Kerala SSLC · Social Science · Class 10
Globalisation and the Indian Economy: Important Questions with Answers
These are 10 important multiple-choice questions from the Kerala SSLC Social Science chapter “Globalisation and the Indian Economy” (Kerala SCERT syllabus). Each one shows the correct answer and a short explanation of why it is right. Try answering before you read the answer. ExamSummary has 10 practice questions on this chapter in total.
Q1.Which of the following best describes the process of globalisation?
- A)The isolation of national economies from international markets
- B)The integration of economies through cross-border flow of goods, capital, and technology
- C)The strict imposition of high tariffs on all imported goods
- D)The complete nationalisation of private sector industries
Answer: B) The integration of economies through cross-border flow of goods, capital, and technology
Globalisation refers to the increasing interaction and integration among people, companies, and governments worldwide. It involves the free flow of goods, services, and capital across borders rather than isolation.
Q2.What is the primary reason Multinational Corporations (MNCs) set up production units in developing countries like India?
- A)To avoid paying taxes completely
- B)To take advantage of lower production costs and skilled labor availability
- C)Because they are forced to by the United Nations
- D)To export all their products without selling locally
Answer: B) To take advantage of lower production costs and skilled labor availability
MNCs establish factories in developing nations primarily to reduce costs. They seek access to cheaper raw materials, lower wages, and a large pool of skilled or semi-skilled labor compared to developed countries.
Q3.In which year did the Indian government introduce major economic reforms known as the New Economic Policy?
- A)1947
- B)1991
- C)2001
- D)1985
Answer: B) 1991
The landmark economic reforms were introduced in 1991 due to a balance of payments crisis. This period marked the beginning of Liberalisation, Privatisation, and Globalisation (LPG) in India.
Q4.What is the main function of the World Trade Organisation (WTO)?
- A)To provide loans to poor countries for infrastructure
- B)To regulate international trade and resolve trade disputes between nations
- C)To enforce environmental laws globally
- D)To manage military alliances between member states
Answer: B) To regulate international trade and resolve trade disputes between nations
The WTO acts as a forum for negotiating trade agreements and settling disputes between member countries. Its primary goal is to ensure that trade flows as smoothly, predictably, and freely as possible.
Q5.How did the introduction of flexible labour laws impact workers in the post-1991 era?
- A)It guaranteed lifetime job security for all employees
- B)It made it easier for employers to hire and fire workers based on demand
- C)It eliminated the need for any labor unions
- D)It reduced working hours to four hours a day
Answer: B) It made it easier for employers to hire and fire workers based on demand
Flexible labour laws allowed companies to hire workers on short-term contracts and dismiss them when not needed. While this helped companies adapt to market changes, it often reduced job security for workers.
Q6.What does the term FDI stand for in the context of foreign investment?
- A)Foreign Direct Investment
- B)Free Domestic Industry
- C)Financial Development Index
- D)Federal Direct Import
Answer: A) Foreign Direct Investment
FDI stands for Foreign Direct Investment, which occurs when investors from one country make physical investments into another country. This includes setting up businesses or acquiring assets.
Q7.Which of the following is a positive outcome of globalisation for consumers in India?
- A)Higher prices for all consumer goods
- B)Limited variety of products available in the market
- C)Access to better quality goods and more choices at competitive prices
- D)Complete ban on foreign brands in the retail sector
Answer: C) Access to better quality goods and more choices at competitive prices
Globalisation increases competition among sellers, leading to better quality products and more variety for consumers. Additionally, competition often drives prices down, making goods more affordable.
Q8.What was the primary objective of the Liberalisation policy introduced in 1991?
- A)To increase government control over all economic activities
- B)To remove restrictions and barriers on industrial and foreign trade
- C)To ban all imports from neighboring countries
- D)To return to a purely socialist economy
Answer: B) To remove restrictions and barriers on industrial and foreign trade
Liberalisation aimed to reduce the regulatory burden on the economy. By removing licensing requirements and reducing import duties, the government sought to open up the Indian economy to global competition.
Q9.Why do governments sometimes impose tariffs (taxes) on imported goods?
- A)To encourage citizens to buy foreign products exclusively
- B)To make foreign goods more expensive and protect domestic industries
- C)To reduce the quality of goods available in the market
- D)To eliminate all forms of international trade
Answer: B) To make foreign goods more expensive and protect domestic industries
Tariffs are taxes imposed on imports to make them more expensive compared to locally produced goods. This protects domestic industries from foreign competition and helps local manufacturers grow.
Q10.Which of the following sectors benefited most significantly from foreign investment after 1991?
- A)Only the agriculture sector
- B)Manufacturing and Service sectors
- C)Public sector banks only
- D)Traditional handicrafts only
Answer: B) Manufacturing and Service sectors
Post-1991 reforms opened up the manufacturing and service sectors to foreign players. Industries like automobiles, electronics, and telecommunications saw massive growth due to this influx of capital and technology.