and movement of people

Two of the five links.

Q8. Which of these is NOT a way in which countries are linked, according to the chapter?

Beginner
A Movement of mountains B Movement of goods C Movement of investments D Movement of technology
Show answer & explanation

Movement of mountains

The five links are goods, services, investments, technology, people.

Q9. Why is investment made by MNCs?

Beginner
A To give the assets away free B To reduce their own profits C Because the law requires every company to invest abroad D With the hope that the assets will earn profits
Show answer & explanation

With the hope that the assets will earn profits

Any investment seeks profit.

Q10. What do you understand by globalisation? Explain in your own words.

Beginner
Show answer & explanation

—

Q11. What are the various ways in which countries can be linked?

Beginner
Show answer & explanation

—

Q12. Distinguish between foreign trade and foreign investment.

Beginner
Show answer & explanation

—

Q13. Explain the various ways in which countries are linked in the process of globalisation.

Beginner
Show answer & explanation

—

Any five points, 1 mark each. 1 mark — goods. 1 mark — services. 1 mark — investments. 1 mark — technology. 1 mark — people and reasons. 1 mark — restrictions on people. Or any other relevant point.

Q14. A textile exporter in Tiruppur packs shirts into a sealed container that travels by truck, then ship, then train to a store in Germany without being unpacked. Which technology is this?

Beginner
A Satellite communication B E-banking C Barter D Containerised transport
Show answer & explanation

Containerised transport

Containers are loaded intact across modes of transport.

Q15. Which set of items does the chapter list as telecommunication facilities?

Beginner
A Containers, ships and trucks B Tractors, pumpsets and harvesters C Telegraph, telephone including mobile phones, and fax D Cheques, currency and deposits
Show answer & explanation

Telegraph, telephone including mobile phones, and fax

Communication devices.

Q16. A student in Assam e-mails a question to a professor in Japan and gets a reply the same day, at almost no cost. Which technology makes this possible?

Beginner
A Containers B Air cargo C Railways D The Internet
Show answer & explanation

The Internet

Instant e-mail at negligible cost.

Q17. In the chapter's example of a London magazine made in Delhi, how is the text of the magazine sent to Delhi?

Beginner
A Through the Internet B By air mail in printed form C By ship in containers D By a courier on foot
Show answer & explanation

Through the Internet

Electronic transfer.

Q18. How is payment for the magazine made from London to Delhi in the chapter's example?

Beginner
A Instantly, bank to bank, through e-banking B In cash carried by the designers C By cheque posted by sea D Through barter of magazines for goods
Show answer & explanation

Instantly, bank to bank, through e-banking

E-banking over the Internet.

Q19. Which of these is NOT given in the chapter as an improvement in transportation technology?

Beginner
A Containers B Falling cost of air transport C Instant e-mail D Faster delivery over long distances
Show answer & explanation

Instant e-mail

E-mail is IT.

Q20. Which statement about computers does the chapter make?

Beginner
A Computers are used only in banks B Computers have slowed down trade C Computers are not linked to globalisation D Computers have now entered almost every field of activity
Show answer & explanation

Computers have now entered almost every field of activity

Computers are everywhere.

Q21. Which of the following best describes how technology has changed the cost of connecting countries?

Beginner
A It has made moving goods and information much cheaper and faster B It has made trade slower and costlier C It has had no effect on costs D It has made only people's travel cheaper
Show answer & explanation

It has made moving goods and information much cheaper and faster

Lower costs stimulate globalisation.

Q22. How has improvement in transportation technology helped globalisation?

Beginner
Show answer & explanation

—

Q23. Describe the developments in information and communication technology mentioned in the chapter.

Beginner
Show answer & explanation

—

Q24. What are containers, and why have they been important for foreign trade?

Beginner
Show answer & explanation

—

Q25. The Indian government puts a tax on imported toys. According to the chapter, what happens next?

Beginner
A Imported toys become cheaper and flood the Indian market B Indian toy-makers are forced to close down at once C Buyers pay less for all toys, whether imported or local D Imported toys become costlier, imports fall and Indian toy-makers prosper
Show answer & explanation

Imported toys become costlier, imports fall and Indian toy-makers prosper

The tax protects domestic producers.

Q26. Why is a tax on imports described as a trade 'barrier'?

Beginner
A It sets up a restriction on foreign trade B It builds a physical wall at the border C It helps foreign producers sell more D It is paid only by exporters
Show answer & explanation

It sets up a restriction on foreign trade

A barrier is a restriction.

Q27. The government allows only 10,000 imported motorcycles into the country in a year, however cheap they are. Which trade barrier is this?

Beginner
A A tax on imports B A subsidy C A quota D A trade fair
Show answer & explanation

A quota

A limit on quantity.

Q28. In the 1950s and 1960s, which goods did India allow to be imported?

Beginner
A All kinds of consumer goods without limit B Only essential items such as machinery, fertilisers and petroleum C Only luxury cars and electronics D No goods at all
Show answer & explanation

Only essential items such as machinery, fertilisers and petroleum

Essentials only.

Q29. Which of these was a result of removing barriers on foreign trade and investment in India?

