Question 1 1 / -0
Match the following with respect to location preference of MNCs under globalisation:
Location Reason for preference A. China (i) Highly skilled engineers B. India (ii) Closeness to US market C. Mexico (iii) Cheap manufacturing location D. Eastern Europe (iv) Closeness to European market
Solution
Location Reason for preference A. China (iii) Cheap manufacturing location B. India (i) Highly skilled engineers C. Mexico (ii) Closeness to US market D. Eastern Europe (iv) Closeness to European market
A) Goods manufactured in the U.S. cost 5% more as compared to their counterparts in China. China is 10-20% cheaper than major European countries.
B) In India, Engineering is one of the safest career options, therefore chosen by many. There are more than 4,00,000 engineers graduating every year. Out of 4,00,000, it is obvious that there will be 40,000 - 50,000 good engineers.
C) The U.S. is Mexico's biggest trading partner and Mexico is the U.S.'s third-largest trading partner.
D) Central and Eastern European countries are close in proximity to Western Europe, but have important differences from other countries. Most of them are small in size, with relatively open economies, dependent on exports.
Question 2 1 / -0
Match the following:
List I List II A. Trade Barrier (i) Money put in by an MNC B. Liberalisation (ii) Tax on imports C. Foreign Investment (iii) To attract foreign investment D. SEZ (iv) Removing restrictions put in place by the government
Solution
List I List II A. Trade Barrier (ii) Tax on imports B. Liberalisation (iv) Removing restrictions put in place by the government C. Foreign Investment (i) Money put in by an MNC D. SEZ (iii) To attract foreign investment
A. Tax on imports is known as a trade barrier because restrictions can be set up by the government on the import of goods.
B. Liberalization (or liberalisation) is a process whereby a state lifts restrictions on some private individual activities. Liberalization occurs when something which used to be banned is no longer banned, or when government regulations are relaxed.
C. Foreign investment refers to the money put in by an MNC. A foreign direct investment is an investment in the form of a controlling ownership in a business in one country by an entity based in another country.
D. SEZs or Special economic Zones are zones intended to facilitate rapid economic growth by leveraging tax incentives to attract foreign dollars and technological advancement.
Question 3 1 / -0
Which of the following statements is false regarding production until the middle of 20th century?
Solution
Until the middle of the twentieth century, production was largely organised within countries. What crossed the boundaries of these countries were raw materials, food stuff and finished products. Colonies such as India exported raw materials and food stuff and imported finished goods. Trade was the main channel connecting distant countries.
Question 4 1 / -0
The MNCs set up their offices in regions other than their home countries. This is done to
Solution
The MNCs set up their production offices in one or more countries, where they can get cheap labour and other resources. This is done to lower the cost of production and to maximise profits. MNCs are spreading their production across countries in many ways. Large MNCs set up production units jointly with local companies in a country. Many times, MNCs buy local companies and then start expanding their production activities.
Question 5 1 / -0
Which of the following statements is true regarding Multi-National Companies?
Solution
The MNCs bring with them the latest technology for production, which favours the local companies of the country. MNCs not only sell their finished products, but also produce the goods and services globally. The investment made by MNCs is called Foreign Direct Investment. The MNCs determine the price or quality of products produced by distant producers.
Question 6 1 / -0
Which of the following factors is/are considered by MNCs before setting up production units?
Solution
A multinational corporation or worldwide enterprise is a corporate organization that owns or controls production of goods or services in at least one country other than its home country. The MNCs set up their production units close to markets where skilled and unskilled labour is available at low costs, and where availability of other factors of production is assured. They also look for government policies favouring their interests.
Question 7 1 / -0
MNCs set up production jointly with some of the local companies. What is/are the benefit(s) to the local companies from such joint production?
Solution
A Multinational Corporation (MNC) or worldwide enterprise is a corporate organisation that owns or controls production of goods or services in at least one country other than its home country. The MNCs provide the local companies with money for additional investments like buying new machines for faster production.
Question 8 1 / -0
Which of the following ways are used by MNCs to spread their production and interact with the local producers?
