Social Science : Economics : Chapter 2 : Globalization and Trade
I. Choose the Correct Answer:
1. Who is the head of the World Trade Organisation (WTO)?
- Ministerial conference
- Director General
- Deputy Director General
- None of these
Ans : Director General
2. Colonial advent in India
- Portuguese, Dutch, English, Danish, French
- Dutch, English, Danish , French
- Portuguese , Danish, Dutch, French, English
- Danish, Portuguese, French, English, Dutch
Ans : Portuguese, Dutch, English, Danish, French
3. GATT’s first round held in ________
Ans : Geneva
4. India signed the Dunket proposal in ________
Ans : 1994
5. who granted the English “golden Fireman” in 1632?
- Sultan of Golconda
Ans : Sultan of Golconda
6. Foreign Investment policy (FIP) announced in ________
- June 1991
- July 1991
- July- Aug-1991
- Aug 1991
Ans : July-Aug. 1991
7. Indian government was introduced ___________ in 1991
- World Trade Organisation
- New Economic Policy
Ans : Globalization
II. Fill in the blanks:
1. A better economy introduce rapid development of the ________.
Ans : Nation.
2. WTO agreement came into force from ________.
Ans : January, 1, 1995
3. The term globalization invented by ________.
Ans : Pro. Theodore Levitt
III. Match the following:
|1. Multination corporation in India||1947|
|2. MNC||enforce international trade|
|3. GATT||Minimize cost of production|
|4. 8th Uruguay Round||Infosis|
Ans: 1 – D, 2 – C, 3 – A, 4 – E, 5 – B
IV. Give short Answers:
1. What is globalization?
- Globalization is the process of integrating various economies of the world without creating any barriers in the free flow of goods and services, technology, capital and even labour or human capital.
- Under globalization, the international markets for goods and services are integrated.
- Globalization is the integration of a country with the world economy.
2. Write the types of globalization.
The types of globalization are
- Archaic Globalization
- Proto Globalization
- Modern Globalization
3. Write short note on Multinational corporation.
- Multi National Corporation is a corporate organization which owns or controls production of goods or services in at least one country other than its home ountry.
- It is also called Transnational Corporation (TNC) or Multinational Enterprise (MNE).
4. What are the reforms made to adopt globalization?
- Abolition of Industrial licensing except for a few industries
- Reduction in the number of industries reserved for public sector.
- Fixation of a realistic exchange rate of rupee to exchange exports of Indian goods
- Foreign private sector by making rupee convertible on trade, on current account and by reducing import duties
- Foreign exchanges regulations were suitably amended
- The Statutory Liquidity Ratio (SLR) was reduced to increase lending by RBI.
5. What is Fair trade ?
- Fair Trade is a way of doing business that ultimately aims to keep small farmers an active part of the world Market place.
- It aims to empower consumer to make purchases that support their values.
- Fair Trade is a set of business practices voluntarily adopted by the producers and buyers of agricultural commodities and hand-made crafts.
- Fair trade is about better prices, decent working conditions and fair terms of trade for farmers and workers.
- It’s about supporting the development of thriving farming and worker communities and protecting the environment in which they live and work
6. Write any two principles of Fair Trade Practices.
- Transparency and Accountability
- Fair Trading Practices and Payment of a Fair Price.
- Ensuring no child Labour and Forced Labour
- Respect for the Environment
7. Write short note on TRIPs and TRIMs.
- TRIP means Trade Related aspects of Intellectual Property rights.
- Intellectual Property Right may be defined as “Information with a commercial Value”.
- Trips agreement covers seven areas of intellectual’s property rights i.e. Copy rights, Trade Market, Trade Secrets, Industrial Design, Geographical appellations Integrated circuits and Patents.
- TRIM means Trade Related Investment Measures.
- The Uruguay Round Agreement on TRIMs refers to certain conditions (or) restrictions imposed by a government in respect of foreign investment in the country in order to give adequate provisions for the home industries to develop
8. Write any two positive impact of Globalization.
- Standard of living has increased.
- Globalization rapidly increase better trade so that more people are employed.
- Introduced new technologies and new scientific research patterns.
- Globalization increasing the GDP of a country
V. Brief Answer
2. Briefly explain the evolution of MNC and its advantages and disadvantages.
Multi National Corporation (MNC) is a corporate organization which owns or controls production of goods or services in at least one country other than its home country.
Evolution of MNCs:
- The multinationals first started their activities in extractive industries or control over raw materials. Then they slowly entered the manufacturing and serivce sector.
- Most of the MNCs at present belong to the four major exporting countries viz., USA, UK, France, Germany. However, the largest is American.
- As a result of liberalized Foreign Investment Polilcy (FIP) announced in July-Aug 1991, there was a spurt of foreign collaborations and increase flow of foreign direct investment.
Advantages of MNC:
- Producing the same quality of goods at lower cost and without transaction cost.
- MNC reduce prices and increase the purchasing power of consumers world wide.
- MNC is able to take advantage of tax variation.
- Spurring job growth in the local economies.
Disadvantages of MNC:
- MNCs are a way for the corporations to develop a monopoly for certain products.
- They are also a detrimental effect on the environment.
- The introduction of MNC may lead to the downfall of smaller, local business.
- MNC breach ethical standards, accusing them of evading ethical laws and leveraging their business agenda with capital.
2. Write about the World Trade Organization.
- The Final Act of the Uruguay Round was signed by the member nations of GATT in April 1994. It paved the way for setting up of the World Trade Organisation.
- An agreement to this effect was signed by 104 countries. This Agreement came into force on January 1, 1995.
- At present there are 164 member countries.
- Its headquarters is in Geneva, Switzerland.
- Its members are Director General, Four Deputy Director Generals and other 600 official staff from around 80 member countries.
- The WTO mentions five types of subsidies which reduce the cost of doing business.
- They are Cash subsidies, Tax concessions, Assumption of risk, Government procurement policies and Stock purchase.
Objectives of WTO:
- To set and enforce rules for mternational trade.
- To provide a forum for negotiating and monitoring further trade liberalization.
- To resolve trade disputes.
- Introduction of sustainable development and environment can go together.
- To ensure that developing countries secure a better share of growth in world trade.
- To increase the transparency of decision making processes.
- To ensure full employment and broad increase in effective demand.
3. Write the challenges of Globalization.
- The benefits of globalisation extend to all countries that will not happen automatically.
- The fear that globalization leads to instability in the developing world.
- The industrial world that increased global competition will lead in race to the bottom in wages, labour right and employment practice.
- It leads to global imbalance
- Globalisation has resulted with the embarrassment.
- Globalisation has led to an increase in activities such as child labour and slavery.
- Consumption of more junk food that led to the degradation of health and spread of disease Globalisation has led to environmental degradation.