Page 120 - Understanding Economics for Class 10
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II.  Assertion-reasoning Based Questions
                            In the  question  given  below, there  are  two statements marked  as Assertion (A) and  reason
                            (r). read the statements and choose the correct option.
                            (a) Both A and r are true and r is the correct explanation of A.
               Goyal Brothers Prakashan
                            (b) Both A and r are true but r is not the correct explanation of A.
                            (c) A is correct but r is wrong.
                            (d) A is wrong but r is correct.

                            1.  Assertion (A): The NEP came in the year 1991 in India.
                               Reason (R):  The flaws of Government  policies  in 4 decades  prior to 1991 pushed the
                              introduction of LPG in India.
                         Ans.  (a)  Both A and r are true and r is the correct explanation of A.
                            2.  Assertion (A): MNC’s are having its branches across all over the globe.
                                Reason (R): The money spent by MNC’s on purchase of assets is called as Investment.
                         Ans.  (b)  Both A and r are true but r is not the correct explanation of A.



                            3.  Assertion (A): Outsourcing has provided loads of employment opportunities in developing
                              countries.
                               Reason (R): Outsourcing is the result of New Economic Policy.
                         Ans.  (b)  Both A and r are true but r is not the correct explanation of A.

                         III.  case study Based Questions
                             Read the extract given below and answer the questions that follows:
                            1.  Foreign trade creates an opportunity for the producers to reach beyond the domestic markets,
                              i.e., markets of their own countries. Producers can sell their produce not only in markets
                              located  within the country but can also compete  in markets located  in other countries of
                              the  world. Similarly, for the  buyers, import  of goods produced  in another  country  is one
                              way of expanding the choice of goods beyond what is domestically produced. 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.
                                (i)  What do you mean by opening of trade and how it is beneficial for consumers?
                              Ans.  Opening of trade means goods can travel freely across countries. Import and export
                                   of goods freely in the international market is opening of trade.
                                   It is beneficial for consumers in following ways:
                                     (i)  More choices of goods are available to consumers
                                     (ii)  Goods are of better quality now.
                                     (iii)  Competition has made goods comparatively cheaper for consumers.
                               (ii)  How does foreign trade become a main channel in connecting countries?
                              Ans.  Foreign trade created an opportunity for the producers and consumers to reach beyond
                                   the domestic markets through import and export of goods and services. Producers can
                                   sell their goods in international markets whereas buyers can also buy products produced
                                   outside their own country. They get more choices.


             E-106                                                                                      Economics  Class X
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