Beginner
A Foreign companies could set up factories and offices in India B Imports of all goods were banned C Indian goods could no longer be exported D Only essential items could be imported
Show answer & explanation

Foreign companies could set up factories and offices in India

Investment opened up.

Q30. Which statement best defines liberalisation?

Beginner
A Removing barriers or restrictions set by the government B Adding new taxes on all imports C Nationalising all foreign companies D Banning exports to protect local buyers
Show answer & explanation

Removing barriers or restrictions set by the government

The chapter's definition.

Q31. Why is a government that has liberalised its trade policy said to be 'more liberal'?

Beginner
A It collects more taxes than before B It imposes far fewer restrictions than before C It controls every business directly D It has closed its borders
Show answer & explanation

It imposes far fewer restrictions than before

Fewer restrictions.

Q32. Which pair matches the right period with India's trade policy?

Beginner
A 1950s-60s: liberalisation; around 1991: protection B Both periods: complete free trade C 1950s-60s: protection; around 1991: liberalisation D Both periods: a total ban on imports
Show answer & explanation

1950s-60s: protection; around 1991: liberalisation

Protect first, liberalise later.

Q33. Which statement about the support for India's 1991 policy change is correct?

Beginner
A It was opposed by every international organisation B It was supported by powerful international organisations C It was decided only by village panchayats D It had no support from anyone
Show answer & explanation

It was supported by powerful international organisations

As the chapter states.

Q34. Which pair of items correctly completes the match: quotas and taxes on imports are used to ______?

Beginner
A Build roads B Pay workers' wages C Collect money from exporters abroad D Regulate trade, as trade barriers
Show answer & explanation

Regulate trade, as trade barriers

Exercise 12(ii).

Q35. What do you understand by liberalisation of foreign trade?

Beginner
Show answer & explanation

—

Q36. What is a trade barrier? Give two examples.

Beginner
Show answer & explanation

—

Building up · 77 questions

Q37. Why do MNCs usually set up factories in countries with low wages and plentiful resources?

Intermediate
A To pay the highest possible wages to all their workers B To avoid selling any goods in those countries C To keep the cost of production low and earn greater profits D To help governments collect more taxes from them
Show answer & explanation

To keep the cost of production low and earn greater profits

Cheap labour and resources cut costs.

Q38. Which of these is an example of foreign trade rather than foreign investment?

Intermediate
A An American firm building a factory in Pune B India buying crude oil from Saudi Arabia C A German company buying machines for its Indian plant D A Japanese company setting up an office in Delhi
Show answer & explanation

India buying crude oil from Saudi Arabia

Buying and selling goods across countries is trade.

Q39. Read the Assertion and Reason and choose the correct option. Assertion (A): Foreign investment by MNCs has been rising in the past two to three decades. Reason (R): A growing number of MNCs have been hunting for locations worldwide that are cheap for their production.

Intermediate
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 but R is true
Show answer & explanation

Both A and R are true, and R is the correct explanation of A

The search for cheap locations drives investment.

Q40. What has happened to foreign trade between countries in the past two to three decades, according to the chapter?

Intermediate
A It has fallen sharply as countries closed their borders B It has stayed at about the same level as before C It has been completely replaced by foreign investment D It has been rising rapidly, alongside rising foreign investment by MNCs
Show answer & explanation

It has been rising rapidly, alongside rising foreign investment by MNCs

Trade and investment have risen together.

Q41. Besides goods, what else do the activities of most MNCs involve substantial trade in?

Intermediate
A Services, such as work that MNCs carry out for customers in other countries B Only raw materials taken from colonies, as in the past C Only people moving from one country to another D Nothing at all, since MNCs only produce and never trade
Show answer & explanation

Services, such as work that MNCs carry out for customers in other countries

Most MNCs trade substantially in goods and also services.

Q42. The Indian plant of Ford Motors produced cars for India and also exported cars and car parts. What does this example show about MNCs?

Intermediate
A MNCs never sell goods in the countries where they produce B A large part of foreign trade is controlled by MNCs C MNCs deal only in services, never in goods D MNCs trade only within their home country
Show answer & explanation

A large part of foreign trade is controlled by MNCs

MNCs drive trade as well as investment.

Q43. The past decades of globalisation have seen rapid movements in:

Intermediate
A goods, services and investments between countries B goods, services and people between countries C goods, investments and people between countries D only people between countries
Show answer & explanation

goods, services and investments between countries

Movement of people has not increased much.

Q44. An Indian nurse wants to work in Europe but faces strict visa limits. Which point about globalisation does this illustrate?

Intermediate
A Goods cannot move between countries at all B Movement of people between countries has not increased much because of restrictions C Investment across borders is banned D Technology cannot cross borders
Show answer & explanation

Movement of people between countries has not increased much because of restrictions

People move the least.

Q45. Consider the following statements about globalisation. 1. It links countries through goods, services and investments. 2. MNCs play a major role in it. 3. It has made movement of people completely free. Which of the statements given above are correct?

Intermediate
A 1 and 2 only B 2 and 3 only C 1 and 3 only D 1, 2 and 3
Show answer & explanation

1 and 2 only

Movement of people is still restricted.

