NCERT Solutions for Globalisation and The Indian Economy Chapter 4
Important Terms:
- Globalisation: Globalisation means free interaction of an economy with the economies of the rest of the world.
- Liberalisation: Liberalisation of the economy means to free it from direct or physical controls imposed by the government.
- Privatisation: Privatisation means allowing the private sector to set up industries which were earlier reserved for the public sector.
- World Trade Organisation (WTO): It is an organization that is in favor of increasing world trade through globalization.
- MNC: It is a company that owns or controls production in more than one country.
- Investment: The money that is spent to buy assets such as land, buildings, machines, and other equipment, is called investment.
- Foreign Investment: Investment made by MNCs is called foreign investment.
Question Bank for Globalisation and The Indian Economy
Very Short Answer Type Questions (1 Mark each)
Q.1 Mention any two features of Multinational Corporations.
A.(i) A MNC is a company that owns or controls production in more than one nation.
(ii) A MNC sells its finished products globally.
Q.2 State the basic cause which prompts MNCs to spread production across the borders.
A. Lower Cost.
Q.3 Why more and more MNCs are investing in China?
A. Because China provides the advantages of being a cheap manufacturing location.
Q.4 Why MNCs are setting their customer care centers in India?
A.Because they provide cheap educated English speaking youth who can provide customer care service and save 50% to 60% costs.
Q.5 What is an investment? [CBSE 2015 ,2016 (D)]
A. The money that is spent to buy assets such as land, building, machines, and other equipment is called investment.
Q.6 What is a foreign investment[CBSE 2016(D)]
A. Investment by citizens or the company of one nation to another nation is known as investment. The investment made by MNCs is also called foreign investment.
Q.7 How is production different in these days as compared to the middle of the 20%h century?
A. Until the middle of the twentieth century, production was largely organized within the countries, what crossed the boundaries of these countries were raw materials, foodstuff, and finished products. But now the production process is widely dispersed and spread out across the globe.
Q.8 Which MNC is the largest producer of edible oil in India? How has it become the largest producer?
A. Cargill, an American MNC is the largest producer of edible oil in India. It became the largest producer by buying Parakh Foods.
Q.9 Mention any two ways through which MNCs expand production.
A.(i) By setting up a partnership with local companies.
(ii) By buying the local companies.
Q.10 Suppose the Indian government puts a tax on the import of toys. What is its likely impact on imports?
A. I the government puts a tax on imports the buyer will have to pay a higher price for imports. So imports will fall.
Q.11 What far-reaching changes were made in India’s economic policy in 1991?
A. In 1991 the Indian government decided to introduce New economic policy of liberalization, globalization, and privatization. Under the new policy unwanted restrictions were removed from trade, industry, and the market.
Q.12 What is WTO ?
A. It is an international organization that was established to promote and liberate international trade.
Q.13 “Globalisation and greater competition among producers both local and foreign producers has been of advantage to consumers”.Justify.[CBSE 2016(D)]
A. There is a greater choice for the consumer who now enjoys the improved quality and lower prices for several products. As a result, people today enjoy much higher standards of living than was possible earlier.
Q.14 What is globalization?[CBSE 2016(D)]
A. Globalization is the process of integration of interconnection between countries.”Globalization allows the free flow of trade, capital, and human resource across borders.
Q.15 State any two factors responsible for globalization
A.(i)Growth of MNCs
(ii)Growth of technology
(i)Development in telecommunication and means of transportation.
Q.16 Why people usually move from one country to another?
A. People move to search for better income.better jobs or better education.
Q.17 Define liberalization.
A. Removing unwanted barriers or restrictions set by the government from trade and industry is known as liberalization.
Q.18 What are trade barriers ? Give one example.[CBSE 2015(O)]
A. Any kind of restriction which is imposed by the government of a country to check free flow of goods and services is known as trade barriers. For example, to check the free flow of Chinese today in the Indian market Indian government can impose a tax on imports.
Q.19 What is the importance of trade barriers for the government?
A. The government can use trade barriers to increase or decrease foreign trade and to decide what kinds of goods and how much of each, should come into the country.
