Globalisation and the Indian Economy Test

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Globalisation and the Indian Economy Test - 28

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Weekly Quiz Competition

Question 1
1 / -0

"MNCs keep in mind certain factors before setting up production". Identify the incorrect option from the choices given below:

A
Availability of cheap skilled and unskilled labour

B
Proximity to markets

C
Presence of a large number of local competitors

D
Favourable government policies
Solution
Multinational Corporations (MNCs) set up their factories or production units close to markets where they can get the desired type of skilled or unskilled labour at low costs along with other factors of production. After ensuring these conditions MNCs set up production units in the following ways:
- Jointly with some local companies of the existing country.
- Buy the local companies and then expand its production with the help of modern technology.
- They place orders for small producers and sell these products under their own brand name to the customers worldwide.
  Hence, the correct answer is option C.
Question 2
1 / -0

By setting up production plants in India, MNC's may prove harmful for:

A
All large scale producers

B

All domestic producers

C

All substandard domestic producers

D

All small scale producers

Solution

While the existence of MNCs allow the consumers a greater choice and better product quality, it can be detrimental to local sellers who cannot afford to produce at the quality of the MNCs, as consumers are offered better deals by the MNCs it leaves the local producers especially those of a lower quality product to flounder. While the larger of the domestic producers are able to cope better the smaller ones simply lack the resources to compete with the MNCs and are often forced out of the market or adapt to living of a considerably reduced portion of the consumer base and as such the entry of MNCs into the domestic market leads to both benefits and detriments. Hence, correct answer is option C.
Question 3
1 / -0

Each of the following is a reason why international trade has expanded in recent decades except one. Identify.

A
Many new high technology goods have been introduced for which the cost of transport relative to the value of the product is low.

B
There have been improvements in technology that have improved telecommunications between countries.

C
Policymakers have promoted policies to increase international trade, such as the General Agreement on Tariffs and Trade, and subsequently established the World Trade Organization.

D
Technological improvements have meant that countries have become more similar in terms of the goods they can produce.

Solution

Rapid technological innovation are driving the formation of global economy. Data communication services has provided a competitiveness among the economy which has not only improved trade but also paved a way for the future growth and expansion.
Hence, option B is correct
Question 4
1 / -0

Which of the following ways MNC's do to reduce the cost of production and earn more profit?

A

They set up their production units where it is close to the market.

B

They put barriers to foreign trade

C

They buy local companies

D

All of these
Solution
1. The industries of developed country get latest technology from foreign countries through MNC's.
2. The investment level, employment level, and income level of the developing country increases due to the operation of MNC's.
3. They can reduce imports and increase exports due to goods produced by MNC's- balance of payment.
4. Greater availability of products for local consumers MNC's break protectionalism, curb local monopolies, create competition among domestic companies- enhance their competitiveness.
  Hence, correct answer is option D.
Question 5
1 / -0

Which of the following statements best describe fair globalization?

A

It creates opportunities for all.

B

It benefits rich and powerful people.

C

It helps developed countries to retain unfairly trade barriers.

D

It does not support small producers.
Solution
Fair globalization means creating opportunities for all and ensuring that the effects of globalization are shared better.
The government has an important role in ensuring fair globalization.
1. It can ensure that the policies and interests are shared better not only among the rich but among all the people of the country.
2. It can ensure that the labour laws are applied properly.
3. It can ensure that the labourers are getting their rights.
4. If necessary the govt can implement trade barriers.
5. It can help the small labourers to perform well.
  Hence, correct answer is option A.
Question 6
1 / -0

Ford motors came to India in the year _____.

A
1994

B
1995

C
1996

D
1997

Solution

Ford Motors came to India in 1995 and spent Rs. 1700 crore to set up a large plant near Chennai.
Question 7
1 / -0

Who are the most affected by WTO rules?

A
Indian farmers

B
Farmers of U S A

C
Industrialist in India

D
Industrialist in China

Solution

Though WTO is supposed to allow free trade for all, in practice, it is seen that the developed countries have unfairly retained trade barriers. A small percentage of people who are engaged in agriculture in the US receive massive sums of money from the US government for production and for exports to other countries. Due to this massive money that they receive, US farmers can sell the farm products at abnormally low prices. The surplus farm products are sold in other country markets at low prices, adversely affecting farmers in these countries like India.
Question 8
1 / -0

Globalization has mostly affected ________.

A
Developed countries

B
MNC's

C
Large producers

D
Small producers

Solution

For a large number of small producers and workers globalisation has posed major challenges.
MNC's sell their products at cheaper prices in other countries which affects Indian producers because people would prefer buying the same thing at a cheaper price which is sold by MNC's.
Question 9
1 / -0

What is the basic function of foreign trade?

A
It connects markets of two countries only.

B
It creates opportunities for only the buyer to approach foreign goods.

C
It connects markets of different countries.

D
Foreign trade connects developed countries only.

Solution

In general, 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.
And, producers in the two countries now closely compete against each other even though they are separated by thousands of miles! Foreign trade thus results in connecting the markets or integration of markets in different countries.
Question 10
1 / -0

The aim of WTO is _______.

A
to keep watch on trade of less developing countries.

B
to support only the least developed countries

C
to promote trade in developed countries

D
to liberalize international trade

Solution

World Trade Organisation (WTO) is one such organisation whose aim is to liberalise international trade. Started at the initiative of the developed countries, WTO establishes rules regarding international trade, and sees that these rules are obeyed. As of December 2017, WTO has 164 members.

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Re-Attempt Weekly Quiz Competition

Globalisation and the Indian Economy Test - 28

Result

Globalisation and the Indian Economy Test - 28

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SHARING IS CARING

Question 1

Availability of cheap skilled and unskilled labour

Proximity to markets

Presence of a large number of local competitors

Favourable government policies

Solution

Question 2

All large scale producers

All domestic producers

All substandard domestic producers

All small scale producers

Solution

Question 3

Many new high technology goods have been introduced for which the cost of transport relative to the value of the product is low.

There have been improvements in technology that have improved telecommunications between countries.

Policymakers have promoted policies to increase international trade, such as the General Agreement on Tariffs and Trade, and subsequently established the World Trade Organization.

Technological improvements have meant that countries have become more similar in terms of the goods they can produce.

Solution

Question 4

They set up their production units where it is close to the market.

They put barriers to foreign trade

They buy local companies

All of these

Solution

Question 5

It creates opportunities for all.

It benefits rich and powerful people.

It helps developed countries to retain unfairly trade barriers.

It does not support small producers.

Solution

Question 6

1994

1995

1996

1997

Solution

Question 7

Indian farmers

Farmers of U S A

Industrialist in India

Industrialist in China

Solution

Question 8

Developed countries

MNC's

Large producers

Small producers

Solution

Question 9

It connects markets of two countries only.

It creates opportunities for only the buyer to approach foreign goods.

It connects markets of different countries.

Foreign trade connects developed countries only.

Solution

Question 10

to keep watch on trade of less developing countries.

to support only the least developed countries

to promote trade in developed countries

to liberalize international trade

Solution

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