Q46. Read the Assertion and Reason and choose the correct option. Assertion (A): MNCs play a major role in the globalisation process. Reason (R): An MNC runs or part-owns production units sited in several countries at once.

Intermediate
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 but R is true
Show answer & explanation

Both A and R are true, but R is not the correct explanation of A

Both are true. The definition of an MNC does not explain the size of the part it plays in globalisation.

Q47. Which statement about technology and globalisation is correct, according to the chapter?

Intermediate
A Technology never crosses borders, so each country must invent everything itself B Technology is moving between countries more and more, along with goods, services and investments C Technology moves only when people move from one country to another D Technology is the only thing that moves between countries today
Show answer & explanation

Technology is moving between countries more and more, along with goods, services and investments

Technology is one of the growing links between countries.

Q48. A textile company from Bangladesh opens a factory in Tamil Nadu and exports shirts from there to Europe. Which two processes of globalisation are shown?

Intermediate
A Barter and quotas B Foreign investment and foreign trade C Import taxes and quotas D Movement of people and restrictions
Show answer & explanation

Foreign investment and foreign trade

Investment in the factory; trade in shirts.

Q49. An Indian software firm provides accounting services to a company in Canada over the Internet. Which link between countries is this?

Intermediate
A Movement of goods B Movement of people C Movement of services D Movement of investments
Show answer & explanation

Movement of services

A service crossing borders.

Q50. Consider the following statements about the past two to three decades. 1. More and more MNCs have looked for cheap locations for production. 2. A large part of foreign trade is controlled by MNCs. 3. Movement of people between countries has grown faster than movement of goods. Which of the statements given above are correct?

Intermediate
A 1 and 2 only B 2 and 3 only C 1 and 3 only D 1, 2 and 3
Show answer & explanation

1 and 2 only

Movement of people has not increased much because of restrictions.

Q51. Why does the chapter describe globalisation as a 'process' rather than a single event?

Intermediate
A Integration between countries keeps growing as foreign trade and foreign investment keep rising B It happened on one particular day in a single country C It has now stopped completely all over the world D It is a single law passed by one government
Show answer & explanation

Integration between countries keeps growing as foreign trade and foreign investment keep rising

Integration grows over time.

Q52. Which situation best shows 'integration of markets'?

Intermediate
A Shoes made in Vietnam, China and India compete on the same shelf in Delhi B A village sells only its own vegetables to itself C A country bans all imports D A factory closes during a holiday
Show answer & explanation

Shoes made in Vietnam, China and India compete on the same shelf in Delhi

Producers from many countries compete in one market.

Q53. Which change would most directly increase the integration of two countries' markets?

Intermediate
A Closing their shared border B Banning all foreign companies C Stopping the use of containers D Opening trade so that goods flow freely between them
Show answer & explanation

Opening trade so that goods flow freely between them

Trade links markets.

Q54. Why does globalisation increase competition for local producers?

Intermediate
A Local producers are no longer allowed to sell any of their goods B Foreign producers are forced to leave local markets C Goods from producers in other countries enter local markets and compete for the same buyers D Buyers stop purchasing goods altogether
Show answer & explanation

Goods from producers in other countries enter local markets and compete for the same buyers

Connected markets mean more rivals.

Q55. Which of these is the best example of 'movement of technology' between countries?

Intermediate
A An Indian family moving to Dubai B India importing bananas C A foreign company bringing new machines and production methods to its Indian partner D A student reading a local newspaper
Show answer & explanation

A foreign company bringing new machines and production methods to its Indian partner

Technology crossing borders.

Q56. Which of these is NOT an example of foreign investment?

Intermediate
A A British bank setting up branches in India B A Korean firm building a steel plant in Odisha C An American MNC buying machines for its Chennai plant D An Indian shop importing Chinese toys to sell
Show answer & explanation

An Indian shop importing Chinese toys to sell

Importing goods is trade.

Q57. What is the role of MNCs in the globalisation process?

Intermediate
Show answer & explanation

—

Q58. How does foreign trade lead to integration of markets across countries?

Intermediate
Show answer & explanation

—

Q59. Why does globalisation result in greater competition among producers?

Intermediate
Show answer & explanation

—

Q60. What is globalisation? Explain how foreign investment and foreign trade have brought it about.

Intermediate
Show answer & explanation

—

Any five points, 1 mark each. 1 mark — definition. 1 mark — MNCs and foreign investment. 1 mark — rising foreign investment. 1 mark — foreign trade integrating markets. 1 mark — MNC control of trade with example. 1 mark — integration and competition. Or any other relevant point.

Q61. Why have containers helped exports to grow?

Intermediate
A They make every product lighter in weight B They have cut port handling costs sharply and made delivery faster C They remove the need to pay any taxes on goods D They allow goods to be sent without any vehicle
Show answer & explanation

They have cut port handling costs sharply and made delivery faster

Lower costs and higher speed.

Q62. Kenyan flowers reach European shops within a day because air cargo has become cheaper. Which point from the chapter does this illustrate?