Q.20 Name an organization whose aim is to liberate international trade.
A.World Trade Organisation.
Q.21 State any two steps which have been taken by the government to attract foreign investment.
A.(i) Special Economic Zones are being set up
(ii) The government has allowed flexibility in labor laws.
Q.22 Name any two Indian MNCs.
A.Tata Motors, Infosys, Asian Paints etc.
Q.23 Why do MNCs set up their offices and factories in those regions where they get cheap labor and other resources?[CBSE 2016(O)]
A. To lower the cost production.
Q.24 Due to which reason the latest models of different items are available within our reach?
A.Due to globalisation.
Short Answer Type Questions (3 Mark each)
Q.1 Why did ‘Ford Motor-Company ‘want to develop Ford India as supplying a base for its other plants across the globe?[CBSE 2014(D)]
A.(i) Large market: India is one of the largest markets of the world.
(ii)Lower cost of production: Due to the availability of cheap skilled as well as unskilled labor India offers a cost advantage.
(iii)Well connected: India is well connected with other Asian, European, and American markets through sea or land route.
Q.2 What are Multinational Corporations? Explain with the help of examples.
A.’A Multinational Corporation or an MNC is a company that owns or controls production in more than one country’.For example,Pepsi, Samsung, Onida, Glaxo, Ponds ,LG,etc.
The activities of MNCs are spread over many countries. Their parent corporation is located in one country and subsidiaries are scattered in many countries in the World. For example, ITT, a very large American MNC designs its products in research centers in the United States, and then the components are manufactured in China. These components are then shipped to Mexico and Eastern European countries where these are assembled and the finished products are sold all over the world. The company’s customer care is carried out through call centers located in India.
Q.3 Distinguish between foreign trade and foreign investment.
A.
| Foreign trade | Foreign investment |
| (i)Under foreign trade,goods and services travel from one country.
(ii)It result in connecting the markets or inte-gration of markets in different countries. |
(i)Under foreign invest-ment a MNC or a country invests in another country.
(ii)It promotes process of industrialization. |
Q.4 How have the Multinational Corporations changed the world economy? Explain.
A.(i) Before the entry of the MNCs, production was largely organized in a country.
(ii) Countries used to trade in raw materials, foodstuff, and finished goods.
(iii)But with the entry of the MNCs economic activities of companies are spread over many countries.
(iv)The goods and services are being produced globally.
Q.5 ‘Under a Multinational Corporation, the production is organized in increasingly complex ways.’ Explain.
A. (i) The production process of most of the MNCs is divided into small parts and spread out across the globe.
(ii) In most cases, research work is carried out in developed countries like the USA, Japan,u.k, etc.
(iii) The goods are manufactured and assembled in another country which has the cost advantage.
(iv) The companies prefer to set up customer care centers in the countries where cheap and skilled workers are available.
Q.6 How do the MNCs help in the growth of local companies?[CBSE March 2011,2013]
A.(i) Availability of modern techniques and management: Modern technology and managerial services are made available to the local companies or to be the host country. As a result, the productivity of the local enterprises increase and the resources are optimally utilized.
(ii) Capital: MNCs can provide capital (money and machines)for faster production. The MNCs, also keep the flow of work.
(iii) Market: MNCs are helping the total producers by expanding their market .e.., with the help of MNCs local producers can sell their product in the international market.
Q.7 “The Indian government, after independence, has put many such barriers on foreign trade and foreign investment.”Why was considered necessary?[CBSE 2008, March 2012, 2014(D)]
Or
What was the reason for putting barriers to foreign trade and foreign investment by the Indian government after Independence?[CBSE March 2011]
A.(i) To protect the producers within the country from the foreign competition: Industries was just coming up in the 1950s and the 1960s and competition from imports at that stage would not have allowed these industries to come up. Thus, India allowed imports of only essential items such as machinery, fertilizers, etc.
(ii) To establish basic industries: Some restrictions were levied to provide a boost to basic industries like iron and steel, coal, etc.
Around 1991, the government felt that it was the proper time for Indian producers to face competition and improve the quality of products in comparison to foreign producers.
