Page 122 - Understanding Economics for Class 10

6. Most employers prefer to employ workers ‘flexibly’ these days. What does this mean?
Ans. This means that workers’ jobs are no longer secure. Companies hire them for short periods
when there is intense pressure of work and after that they ask them to leave.

Goyal Brothers Prakashan
7. Why is fair globalisation essential?
Ans. It is essential to create opportunities for all and to ensure that the benefits of globalisation
are shared better.

8. Name some of the large Indian companies which have emerged as multinationals due to
globalisation.
Ans. Tata Motors (automobiles), Infosys (IT), ranbaxy (medicines), Asian Paints (paints), Sundaram
Fasteners (nuts and bolts).

9. Which regions are favourable for MNCs to set up production?
Ans. MNCs set up production where it is close to the markets, where there is skilled and unskilled
labour available at low costs and where the availability of other factors of production is
assured.

10. What is the contribution of improvement in transport technology to stimulate the era of
globalisation?
Ans. Improvements in transportation technology has made much faster delivery of goods across
long distances possible at lower costs.

11. What role does WTO play to liberalise trade?
Ans. WTO was started at the initiative of the developed countries. WTO establishes rules regarding
international trade, and sees whether rules are obeyed or not.

12. In which specific industries are MNCs interested?
Ans. MNCs have been interested in industries such as cell phones, automobiles, electronics, soft
drinks, fast food or services such as banking in urban areas.

13. Why are ‘Special Economic Zones’ being set up by Central and State Governments in India?
Ans. Special economic zones are being set up by central and state government to attract foreign
companies to invest in India.

14. What are the advantages of SEZ to MNCs?
Ans. Companies who set up production units in the SEZs do not have to pay taxes for an initial
period of five years. Government has allowed flexibility in the labour laws to attract foreign
investment.
15. How have top Indian Companies been benefitted in competition from MNCs?
Ans. They have invested in newer technology and production methods and raised their production
standards. Some have gained from successful collaborations with foreign companies.

V. short Answer type Questions
1. If Indian Government puts a tax on import of toys, how would it affect the import of Chinese toys?
Ans. If Indian Government puts a tax on import of toys then, those who wish to import these toys
will have to pay tax on this. Because of the tax, buyers will have to pay a higher price on
imported toys. Chinese toys will no longer be as cheap in the Indian markets and imports
from China will automatically reduce. Indian toy makers will prosper in this situation.

E-108 Economics Class X