Intermediate
A Air transport has become more expensive over time B Falling air transport costs let airlines carry far greater volumes of goods C Only people, not goods, travel by air D Containers cannot be loaded onto planes
Show answer & explanation

Falling air transport costs let airlines carry far greater volumes of goods

Cheaper air transport.

Q63. Read the Assertion and Reason and choose the correct option. Assertion (A): Rapid improvement in technology has stimulated globalisation. Reason (R): Improvements in transport and in information technology have made moving goods and information slower and dearer.

Intermediate
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 but R is true
Show answer & explanation

A is true but R is false

They have made it faster and cheaper, which is what drove globalisation on. The assertion stands, the reason is false.

Q64. A health worker in a remote Himalayan village sends patient reports to a city hospital by mobile phone. Which development does this show?

Intermediate
A Containerised transport B Liberalisation of trade C Telecommunications allowing communication from remote areas D Movement of people across borders
Show answer & explanation

Telecommunications allowing communication from remote areas

Telecom reaches remote areas.

Q65. What role do satellite communication devices play, according to the chapter?

Intermediate
A They transport containers across oceans B They have helped telecommunication facilities connect the world and remote areas C They print magazines in Delhi D They collect import taxes
Show answer & explanation

They have helped telecommunication facilities connect the world and remote areas

Satellites support telecom.

Q66. In the magazine example, which two technologies carry the work between London and Delhi before printing?

Intermediate
A Containers for text and ships for instructions B Fax for payment and trucks for design C The Internet for text and telecommunication for design instructions D Railways for text and satellites for printing
Show answer & explanation

The Internet for text and telecommunication for design instructions

Information travels electronically.

Q67. Which step in the magazine example uses transportation technology rather than IT?

Intermediate
A Sending the text through the Internet B Giving design instructions by telephone C Sending the printed magazines to London by air D Paying through e-banking
Show answer & explanation

Sending the printed magazines to London by air

The finished goods travel physically.

Q68. What does the magazine example mainly show about IT and globalisation?

Intermediate
A IT can replace printing presses entirely B IT makes transport unnecessary for all goods C IT is useful only within one city D IT allows the production of services to be spread across countries
Show answer & explanation

IT allows the production of services to be spread across countries

Services produced in one country for another.

Q69. Consider the following statements about technology and globalisation. 1. Containers have reduced port handling costs. 2. The cost of air transport has fallen. 3. Telecommunication cannot reach remote areas. Which of the statements given above are correct?

Intermediate
A 1 and 2 only B 2 and 3 only C 1 and 3 only D 1, 2 and 3
Show answer & explanation

1 and 2 only

Telecom helps communicate from remote areas.

Q70. An American bank's customers phone a helpline answered by staff in Bengaluru. Which use of IT does this show?

Intermediate
A Movement of goods in containers B Spreading the production of services across countries C Liberalisation of import taxes D Movement of people for education
Show answer & explanation

Spreading the production of services across countries

Call centres serving customers abroad.

Q71. Which pair correctly matches a technology with its contribution to globalisation?

Intermediate
A Internet — cheaper sea freight B Containers — lower port handling costs C Fax — loading goods onto trucks D Air transport — instant e-mail
Show answer & explanation

Containers — lower port handling costs

Each technology does a different job.

Q72. A mango exporter in Maharashtra can now send fresh fruit to the Gulf in hours rather than weeks. Which change has made this possible?

Intermediate
A Faster, cheaper transportation, including air cargo B Higher import taxes in the Gulf C A ban on the use of containers D The end of telecommunication
Show answer & explanation

Faster, cheaper transportation, including air cargo

Transport technology.

Q73. Which of these activities is made possible mainly by computers and the Internet rather than by transport?

Intermediate
A An accountant in Kolkata keeping the books of a firm in Australia B A ship carrying cars from Chennai to South Africa C A truck carrying containers to a port D An airline flying vegetables to Dubai
Show answer & explanation

An accountant in Kolkata keeping the books of a firm in Australia

A service delivered electronically.

Q74. Which of these is the best reason why containers speed up exports?

Intermediate
A Goods need not be unloaded and reloaded when they change from ship to rail or truck B Containers make goods cheaper to produce in factories C Containers can travel only by air D Containers remove the need for ports
Show answer & explanation

Goods need not be unloaded and reloaded when they change from ship to rail or truck

Loaded intact across modes.

Q75. Consider the following statements about the Internet. 1. It lets people share information on almost anything. 2. It allows e-mail across the world at negligible cost. 3. It is used for voice-mail as well. Which of the statements given above are correct?

Intermediate
A 1 and 2 only B 2 and 3 only C 1 and 3 only D 1, 2 and 3
Show answer & explanation

1, 2 and 3

All three are in the chapter.

Q76. Which statement correctly compares the two kinds of technology discussed in the chapter?

Intermediate
A Transport technology moves information; IT moves heavy goods B Transport technology moves goods; IT moves information and helps spread services C Both only move people between countries D Neither has any role in globalisation
Show answer & explanation

Transport technology moves goods; IT moves information and helps spread services

Goods versus information.

