Class 10 Economics Chapter 4 MCQ

This article is determined to provide you with Class 10 Economics Chapter 4 MCQ. These MCQs can be very helpful for your class 10 board exams. Use these to score well on your exams and achieve the best possible marks. I scored 98 in my Class 10 social science exams, and below I have provided the study materials for Class 10 economics that I personally used for my preparation of Class 10 Economics Chapter 1 MCQ. If you use these GLOBALISATION AND THE INDIAN ECONOMY Important MCQs, you can also get good marks.

CHAPTER 4 : GLOBALISATION AND THE INDIAN ECONOMY

Of course! Here is a comprehensive set of 60 questions based on the provided chapter on “Globalisation and the Indian Economy,” designed as per the CBSE pattern.

Table of Contents

1. What is a Multinational Corporation (MNC)?

(a) A company that operates only within one country.

(b) A company that owns or controls production in more than one nation.

(d) A company that only exports goods to other countries.

Answer: (b) A company that owns or controls production in more than one nation.

2. Why do MNCs set up offices and factories in regions with cheap labour?

(a) To help other countries develop.

(b) To ensure the cost of production is low and they can earn greater profits.

(d) Because there are no resources in their home countries.

Answer: (b) To ensure the cost of production is low and they can earn greater profits.

3. In the example of the MNC producing industrial equipment, where is the customer care carried out?

(a) The United States

(b) China

(d) India

Answer: (d) India

4. The money that is spent to buy assets such as land, building, and machines is called:

(a) Profit

(b) Revenue

(d) Savings

Answer: (c) Investment

5. When an investment is made by an MNC, it is called:

(a) Domestic investment

(b) Public investment

(d) Private investment

Answer: (c) Foreign investment

6. What is the most common route for MNC investments in other countries?

(a) Setting up new factories from scratch.

(b) Forming partnerships with the government.

(d) Providing loans to local companies.

Answer: (c) Buying up local companies and then expanding production.

7. Cargill Foods, a large American MNC, bought which smaller Indian company?

(a) Tata Foods

(b) Parakh Foods

(d) Britannia Industries

Answer: (b) Parakh Foods ¹⁰

8. What has been the main channel connecting countries for a long time?

(a) Foreign investment

(b) Foreign trade

(d) Movement of people

Answer: (b) Foreign trade

9. How does foreign trade create an opportunity for producers?

(a) It allows them to sell only in domestic markets.

(b) It allows them to reach beyond the domestic markets and compete in other countries.

(d) It guarantees profits for all producers.

Answer: (b) It allows them to reach beyond the domestic markets and compete in other countries. ¹³

10. The example of Chinese toys in the Indian market shows that as a result of trade:

(a) Indian toys became more expensive.

(b) Indian buyers had less choice.

(d) Indian toy makers made huge profits.

Answer: (c) Chinese toys became more popular due to cheaper prices and new designs. ¹⁵

11. What is the process of rapid integration or interconnection between countries called?

(a) Liberalisation

(b) Privatisation

(d) Globalisation

Answer: (d) Globalisation ¹⁶

12. Which has been a major factor that has stimulated the globalisation process?

(a) Stagnation in transportation technology.

(b) Rapid improvement in technology. 17

(d) Decrease in foreign investment.

Answer: (b) Rapid improvement in technology.

13. Which invention has led to a huge reduction in port handling costs and increased the speed of exports?

(a) Faster ships

(b) Larger airplanes

(d) Better roads

Answer: (c) Containers

14. What does IT stand for in the context of technology?

(a) Indian Technology

(b) Industrial Technology

(d) Internet Technology

Answer: (c) Information and communication Technology

15. A tax on imports is an example of a:

(a) Free trade policy

(b) Trade barrier

(d) Subsidy

Answer: (b) Trade barrier ²¹

16. Why did the Indian government put barriers to foreign trade and investment after Independence?

(a) To encourage imports from other countries.

(b) To protect producers within the country from foreign competition. 22

(d) To reduce the variety of goods in the market.

Answer: (b) To protect producers within the country from foreign competition.

17. What is the process of removing barriers or restrictions set by the government called?

(a) Globalisation

(b) Privatisation

(d) Nationalisation

Answer: (c) Liberalisation ²⁴

18. Around which year did India start making far-reaching changes in its trade policy, moving towards liberalisation?

(a) 1947

(b) 1960

(d) 2001

19. What is the aim of the World Trade Organisation (WTO)?

(a) To restrict international trade.

(b) To liberalise international trade.

(d) To provide loans to developing countries.

Answer: (b) To liberalise international trade.

20. In practice, the WTO rules have forced developing countries to remove trade barriers, while developed countries have:

(a) Also removed all their barriers.

(b) Unfairly retained trade barriers. 2828

(d) Left the WTO.

Answer: (b) Unfairly retained trade barriers.

