Page 115 - Understanding Economics for Class 10

6. “The impact of globalisation has not been uniform.” Explain this statement.
Ans. The impact of globalisation has not been uniform because
(i) Investing in India has proved to be beneficial for MNCs
(ii) Only developed countries have gained profits due to globalisation. The developing countries
Goyal Brothers Prakashan
are only a source of setting industries and getting cheaper labour, and the entire profits are
earned by the developed countries.
(iii) Small industries and companies in developing countries have constantly been facing
challenges in terms of earning profits and bringing their goods to the market.
(iv) Globalisation has brought greater competition among producers - both local and foreign
producers. It has proved to be advantageous to consumers specially the well-off people in
urban areas. More choices of goods at lower price and of improved quality are available to
these consumers. Hence, better standard of living is enjoyed by these people than earlier.
The impact of Globalisation has not been uniformed among producers and workers.
Producers
(i) Production standards have raised by investing in newer technology and production methods.
(ii) By collaborating successfully with foreign companies, some have gained.
(iii) Some large Indian companies have emerged as multinationals due to globalisation.
(iv) In these industries and services, new jobs have been created. Also, local companies supplying
raw materials, etc. to these industries have prospered.
Workers
(i) Lives of workers have substantially changed due to Globalisation and the pressure of
competition.
(ii) Workers’ jobs are no longer secure, because of the growing competition, these days most
employers prefer to employ workers ‘flexibly’.

7. How has liberalisation of trade and investment policies helped the globalisation process?
Ans. Removing barriers or restrictions set by the government is known as liberalisation. Some
very powerful international organisations have supported the decision of liberalisation of foreign
trade and investment in India. These organisations say, trade between countries should be ‘free’.
Barriers to foreign trade and investment are harmful hence, there should be no barriers.
It has made foreign trade and investment easier. The choices of the buyers have also expanded,
as now they get to choose products manufactured by not only domestic companies but also
foreign companies. Competition among traders has resulted in the lower price of products.
Liberalisation has spread globalisation as the decision-making power of export and import now
lies with the businessmen themselves.

8. How does foreign trade lead to integration of markets across countries? Explain with an example
other than those given here.
Ans. The main channel connecting countries has been foreign trade for a long time.
(i) The basic function of foreign trade is to create an opportunity for the producers to reach
beyond the domestic markets, i.e., markets of their own countries.
(ii) Producers gets the opportunity to sell their product not only in the domestic market but to
compete in markets located in other countries of the world.
(iii) Similarly, consumers also get wide variety of choice because through import, goods of other
countries are also open for them. Now they have access to both the domestically produced
goods as well as the imported goods.
(iv) The Indian market today is not flooded with goods made in India but goods from all across
the world at affordable prices.

Economics Class X E-101