Q77. A designer in Jaipur receives photographs of a client's shop in Paris, prepares a plan on her laptop and sends it back the same evening. Which link between countries is IT supporting here?

Intermediate
A Movement of goods by container B Movement of people C Movement of services D Movement of cattle
Show answer & explanation

Movement of services

A design service delivered electronically.

Q78. Before containers, goods were loaded and unloaded by hand at each stage of a journey. What was the main disadvantage?

Intermediate
A Goods travelled too fast B Ports had nothing to do C Transport was free D High handling costs and slow delivery
Show answer & explanation

High handling costs and slow delivery

What containers solved.

Q79. A small handicraft seller in Kutch uses a website to take orders from buyers in the USA and ships parcels by air. Which two technologies help her?

Intermediate
A Containers and satellite radio only B The Internet and cheaper air transport C Fax and railways only D Barter and cheques
Show answer & explanation

The Internet and cheaper air transport

IT for orders, transport for goods.

Q80. Which of these is the best evidence that IT has helped spread the production of services to India?

Intermediate
A Indian farmers growing more wheat B Call centres and design firms in India serving clients abroad C More trucks on Indian roads D Higher import taxes on computers
Show answer & explanation

Call centres and design firms in India serving clients abroad

Services exported through IT.

Q81. Explain with the chapter's example how IT spreads the production of services across countries.

Intermediate
Show answer & explanation

—

Q82. What links information technology with globalisation? Could globalisation have happened without the expansion of IT?

Intermediate
Show answer & explanation

—

Q83. Technology improving quickly is often named as a main driver of globalisation. Explain why.

Intermediate
Show answer & explanation

—

Any five points, 1 mark each. 1 mark — improved transport, faster and cheaper. 1 mark — containers. 1 mark — cheaper air transport. 1 mark — telecommunications and satellites. 1 mark — computers and Internet. 1 mark — IT spreading services with example. Or any other relevant point.

Q84. Explain the role of information and communication technology in the globalisation process, with the example given in the chapter.

Intermediate
Show answer & explanation

—

Any five points, 1 mark each. 1 mark — telecommunications. 1 mark — computers and Internet. 1 mark — spreading production of services. 1 mark — magazine example steps. 1 mark — e-banking. 1 mark — call centres or judgement on IT's necessity. Or any other relevant point.

Q85. Which statement correctly distinguishes a quota from an import tax?

Intermediate
A A quota limits the quantity imported; an import tax raises the price of imports B A quota raises the price; a tax limits the quantity C Both are payments that are made to foreign exporters D Both of them increase the total volume of imports
Show answer & explanation

A quota limits the quantity imported; an import tax raises the price of imports

Quantity versus price.

Q86. For what purpose do governments use trade barriers, according to the chapter?

Intermediate
A To stop their own producers from selling anything at home B To make imported goods cheaper for every buyer C To regulate foreign trade and decide what goods, and how much, come into the country D To abolish all taxes on domestic goods
Show answer & explanation

To regulate foreign trade and decide what goods, and how much, come into the country

Barriers regulate trade.

Q87. Read the Assertion and Reason and choose the correct option. Assertion (A): After Independence, India put barriers on foreign trade and foreign investment. Reason (R): Industries were just coming up, and competition from imports would not have let them grow.

Intermediate
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 but R is true
Show answer & explanation

Both A and R are true, and R is the correct explanation of A

Protection for young industries.

Q88. Why did the Indian government decide, around 1991, to remove barriers to foreign trade and investment?

Intermediate
A It wanted to stop Indian producers from exporting anything at all B It was ordered to do so by Indian farmers alone C It felt competition with global producers would improve the performance and quality of Indian producers D It wanted to reduce the number of goods available to buyers
Show answer & explanation

It felt competition with global producers would improve the performance and quality of Indian producers

Competition as a spur to quality.

Q89. After liberalisation, a clothing company decides on its own to import fabric from Italy and export shirts to Canada. Which feature of liberalisation does this show?

Intermediate
A Businesses can decide freely what to import or export B The government decides every import C Exports are banned D Only the government may trade abroad
Show answer & explanation

Businesses can decide freely what to import or export

Freedom of trade decisions.

Q90. Consider the following statements about India's policy. 1. After Independence it put barriers on foreign trade and investment. 2. From around 1991 these barriers were removed to a large extent. 3. The 1991 change was opposed by all international organisations. Which of the statements given above are correct?

Intermediate
A 1 and 2 only B 2 and 3 only C 1 and 3 only D 1, 2 and 3
Show answer & explanation

1 and 2 only

The change was supported by powerful international organisations.

Q91. What did loosening trade and investment policy do for globalisation?

Intermediate
A By raising taxes, it stopped trade between countries B By banning MNCs, it protected local firms C By removing barriers, it allowed foreign trade to grow and MNCs to invest across countries D It has had no link with globalisation
Show answer & explanation

By removing barriers, it allowed foreign trade to grow and MNCs to invest across countries

Exercise 7.

Q92. Read the Assertion and Reason and choose the correct option. Assertion (A): Liberalisation has helped the globalisation process. Reason (R): Liberalisation means adding more restrictions on imports and foreign investment.