(iii) To check the flow of goods: Governments can use trade barriers to increase or decrease foreign trade and to decide what kinds of goods and how much of each, should come into the country.
Q.8 How did the Indian companies gain after the trade barriers were removed by the government? Explain any three points[CBSE 2014]
A.(i) Expansion of Market: Removal of trade barriers has helped the local companies to expand their market.No local companies can sell their product in the international market.
(ii) Competition: Removal of trade barriers has developed the spirit of competition among the local companies.
(iii) Technology: With the removal of trade barriers the local companies are free to import modern technology. This has helped in lowering the cost of production.
Q.9 How do Multinational Companies (MNCs)control production? Explain any three points.[CBSE Comptt.(O)2008,2009(o)2010(o),March 2011]
Or
“There are a variety of ways through which MNCs spread their production.Explain.[CBSE 2014(O)2015(D),2016(O)]
A.(i) By joint venture: At, MNCs set up production jointly with some of the local companies. The benefit to the local company of such joint production is two-fold. First MNCs can provide money for additional investments, like buying new machines for faster production, Second, MNCs might bring with them the latest technology for production.
(ii) By buying local companies: The most common route for MNC investment is to buy up local companies and then to expand production.MNCs with huge wealth can quite easily do so.
(iii) By placing orders to small producers: There’s another way in which MNCs control production. Larger MNCs in developed countries place orders for production with small producers. Garments, footwear, sports items are examples of industries where production is carried out by a large number of small producers around the world.
Q.10 State any four drawbacks of globalisation.
Or
Give any three arguments against globalization.[CBSE 2014]
A.(i) Globalisation has failed to solve the problem of poverty.
(ii) Globalisation and the pressure of competition have substantially changed the lives of the workers. Faced with growing competition, most employers these days prefer to employ workers’ flexibly’.This means that worker’s jobs are no longer secure.
(ii) Only the rich and educated class has benefitted from globalization.
(iii) Only the rich and educated class has benefitted from globalization.
(iv) Globalisation has widened the gap between the rich and the poor.
Q.11 Mention any four features of Multinational Corporations.[CBSE March 2011]
A.(i) These companies own or control the production in more than one nation.
(ii) Production is organized in increasingly complex ways.
(iii) The production process is divided into small parts and spread out across the globe.
(iv) The companies have large sizes.
Q.12 Mention any of our locational factors of the MNCs.
Or
Describe any three factors that are required to set up MNCs.[CBSE 2014,2016(F)]
Or
What is meant by the term MNCs?Describe any four factors that are required to set up MNCs.[CBSE 2014]
A. It is a company that owns or controls production in more than one country.
Factors:
(i) Closeness to the market.
(ii) Availability of cheap, skilled, and unskilled workers.
(iii) Availability of other factors of production.
(iv) Favorable government policies.
Q.13 Mention some of the ways which the MNCs use to spread their production.
A. (i)By interacting with local producers in various countries across the globe.
(ii) By setting up a partnership with local companies.
(iii) By using the local companies for supplies.
(iv) By buying local companies.
Q.14 How has globalization affected the small producers? Explain.[CBSE 2014]
A. (i)For a large number of small producers and workers, globalization has posed major challenges.
(ii) Batteries, capacitors, plastics toys, tires, dairy products, and vegetable oil are some examples of industries where the small manufactures have been hit hard due to competition.
(iii) Several of the units have shut down rendering many workers jobless.
(iv) Many small companies have been purchased by the MNC.
(V) MNCs produce cheap goods so small producers have lost their local market.
Q.15 What is the importance of trade?
A. (i) It creates an opportunity for the producers to reach beyond the domestic markets.
(ii) Goods and services travel from one country to another.
Q.16 “A wide-ranging choice of goods are available in the Indian markets.”Support the statement with examples in the context of globalization[CBSE 2016(D)]
A. (i) The latest models of digital cameras, mobile phones, and televisions made by the leading manufacturers of the world are within our reach.
(ii) The Indian market is full of new models of automobiles.