21. Globalisation and greater competition have been of advantage to which group in India?

(a) All consumers equally.

(b) Small producers in rural areas.

(d) All workers in the unorganised sector.

Answer: (c) Consumers, particularly the well-off sections in urban areas. ³¹

22. MNCs have increased their investments in India in industries like cell phones, automobiles, and soft drinks because:

(a) These are traditional Indian industries.

(b) The government forced them to invest.

(d) There is no local competition.

Answer: (c) These products have a large number of well-off buyers.

23. Which of the following is an Indian company that has emerged as a multinational?

(a) Ford Motors

(b) Cargill Foods

(d) Tata Motors, Infosys, Ranbaxy

Answer: (d) Tata Motors, Infosys, Ranbaxy

24. Industrial zones set up to attract foreign companies to invest in India are called:

(a) Special Industrial Zones (SIZs)

(b) Special Economic Zones (SEZs)

(d) Export Processing Zones (EPZs)

Answer: (b) Special Economic Zones (SEZs) ³⁵³⁵

25. To attract foreign investment, the government has allowed flexibility in which laws?

(a) Tax laws

(b) Environmental laws

(d) Property laws

Answer: (c) Labour laws

26. For a large number of small producers and workers, globalisation has posed:

(a) Only new opportunities.

(b) No significant change.

(d) An increase in job security.

Answer: (c) Major challenges.

27. Why did Indian television companies, who were clients of small producers like Ravi, prefer to import components?

(a) The quality of imported items was better.

(b) The price of the imported item was half the price of locally produced items.

(d) There were no local producers.

Answer: (b) The price of the imported item was half the price of locally produced items.

28. Faced with growing competition, most employers these days prefer to employ workers ‘flexibly’, which means:

(a) Workers’ jobs are more secure.

(b) Workers’ jobs are no longer secure. 41

(d) Workers are paid higher wages.

Answer: (b) Workers’ jobs are no longer secure. ⁴²

29. To cut costs, Indian garment exporters often:

(a) Reduce the cost of raw materials.

(b) Cut labour costs by employing workers on a temporary basis.

(d) Refuse large orders from MNCs.

Answer: (b) Cut labour costs by employing workers on a temporary basis.

30. What does ‘fair globalisation’ mean?

(a) It would create opportunities only for developed countries.

(b) It would create opportunities for all and ensure the benefits are shared better. 45

(d) It would benefit only the rich and powerful.

Answer: (b) It would create opportunities for all and ensure the benefits are shared better. ⁴⁶

31. Who can play a major role in making globalisation more ‘fair’?

(a) Only MNCs

(b) The Government

(d) Only developed countries

Answer: (b) The Government

32. Until the middle of the 20th century, what primarily crossed the boundaries of countries?

(a) Production services

(b) Information technology

(d) MNC investments

Answer: (c) Raw material, food stuff, and finished products.

33. What two-fold benefit does a local company get from joint production with an MNC?

(a) Reduced taxes and less competition.

(b) Money for additional investments and the latest technology.

(d) Cheaper labour and more resources.

Answer: (b) Money for additional investments and the latest technology. ⁵¹

34. Ford Motors, an American company, came to India in 1995 and set up a large plant near which city?

(a) Mumbai

(b) Delhi

(d) Chennai

Answer: (d) Chennai

35. A limit on the number of goods that can be imported is known as a:

(a) Tariff

(b) Tax

(d) Subsidy

Answer: (c) Quota

36. Who has benefited from the greater competition among producers caused by globalisation?

(a) All producers equally.

(b) Small producers.

(d) All workers.

Answer: (c) Consumers.

37. How long do companies setting up production units in SEZs not have to pay taxes for?

(a) One year

(b) Two years

(d) Ten years

Answer: (c) An initial period of five years.

38. Besides the movement of goods, services, and technology, what is one more way countries can be connected?

(a) Through political alliances.

(b) Through the movement of people.

(d) Through similar climates.

Answer: (b) Through the movement of people.

39. How do large MNCs sell products made by small producers around the world?

(a) Under the brand name of the small producers.

(b) Under their own brand names. 60

(d) Only in the local markets of the small producers.

Answer: (b) Under their own brand names.

40. What is the basic function of foreign trade for buyers?

(a) To limit their choice of goods.

(b) To expand the choice of goods beyond what is domestically produced.

(d) To buy only locally produced goods.

Answer: (b) To expand the choice of goods beyond what is domestically produced.

41. The WTO was started at the initiative of:

(a) Developing countries

(b) The United Nations

(d) A group of African nations

Answer: (c) Developed countries

42. The US government paying massive sums of money to its farmers is an example of:

(a) A trade barrier retained by a developed country.

(b) A free and fair trade practice.

(d) A policy to reduce its exports.

Answer: (a) A trade barrier retained by a developed country.