Intermediate
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 but R is true
Show answer & explanation

A is true but R is false

Liberalisation removes restrictions.

Q93. Before 1991, a foreign electronics company wanting to open a factory in India would most likely have faced what?

Intermediate
A A welcome with no restrictions at all B Barriers on foreign investment that restricted its entry C A rule that it must export everything D A ban on buying any machinery
Show answer & explanation

Barriers on foreign investment that restricted its entry

Barriers applied to investment too.

Q94. Suppose the government puts a quota on Chinese toys. What is the most likely effect on Indian toy-makers?

Intermediate
A They face less competition, as only a limited number of Chinese toys can enter B They face more competition C They must stop making toys D They must pay the quota to China
Show answer & explanation

They face less competition, as only a limited number of Chinese toys can enter

A quota restricts competing imports.

Q95. Which of these best explains why protection made sense for Indian industry in the 1950s?

Intermediate
A Foreign goods were not available anywhere in the world B India had no need at all for any machinery C Indian industries were already the strongest in the world D New industries could not yet compete with established foreign producers
Show answer & explanation

New industries could not yet compete with established foreign producers

Young industries needed time to grow.

Q96. Consider the following statements about trade barriers. 1. A tax on imports is a trade barrier. 2. A quota is a trade barrier. 3. Trade barriers can be used to regulate foreign trade. Which of the statements given above are correct?

Intermediate
A 1 and 2 only B 2 and 3 only C 1 and 3 only D 1, 2 and 3
Show answer & explanation

1, 2 and 3

All three are true.

Q97. An Indian bicycle maker in 1995 suddenly faces cheaper imported bicycles in its market. Which policy change best explains this?

Intermediate
A New quotas on bicycle imports B Liberalisation of foreign trade after 1991 C A ban on all imports D Protection of Indian industry
Show answer & explanation

Liberalisation of foreign trade after 1991

Barriers removed, imports rose.

Q98. The chapter says the 1991 change aimed to make Indian producers 'improve their quality'. How was this expected to happen?

Intermediate
A The government would inspect every product B Facing competition from global producers would force them to improve C Imports would be banned D Producers would receive quality prizes
Show answer & explanation

Facing competition from global producers would force them to improve

Competition drives improvement.

Q99. Which of these is an example of liberalisation of foreign investment policy?

Intermediate
A Raising the import tax on cars B Allowing a foreign car company to set up a factory in India C Setting a quota on imported toys D Allowing only essential imports
Show answer & explanation

Allowing a foreign car company to set up a factory in India

Opening the door to foreign companies.

Q100. Which of these is NOT a reason the chapter gives for India's barriers after Independence?

Intermediate
A To protect domestic producers from foreign competition B To make imported goods cheaper for buyers C To let young industries come up D Because imports at that stage would have stopped new industries from growing
Show answer & explanation

To make imported goods cheaper for buyers

Barriers made imports costlier, not cheaper.

Q101. Read the Assertion and Reason and choose the correct option. Assertion (A): From around 1991, foreign companies could set up factories and offices in India. Reason (R): From around 1991 the government raised its barriers on foreign investment.

Intermediate
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 but R is true
Show answer & explanation

A is true but R is false

The barriers were largely removed in 1991, which is what let foreign companies set up here. The assertion holds, the reason is false.

Q102. An importer brings Chinese toys into India before and after a new import tax. What happens to the price Indian buyers pay?

Intermediate
A It falls, because the tax lowers costs B It rises, because the importer passes on the tax C It stays exactly the same D It becomes zero
Show answer & explanation

It rises, because the importer passes on the tax

Buyers pay a higher price.

Q103. Which change best describes India's move from protection to liberalisation?

Intermediate
A From free trade to a complete ban on trade B From exporting everything abroad to importing nothing at all C From private companies to production only by the government D From shielding producers with barriers to making them compete with global producers
Show answer & explanation

From shielding producers with barriers to making them compete with global producers

Protection gave way to competition.

Q104. What does it mean that the government 'imposes much fewer restrictions than before' after liberalisation?

Intermediate
A The government stops collecting any taxes of any kind B All laws on trade are abolished once and for all C Only foreign companies are now allowed to do business D Businesses face fewer rules on importing, exporting and foreign investment
Show answer & explanation

Businesses face fewer rules on importing, exporting and foreign investment

Fewer, not zero, restrictions.

Q105. Which of these most directly allowed MNCs such as car and phone makers to expand in India in the 1990s?

Intermediate
A New quotas on imports B Higher import taxes C Protection of domestic industry D Removal of barriers on foreign investment
Show answer & explanation

Removal of barriers on foreign investment

Liberalisation of investment policy.

Q106. Why did the Indian government put barriers in the way of foreign trade and investment in the first place — and what later made it want them gone?

Intermediate
Show answer & explanation

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Q107. Take the case of Chinese toys and show how a quota works as a barrier to trade.

Intermediate
Show answer & explanation

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Q108. In what way did loosening the rules on trade and investment push globalisation along?

Intermediate
Show answer & explanation

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Q109. Explain how liberalisation of foreign trade and investment policy has enabled globalisation in India.