Solution
The most common strategy of a Multinational Corporation is to first buy a local company and then to expand production. Depending on the product, MNCs adopt other strategies also. In labour intensive products like garments and footwear, MNCs place huge orders from developing nations, and then sell these under their own brand names to the customers. MNCs are spreading their production and interacting with local producers in various countries across the globe. MNCs are setting up partnerships with local companies.
Question 9 1 / -0
With which of the following companies did Ford Motors, an American company, collaborate to set up a plant in Chennai when it first entered in India?
Solution
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. 1,700 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.
Question 10 1 / -0
Which of the following are the benefits of Foreign Trade?
Solution
Foreign Trade creates an opportunity for the producers to reach beyond the domestic markets. They can compete in markets located in other countries of the world. For the buyers, import of goods produced in another country is one way of expanding the choice of goods beyond what is domestically produced.
Question 11 1 / -0
Why do the Chinese manufacturers export toys to India?
Solution
In the competition between Indian and Chinese toys, Chinese toys prove better. Indian buyers have a greater choice of toys at lower costs. As a result, the Chinese toys are sold at higher prices in India. For the Chinese toy makers, this provides an opportunity to expand business.
Question 12 1 / -0
Which of the following is not the reason for movement of people from one country to another?
Solution
Human migration is the movement of people from one place to another with the intention of settling permanently or temporarily at a new location (geographic region). People move from one country to another in search of better income, better jobs and better education.
Question 13 1 / -0
The competition among the producers in interconnected countries ________ due to globalisation.
Solution
The 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. Globalisation leads to increased competition. This competition can be related to product and service cost and price, target market, technological adaptation, quick response and quick production by companies etc. When a company produces with less cost and sells cheaper, it is able to increase its market share.
Question 14 1 / -0
Which of the following factors has stimulated the globalisation process?
Solution
Technology has been a major factor that has stimulated the globalisation process. For instance, the past fifty years have seen several improvements in transportation. Due to this, faster delivery of goods across long distances is possible at lower costs.
Question 15 1 / -0
Which of the following is not an advancement in Information and communication technology?
Solution
The transportation facilities are not a part of information and communication technology. Information and communication technology (ICT) refers to all the technology used to handle telecommunications, broadcast media, intelligent building management systems, audiovisual processing and transmission systems, and network-based control and monitoring functions.
Question 16 1 / -0
Which of the following will happen if the government imposes tax on import of goods?
Solution
If the government imposes tax on import of goods, then the buyers will have to pay a higher price for them. The goods will no longer be cheap in the Indian markets and the imports will automatically reduce. However, there will be no change in exports.
Question 17 1 / -0
Tax on imports is an example of
Solution
The most common barrier to trade is a tariff, a tax on imports. Tariffs raise the price of imported goods relative to domestic goods (goods produced at home). Another common barrier to trade is government subsidy to a particular domestic industry. Subsidies make the goods cheaper to produce than in foreign markets.
Question 18 1 / -0
Why did the Indian government impose barriers on foreign trade and foreign investment after India achieved Independence?
Solution
Indian government imposed barriers on foreign trade and foreign investments after independence because:
Question 19 1 / -0
Removing barriers or restrictions set by the government is known as:
Solution
Economic liberalisation refers to those government policies which promote economic growth by opening up trade to international markets, extending the use of markets and lessening the restrictions and regulations placed on business. Economic liberalisation does not always come without its drawbacks. Domestic companies may face difficulties in competing with foreign companies once the international trade barriers are removed. Also, there is risk of brain drain and the environmental degradation that can follow in the wake of deregulation. Many developing third world countries, however view economic liberalisation as an approach for which there is no alternative.
Question 20 1 / -0
The aim of World Trade Organisation is to
Solution
The aim of WTO is to liberalise international trade. It establishes rules for all the countries, developed or developing, and sees that these rules are obeyed. In practice, it is seen that developed countries have unfairly retained trade barriers, while the developing countries are forced to remove them. This is not the aim of WTO.
Question 21 1 / -0
Which of the following is not the impact of Globalisation in India?
Solution
The following are the positive impacts of globalisation on the Indian economy:
Question 22 1 / -0
What do we mean by SEZ?
Solution
A Special Economic Zone (SEZ) is an area in which the business and trade laws are different from the rest of the country. SEZs are located within a country's national borders and their aims include increased trade balance, employment, increased investment, job creation and effective administration.
