Globalization and Indian economy
Q.1 How do MNC manage to keep the cost of production of their goods low? Explain with example.
Q.2 How are MNCs spreading their production & interacting with local producers in various countries across the globe? Explain
Q.3. Describe five benefits of foreign trade.
Q.4. "Globalization is two faced." Explain
Q.5. Foreign trade results in connecting the market sir integration of markets indifferent countries.'Explain.
Q.6. Explain any five factors that have stimulated the Globalization process.?
Q.7 Why did government of India remove trade barriers? Explain the reasons.
Q.8 What is meant by trade barriers? Why do government use it.? Explain
Answers
Answer:
1. Multi-National Companies keep the cost of production of their goods low by: (i) Setting up factories for production in the regions where abundant raw material is available at low cost. (ii) Setting up factories for production in the regions where cheap labour is available.
2. The multinational corporations have spread their production and interaction with local producers in the following ways : (i) Setting up production jointly with local companies. ... (ii) The MNCs provide efficient managerial and advanced technology for faster production and efficient use of resources.
3. (i) With the opening of trade, goods travel from one market to another. (ii) Choice of goods in markets rises. (iii) Prices of similar goods in two markets tend to become equal. (iv) Producers in the two countries now closely compete against each other even though they are separated by thousands of miles.
4. (i) Not everyone has benefited from globalisation. ... People with education, skill and wealth have made the best use of the new opportunities. (ii) On the other hand, many small producers and workers have suffered as the result of the rising competition.
5. Foreign trade creates an opportunity for the producers to reach beyond the domestic markets, i.e., markets of their own countries. ... With the opening of trade, goods travel from one market to another. Choice of goods in the markets rises. Prices of similar goods in the two markets tend to become equal.
6. Rapid improvement in technology has been one major factor that has stimulated the globalisation process. For instance, the past fifty years have seen several improvements in transportation technology. This has made much faster delivery of goods across long distances possible at lower costs.
7. In New Economic Policy in 1991, the government wished to remove these barriers because it felt that domestic producers were ready to compete with foreign industries. It felt that foreign competition would in fact improve the quality of goods produced by Indian industries.
8. Barriers or restrictions that are imposed by government on free import and export activities are called trade barrier. ... (a) Increase or decrease of foreign trade of the country. (b) With the help of trade barriers government can decide what kinds of goods and how much of each, should be traded in the country.