Intermediate
Show answer & explanation

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Any five points, 1 mark each. 1 mark — trade barriers explained. 1 mark — protection after Independence. 1 mark — 1991 decision and reason. 1 mark — liberalisation defined. 1 mark — effects on trade and investment. 1 mark — link to globalisation. Or any other relevant point.

Q110. Why did India follow a policy of protection after Independence and later shift to liberalisation? Explain.

Intermediate
Show answer & explanation

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Any five points, 1 mark each. 1 mark — barriers after Independence. 1 mark — reason: young industries. 1 mark — essential imports only. 1 mark — developed countries did the same. 1 mark — 1991 shift and reason. 1 mark — results of liberalisation. Or any other relevant point.

Q111. By what different routes do MNCs establish, control or carry out production abroad? (Project)

Intermediate
Show answer & explanation

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Q112. 'The impact of globalisation has not been uniform.' Explain. (Project)

Intermediate
Show answer & explanation

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Q113. How can the government help make globalisation fairer? (Project)

Intermediate
Show answer & explanation

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Topper level · 26 questions

Q114. Which situation would most directly slow down globalisation, as the chapter defines it?

Advanced
A A rise in the number of MNCs looking for cheap locations abroad B Faster growth of foreign trade between many countries C More technology moving between countries than before D A fall in both foreign trade and foreign investment by MNCs
Show answer & explanation

A fall in both foreign trade and foreign investment by MNCs

Globalisation rests on rising trade and investment.

Q115. A student says, 'Globalisation is only about MNCs selling finished goods abroad.' What is missing from this view?

Advanced
A Nothing, because globalisation means only selling finished goods abroad B Globalisation is really only about people moving to other countries C MNCs also invest in production abroad, so production as well as markets gets integrated D Globalisation has nothing at all to do with the work of MNCs
Show answer & explanation

MNCs also invest in production abroad, so production as well as markets gets integrated

Investment and trade together integrate production and markets.

Q116. Ford's plant in India exported car components for the company's many factories around the world. What does this show?

Advanced
A Each Ford factory makes a whole car by itself without parts from elsewhere B The Indian plant produced only for buyers inside India C Production in different countries is linked, as parts made in one country are used in another D Car components are not allowed to cross national borders
Show answer & explanation

Production in different countries is linked, as parts made in one country are used in another

Trade by MNCs links production across countries.

Q117. Which of these best explains why MNCs are called 'major players' in globalisation rather than ordinary exporters?

Advanced
A They sell goods only within their own home country B They do not invest any money outside their home country C They are run by governments rather than private owners D They not only trade but also own and control production across several nations
Show answer & explanation

They not only trade but also own and control production across several nations

Investment plus trade.

Q118. A student says, 'Globalisation means everyone in the world now shares one culture.' How should this be corrected for the chapter?

Advanced
A The chapter says globalisation has made all people speak one language B The chapter says globalisation is only about films and music C The chapter studies globalisation as economic integration through trade and foreign investment D The chapter says globalisation has ended all differences between countries
Show answer & explanation

The chapter studies globalisation as economic integration through trade and foreign investment

The chapter's limited economic sense.

Q119. Read the Assertion and Reason and choose the correct option. Assertion (A): Most regions of the world are in closer contact with each other than a few decades ago. Reason (R): The movement of people between countries has increased enormously.

Advanced
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 but R is true
Show answer & explanation

A is true but R is false

Closer contact comes from goods, services, investment and technology; movement of people has not risen much.

Q120. What does the chapter's cartoon — 'Globalisation is fun!' versus 'Someday you'll have to pay the price!' — suggest?

Advanced
A Globalisation has no effects at all B Everyone agrees globalisation is always good C Globalisation brings gains to some but may carry costs for others D Globalisation affects only children
Show answer & explanation

Globalisation brings gains to some but may carry costs for others

A reminder that impacts differ.

Q121. 'MNCs are playing a major role in the globalisation process.' Justify this statement.

Advanced
Show answer & explanation

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Any five points, 1 mark each. 1 mark — MNC defined. 1 mark — search for cheap locations. 1 mark — rising foreign investment. 1 mark — integration of production. 1 mark — MNC control of trade with example. 1 mark — conclusion. Or any other relevant point.

Q122. Why does the chapter call developments in information and communication technology 'even more remarkable' than transport improvements?

Advanced
A They made all ships and planes unnecessary B They stopped countries from trading goods C They let information, services and payments move across the world instantly and cheaply D They reduced the number of computers in use
Show answer & explanation

They let information, services and payments move across the world instantly and cheaply

Instant, near-free global communication.

Q123. Would globalisation at its present speed and scale have been possible without the expansion of IT?

Advanced
A Yes — IT plays no part in modern trade B Yes — letters by sea are just as fast C No — because IT has stopped all trade in goods D No — IT lets firms coordinate production and payments across countries instantly
Show answer & explanation

No — IT lets firms coordinate production and payments across countries instantly

The chapter's discussion question.

Q124. Read the Assertion and Reason and choose the correct option. Assertion (A): IT has done much to spread the production of services across countries. Reason (R): The cost of air transport has fallen.