43. Which factor has NOT seen much increase in its movement between countries in the past few decades due to restrictions?

(a) Goods

(b) Services

(d) Technology

Answer: (c) People

44. What enabled the Indian company to design a magazine for London readers and get paid instantly?

(a) Rapid transportation

(b) Liberalisation policies

(d) The World Trade Organisation

Answer: (c) Information and communication technology (Internet, e-banking)

45. Which industries have small manufacturers been hit hard by due to competition from globalisation?

(a) Iron and steel, automobiles

(b) Information Technology, banking

(d) Space technology, defense equipment

Answer: (c) Batteries, capacitors, plastics, toys.

46. How can the government make globalisation fairer?

(a) By removing all labor laws.

(b) By supporting small producers and negotiating for fairer rules at the WTO.

(d) By banning all imports.

Answer: (b) By supporting small producers and negotiating for fairer rules at the WTO.

47. Globalisation has been facilitated by rapid improvements in technology, pressures from international organisations like the WTO, and what other factor?

(a) Stricter trade and investment policies.

(b) Cultural isolation.

(d) A decrease in MNCs.

Answer: (c) Liberalisation of trade and investment policies.

48. What is a key result of greater foreign investment and greater foreign trade?

(a) Decreased competition among producers.

(b) Less choice for consumers.

(d) Isolation of national economies.

Answer: (c) Greater integration of production and markets across countries. ⁷⁷

49. For what reason are Mexico and Eastern Europe useful locations for MNC production?

(a) They have cheap manufacturing.

(b) They have highly skilled engineers.

(d) They have English-speaking youth for customer care.

Answer: (c) They are close to the markets in the US and Europe.

50. The example of the garment industry shows that while competition has allowed MNCs to make large profits, workers are:

(a) Given a fair share of the benefits.

(b) Given permanent and secure jobs.

(d) Paid very high wages.

Answer: (c) Denied their fair share of benefits.

Class 10 Economics Chapter 4 MCQ – Assertion and Reason Questions

Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:

(a) Both A and R are true and R is the correct explanation of A.

(b) Both A and R are true but R is not the correct explanation of A.

(d) A is false but R is true.

1. Assertion (A): A Multinational Corporation (MNC) is a company that owns or controls production in more than one nation.

Reason (R): MNCs set up production where they can get cheap labour and other resources to lower the cost of production and earn greater profits.

Answer: (a) Both A and R are true and R is the correct explanation of A.

2. Assertion (A): Foreign trade results in connecting the markets or integration of markets in different countries.

Reason (R): With the opening of trade, goods travel from one market to another, and producers in two countries closely compete against each other.

Answer: (a) Both A and R are true and R is the correct explanation of A.

3. Assertion (A): Rapid improvement in technology has been a major factor that has stimulated the globalisation process.

Reason (R): Improvements in transportation technology have made faster delivery of goods across long distances possible at lower costs.

Answer: (a) Both A and R are true and R is the correct explanation of A.

4. Assertion (A): The Indian government had put barriers to foreign trade and foreign investment after Independence.

Reason (R): This was considered necessary to protect domestic producers from foreign competition.

Answer: (a) Both A and R are true and R is the correct explanation of A.

5. Assertion (A): Though the World Trade Organisation (WTO) is supposed to allow free trade for all, in practice, developed countries have unfairly retained trade barriers.

Reason (R): The WTO was started at the initiative of developing countries to protect their interests.

Answer: (c) A is true but R is false.

6. Assertion (A): The impact of globalisation has not been uniform among producers and workers.

Reason (R): Globalisation has been advantageous to consumers, particularly the well-off sections in urban areas.

Answer: (b) Both A and R are true but R is not the correct explanation of A. (The reason explains the impact on consumers, not why the impact on producers and workers has been non-uniform).

7. Assertion (A): Special Economic Zones (SEZs) are being set up to attract foreign investment.

Reason (R): Companies who set up production units in the SEZs have to pay taxes for an initial period of five years.

Answer: (c) A is true but R is false.

8. Assertion (A): Globalisation and the pressure of competition have substantially changed the lives of workers, often making their jobs less secure.

Reason (R): Faced with growing competition, most employers these days prefer to employ workers on a permanent basis with full benefits.

Answer: (c) A is true but R is false.

9. Assertion (A): A large MNC can have tremendous power to determine price, quality, and labour conditions for distant, small producers.

Reason (R): MNCs often place orders with small producers for goods like garments and footwear and then sell these products under their own brand names.

Answer: (a) Both A and R are true and R is the correct explanation of A.

10. Assertion (A): Fair globalisation would create opportunities for all and ensure that the benefits are shared better.

Reason (R): Not everyone has benefited from globalisation; people with education, skill, and wealth have made the best use of the new opportunities.

Answer: (a) Both A and R are true and R is the correct explanation of A.

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