Question 23 1 / -0
World class facilities such as electricity, transport, roads and exemption from taxes for initial period of 5 years are the features of
Solution
World class facilities such as electricity, transport, roads and exemption from taxes for initial period of 5 years are the features of SEZ's. The salient features of SEZ are duty free products, no tariffs etc.
Question 24 1 / -0
Instead of hiring workers on regular basis, the companies are hiring workers flexibly for short periods. This helps them to
Solution
Flexibility in labour laws can help the compaines to decrease their production cost by employing labourers only for short period of time when there is need instead of employing them for long period of time or yearly basis. By easing upon labour laws, company heads can negotiate wages and terminate employment, depending on market conditions.
Question 25 1 / -0
Which of the following is not a multinational company?
Solution
Patanjali is not a multinational company. Patanjali Ayurved Limited is an Indian consumer goods company. A multinational corporation or worldwide enterprise is a corporate organisation that owns or controls production of goods or services in at least one country other than its home country.
Question 26 1 / -0
Who plays the most important role in globalisation?
Solution
Multinational corporations (MNCs) are considered as the agents of globalisation and hence play the most important role in globalisation. Multinational corporations are a function of this interconnectedness as they can form and utilise the connections between national economies to operate within multiple countries. This represents the flows of physical goods, such as raw materials, energy, food, parts and consumption goods, between economies.
Question 27 1 / -0
Selling of a part of public sector enterprises is called
Solution
When the government sells a part of its equity of a public enterprise, less than 50% of its total stock, it is called disinvestment. The purpose of the sale, according to the government, was mainly to improve financial discipline and facilitate modernisation. Disinvestment means the dilution of stake of the Government in a public enterprise.
Question 28 1 / -0
Globalisation policy was initiated by the Government of India in the year
Solution
Globalisation policy was initiated by the Government of India in 1991. The new economic model 1991 of economic reforms is commonly known as the LPG model.
Question 29 1 / -0
Globalisation has led to improvement in living conditions
Solution
Globalisation is the integration of economies, industries, markets, cultures and policy-making around the world. Globalisation represents a process by which national and regional economies, societies, and cultures have become integrated through the global network of trade, communication, immigration and transportation. Globalisation's impact is not uniform either for the people of developed or developing countries.
Question 30 1 / -0
WTO means
Solution
WTO stands for World Trade Organisation. It is the only global international organisation dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world's trading nations and ratified in their parliaments.
Question 31 1 / -0
Which of the following statements is not true regarding WTO?
Solution
The World Trade Organisation is an intergovernmental organisation that is concerned with the regulation of international trade between nations. It is believed that WTO forces developing countries to remove barriers, but it is not so. The WTO aims to liberalise international trade and makes rules for both developed as well as developing countries.
Question 32 1 / -0
World Trade Organisation was established in the year
Solution
The WTO officially commenced on 1 January, 1995 under the Marrakesh Agreement, signed by 123 nations on 15 April, 1994, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. It is the largest international economic organisation in the world. The World Trade Organisation is an intergovernmental organisation that is concerned with the regulation of international trade between nations.
Question 33 1 / -0
Who among the following is the President of the World Bank as in 2020?
Solution
David Robert Malpass (born March 8, 1956) is an American economic analyst and former government official serving as President of the World Bank Group since 2019. The President of the World Bank Group is the head of World Bank Group. The president is responsible for chairing the meetings of the Boards of Directors and for overall management of the World Bank Group.
Question 34 1 / -0
Which of the following is an unfavourable impact of globalisation on the Indian economy?
Solution
The cultural erosion of a country is one of the unfavourable impacts of globalisation on the Indian economy. Cultural erosion describes the process of a culture losing many of its core elements due to globalisation. This is often due to the arrival of a new culture that replaces the current culture. It is transmission of ideas, meanings, and values around the world in such a way as to extend and intensify social relations. This process is marked by the common consumption of cultures that have been diffused by the Internet, popular culture media, and international travel.
Question 35 1 / -0
_____ has the leading BPO sector in India.
Solution
Karnataka has leveraged the prowess of its IT industry to emerge as the leading ITES-BPO destination in India, as it outscores other states on some key parameters that potential investors look at before setting up shop.
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