Advanced
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 but R is true
Show answer & explanation

Both A and R are true, but R is not the correct explanation of A

Both true, but cheaper air cargo moves goods; IT spreads services.

Q125. Why does the chapter's cartoon show a child asking why her own textbook is poorly printed while the London magazine is printed well in Delhi?

Advanced
A To show that Delhi has no printing presses B To prove that textbooks are printed in London C To argue that technology has no effect D To suggest that the benefits of new technology do not reach everyone equally
Show answer & explanation

To suggest that the benefits of new technology do not reach everyone equally

A question about who gains.

Q126. A software firm in Pune works on a project during the Indian day and hands it to a team in California, which continues while India sleeps. What makes this possible?

Advanced
A Information and communication technology linking offices instantly B Container ships crossing the Pacific C Cheaper air tickets for workers D Import taxes on software
Show answer & explanation

Information and communication technology linking offices instantly

IT coordinates production across time zones.

Q127. Why do lower transport costs encourage MNCs to spread production across countries?

Advanced
A They make it impossible to sell goods abroad B They raise the cost of every component C They force MNCs to produce in one country D Parts and finished goods can be moved between distant plants and markets cheaply
Show answer & explanation

Parts and finished goods can be moved between distant plants and markets cheaply

Cheap transport links dispersed production.

Q128. What did the chapter's cartoon character mean by asking, 'But where is the electricity?'

Advanced
A Printing presses do not need electricity at all B Electricity is imported from London C New technology depends on basic facilities like electricity, which not all places have D Computers work without power
Show answer & explanation

New technology depends on basic facilities like electricity, which not all places have

Technology needs infrastructure.

Q129. Why would a London publisher choose to have its magazine designed and printed in Delhi?

Advanced
A IT and cheap air transport let it use skilled, lower-cost work in Delhi and still deliver on time B London has banned the printing of all magazines C Delhi designers work without any computers at all D Magazines can be printed only in Asian countries
Show answer & explanation

IT and cheap air transport let it use skilled, lower-cost work in Delhi and still deliver on time

Technology makes distant production practical.

Q130. Why is technology considered a factor that enabled globalisation?

Advanced
Show answer & explanation

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Q131. Compare the contributions of transportation technology and information technology to globalisation.

Advanced
Show answer & explanation

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Any five points, 1 mark each. 1 mark — technology as a factor. 1 mark — transport moves goods faster and cheaper. 1 mark — containers and air transport. 1 mark — IT moves information. 1 mark — IT spreads services with example. 1 mark — combined effect. Or any other relevant point.

Q132. A student argues that India was wrong to protect its industries after Independence because rich countries never did so. How does the chapter answer this?

Advanced
A Rich countries have never had any industries at all B Protection was forced on India by the WTO C All developed countries protected their producers in their early stages of development D India never protected its industries
Show answer & explanation

All developed countries protected their producers in their early stages of development

Protection is common in early development.

Q133. Who would lose most if the government put a heavy tax on imported Chinese toys?

Advanced
A Indian toy-makers B The Indian government C Indian buyers who wanted cheaper imported toys D Toy shops that sell only Indian toys
Show answer & explanation

Indian buyers who wanted cheaper imported toys

Buyers pay higher prices.

Q134. Why might a government today still use trade barriers for some goods, even after liberalisation?

Advanced
A To end all of its foreign trade permanently and completely B Because barriers always lower prices for buyers C Because barriers are legally required before any exports D To regulate what kinds of goods, and how much of each, come into the country
Show answer & explanation

To regulate what kinds of goods, and how much of each, come into the country

Barriers remain a tool of regulation.

Q135. Should quotas be used to protect Indian toy-makers from Chinese toys? Which answer shows balanced reasoning?

Advanced
A Quotas protect local makers and jobs, but buyers lose cheaper choices and local makers may not improve B Quotas have no effect on anyone C Quotas always help both buyers and producers D Quotas always harm local producers
Show answer & explanation

Quotas protect local makers and jobs, but buyers lose cheaper choices and local makers may not improve

Barriers have gainers and losers.

Q136. Why would liberalisation make Indian markets more like those of other countries?

Advanced
A It stops foreign goods from entering B It raises all import taxes C It ends competition among producers D Freer trade and investment let foreign goods and firms compete in India, linking markets
Show answer & explanation

Freer trade and investment let foreign goods and firms compete in India, linking markets

Liberalisation integrates markets.

Q137. Why did the government believe competition would help Indian producers after 1991?

Advanced
Show answer & explanation

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Q138. What are trade barriers? Using the example of Chinese toys, explain how a tax on imports and a quota work, and who gains and loses.

Advanced
Show answer & explanation

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Any five points, 1 mark each. 1 mark — trade barrier defined. 1 mark — purpose of barriers. 1 mark — import tax effect. 1 mark — quota effect. 1 mark — gainers. 1 mark — losers or evaluation. Or any other relevant point.

Q139. Why do developed countries want developing countries to liberalise, and what should developing countries demand in return? (Project)

Advanced
Show answer & explanation

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