(iii) The online shopping trend also increases the Indian consumers.
Long Answer Type Questions(4/5 Mark Each)
Q.1 ‘Multinational corporations interlink production across countries. Explain by giving examples. [CBSE 2008]
A. The activities of the MNCs are spread over many countries. Their parent corporation is located in one country and the subsidiaries are scattered in many countries in the world. For example ITT, a very large American MNC designs its products in research centers in the United States, and then the components are manufactured in China. These components are then shipped to Mexico and Eastern European countries where these are assembled, and the finished products are sold all over the world. The company’s customer care is carried out through call centers located in India. In the above example, research is carried out in the USA because the country has the Research and Development facilities. The goods are manufactured in China because of cheap manufacturing location. Mexico and Eastern European countries are useful for their closeness to the markets in the USA and Europe. The company has set up a company’s customer care center in Bengaluru because India provides cheap skilled engineers and workers.
Q.2 What are the advantages of Multinational Corporations?[CBSE 2014(D)
(i) Availability of capital and foreign investment: The Multinational Corporations or the MNCs help to solve the problem of capital and foreign investment of the underdeveloped and the developing countries suffer from lack of capital. Consequently, their rate of economic growth is low.MNCs set up factories and offices for production in these developing and underdeveloping countries and make huge investments. The money that is spent to buy assets such as land, building, machines, and other equipment is called investment.
(ii) Availability of foreign exchange: MNCs can be helpful in solving the problem of foreign exchange of underdeveloped and developing countries. In the 90s, India faced a huge shortage of foreign exchange but, with the entry of the MNCs today it has surplus foreign exchange reserves.
(iii) Promotion of Small –scale Industries” Most of the MNCs take help from small –scale and local industries in manufacturing Garments, footwear, sports items, etc. are examples of industries where the production is carried out by a large number of small producers around the world. The products are supplied to the MNCs which then sell these under their own brand names to the customers.
(iv) Foreign Trade and Integration of Markets: The MNCs help in the integration of world markets.With the entry of MNCs even the small countries have opened up their domestic markets for other foreign trade.
(v) Helpful in the growth of local producers: Foreign trade by the MNCs create an opportunity for the local producers to reach beyond the domestic markets,i.e markets of their own countries.
(v) Helpful in the growth of local producers: Foreign trade by the MNCs create an opportunity for the local producers to reach beyond the domestic markets,i.e, markets of their own countries.
(vi) Harmful for the environment: Many a time MNCs use the host country to dump harmful products in underdeveloped countries which severely harms the local environment.
Q.3 What are the disadvantages of Multinational corporations? Explain.
A.(i) Harmful for the host country: The main objective of the MNCs is to earn maximum profit. To achieve this objective, they invest their capital in underdeveloped and developing countries. These MNCs overexploit the natural resources of the host country. A big chunk of profit earned in the underdeveloped countries goes to the headquarters of the MNCs.
(ii) Harmful for the local producers: The MNCs place orders for production with small producers. The products produced are sold by the MNCs under their own brand names. The MNCs have tremendous power to determine manufacturing conditions for the local producers. The history has shown that most of the local producers have failed to compete with the MNCs, so either they have sold their units to the MNCs or have been wiped off.
(iii) Harmful for Economic Equality: The MNCs have been proved harmful for the goal of economic equality, in more than one way:
(a) Regional inequality has further aggravated because of them. The MNCs are interested in setting up industries in particular regions, and other regions remain undeveloped.
(b) The MNCs pay more salaries and perks to their employees than the employees of other companies. This widens the gap between the income of the laborers giving rise to economic inequality.
(iv) Harmful for freedom: The MNCs also prove detrimental to the economic and political freedom of the host countries. These dabble in the politics of the country. These corporations make all efforts to bring in to power in the host country, a political party that is favorably inclined to them. Thus, it is not possible for the rulers of the host countries to pursue nationalistic, economic, and political policies.
