Page 103 - Understanding Economics for Class 10

 Foreign investment by MNCs in these countries is increasing over the years. Foreign trade
between the countries is also increasing. A large part of the foreign trade is also controlled
by MNCs.
 For Example: Ford Motors set up
Goyal Brothers Prakashan
a car manufacturing plant in India.
Besides producing cars for the Indian BE CArEFULL THAT'S
markets, it also exports cars to other OUr WOrLD yOU'rE
developing countries and other car PLAyING WITH!
components are also exported for its SOMEDAy yOU'LL
many factories around the world. HAvE TO PAy THE
PrICE!
 Likewise, activities of most MNCs GLOBALISATION
involve substantial trade in goods and IS FUN!
also services.
 Due to increased foreign trade and
investment, there has been a greater
integration of production and markets
across countries.
 Globalisation is this process of
rapid integration or interconnection between countries. (Courtesy: NCERT)
 Mobility of investment, goods and services, and technology has increased between countries.
 This has helped in bringing all the regions of world closer with each other than a few
decades back.
 Movement of people between countries is also a way through which the countries can
be connected. Movement of people from one country to another usually takes place in
search of better income, better jobs or better education.
 However, due to various restrictions, there has not been much increase in the movement
of people between countries in the past few decades.

LET’S WORK THESE OUT (Page No. 62)

1. What is the role of MNCs in the globalisation process?
Ans. Globalisation is the process of rapid integration or interconnection between countries.
An important role is played by MNCs in the process of globalisation.
(i) A large part of the foreign trade is also controlled by MNCs. For Example: Ford
Motors set up a car manufacturing plant in India. Besides producing cars for the Indian
markets, it also exports cars to other developing countries and other car components
are also exported for its many factories around the world.
(ii) Activities of most MNCs involve substantial trade in goods and also services.
(iii) Due to increased foreign trade and investment, there has been a greater integration
of production and markets across countries.
(iv) Mobility of investment, goods and services, and technology has increased between
countries. This has helped in bringing all the regions of world closer with each other
than a few decades back.
(v) Movement of people between countries in search of better income, better jobs or
better education is also a way through which the countries can be connected.

Economics Class X E-89