Q.4 Explain any three steps taken by the Central and State governments to attract foreign companies to invest in India.[CBSE 2014]
Or
How does Government attract foreign investment? Explain different ways?[CBSE 2011]
Or
How is the Government of India been taken by the Government of India to attract foreign investment in recent years?[CBSE 2012]
A.i) Government attracts foreign investment in the following ways: Special Economic Zones have been set up to have world-class facilities such as cheap electricity, water, road facilities such as cheap electricity. water, roads, transport, storage, recreational and educational facilities, etc.
(ii) Flexible labor laws: Labour laws are made flexible so that companies can hire workers easily.
(iii) Removal of trade barriers: The government has removed barriers to foreign trade and foreign investment so that goods could be imported and exported easily and also foreign companies could set up factories and offices in India.
(iv) The policy of liberalization and globalization: After 1991 the Indian government has adopted the policy of globalization and liberalization.
(v) Abolition of license: Under the New Economic Policy only a few industries need a license to operate.
Q.5 How do foreign trade play an important role in integrating the markets across the countries? Explain.[CBSE 2009(F),2010(O),2012(O)[March 2011,2014(F),2015(O),2016(F) ,2018(O)]
Or
Explain with examples how the opening up of foreign trade results in connecting the markets in different countries[CBSE March 2011]
A.(i) Main channel for connecting countries: Since time immemorial foreign trade has been the main channel connecting countries and the markets.
(ii) Expansion of the local market: To put it simply, 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 products not only in markets located within the country but can also compete in markets located in other countries of the world..
(iii) The better choice for the buyers: With the expansion of trade the choice of goods in variety and quality goods at cheaper rates. Similarly, for the buyers, the import of goods produced in another country is one way of is domestically produced. In general, with the opening of trade, goods travel from one market to another.choice of goods in the markets rises.
(iv) Impact on prices: With the expansion of the market the prices of similar goods in the two markets tend to become equal.
(v) Competition: With the expansion of markets tend to become equal.
(vi) Trade and globalization: Trade is the most important component of globalization. Trade has played a very important role in stimulating the process of globalization.
Q.6 ‘Rapid improvement in technology has been one major factor that has stimulated the globalization process.’ Explain.[CBSE 2008(F)]
“Information and communication technology has played a major role in spreading out production of services across countries.”Support the statement with suitable examples.[CBSE March 2012(O),2013(O),2016(F)]
Or
How has information and communication technology stimulated the globalization process? Explain with examples.[CBSE 2014]
A.(i) In the last 50 years, the world has witnessed a major improvement in transportation technology. Due to this, goods can be transported throughout the world in a short period of time, and at a lower cost.
(ii) Development in telecommunication computers, the internet, etc, has given a big boost to the process of globalization. Because of the modern facilities, it is very easy to access information instantly and to communicate from remote areas. Through the use of the internet, one can communicate across the world at negligible costs.
(iii) The use of IT helps to transfer data and other information.
(iv) The use of IT has helped the MNCs to expand its market throughout the world.
(v) A host of services such as data entry, accounting, administrative tasks, engineering are now being done cheaply in countries such as India, China, Brazil, etc.
(vi) A host of services such as data entry, accounting, administrative tasks, engineering are now being done cheaply in countries such as India, China, Brazil, etc.
(vi) Transfer of money acrossries.
(vii) To link the market
(viii) To set up customer care centers.
Q.7 What is liberalization? What steps were taken by the government to liberate the Indian economy?[CBSE March 2012]
Or
What is the meaning of the liberalization of foreign trade? What does it mean in the Indian context?
A. The liberalization of the economy means to free it from direct or physical controls imposed by the government”.Prior to 1991, the government of India has imposed many restrictions on the Indian economy like industrial licensing system, price control, import license, etc. All these restrictions were hampering the growth of the Indian industry. So in 1991, it was decided to lift all the unwanted restrictions. For this, the following steps were taken:
(i)All industries except three industries were exempted from any kind of industrial licensing.
(ii)Under the policy of liberalization, industries are free to expand and produce according to the need of the market.
(iii)Now producers are free to import the machinery and raw material from abroad.
(iv)Now the industry is also free to import modern technology from other countries.
Q.8 What is WTO? Mention its major aims. Mention its limitations.
Or
Write a note on the World Trade Organisation.[CBSE March 2012]
A. The WTO or the World Trade Organisation is an organization that deals with the rules of trade among the nations.
Aims of the WTO
(i)The major aim of the WTO is to conduct international trade among countries of the world in an open, uniform, and non-discriminatory manner.
(ii)The WTO or the World Trade organization also handles trade disputes.
(iii)The world Trade Organisation provides technical assistance and training to the developed and underdeveloped economies.
(iv)It forms rules and regulations which all the members have to adopt for the smooth running of trade.
Limitations:
Developed countries have unfairly retained trade barriers whereas WTO rules have forced the developing countries to remove trade barriers.
Q.9 What changes have occurred in India due to the adaptation of the policy of liberalization and globalization?[CBSE 2008 Comptt.(D),2018(O)]
Or
Explain any three benefits of globalization.[CBSE March 2012]
Or
How has globalization been advantageous to both the producers as well as the consumers in India? Explain.[CBSE March 2012(O),2014
Or
“Globalisation has been advantages to consumers as well as to producers.”Support the statement with suitable examples[CBSE 2014(O),(D)2015(O)]
Or
Analyze the role of globalization on the Indian economy.[CBSE 2014]
Or
Give five arguments in favor of globalization.[CBSE 2014]
A.(i)Variety of products: Due to the new Economic Policy, many MNCs have invested their capital in India.So the Indian consumers are getting variety and quality products at cheaper rates.
(ii)Development in the infrastructure: Due to the policy of globalization and privatization, the condition of infrastructure has improved considerably. Much progress can be seen in the communication sector. At present many private companies are providing better services to the consumers.
(iii) Boost to foreign direct investment: The policy of liberalization and globalization has provided a big boost to foreign direct investment in developing countries.
(iv)Boost to the Indian companies: Due to the policy of globalization and liberalization, the private sector has gained a big push. Now the private sector is free to import raw material and technology from other countries. Many restrictions on imports and exports have been lifted. Several top Indian companies have been able to benefit from the increased competition. Moreover, globalization has enabled some large Indian companies to emerge as multinationals themselves.Tata Motors(automobiles),info’s(IT),etc.
(v) Boost to service sector: Globalisation has also created new opportunities for companies providing services, particularly those involving information and communication technologies. Besides a host of services such as data entry, accounting, administrative tasks, engineering, etc. are now being cheaply done in our country, and are exported to the developed countries.
Q.10 What role can be government play in making globalization a success?
Or’ Suggest any three measures to make globalization just and fair?[CBSE March 2011]
Or
How can trade between countries be made fairer? Explain any three measures.[CBSE 2012
A.(i) The Government should prepare such policies that must protect the interest, not only of the rich and the powerful but of all the people in the country.
(ii) The government can ensure that labor laws are properly implemented and the workers get their rights.
(iii)The government can reserve some items exclusively for the small-scale and local producers.
(iv)If necessary, the government can use trade and investment barriers like a quota system, imports, duties, etc.
(v)It can negotiate with WTO for fairer rules.
(vi)It can align with other developing countries with similar interests to fight against the domination of developed countries in the WTO.
Q.11 Explain the impact of globalization and MNCs on workers.[CBSE 2009(F), March 2011]
A.(i) Globalisation and the pressure of competition have substantially changed the lives of workers. Faced with growing competition, most employers these days prefer to employ workers ‘flexibly’.This means that workers’ jobs are no longer secure.
(ii)Because of globalization and MNCs only skilled and educated workers have gained. Earlier a factory used to employ workers on a permanent basis, now MNCs employ workers’only on a temporary basis.
(iii)Workers have to put in very long working hours and work night shifts on a regular basis during the peak season.
(iv) While this competition among the garment exporters has allowed the MNCs to make large profits, workers are denied their fair share of benefits brought about by globalization.
(v)Moreover, conditions of work in the organized sector have come to resemble the unorganized sector
.Workers in the organized sector no longer get the protection and benefits that they enjoyed earlier.
Q.12 Describe the impact of globalization on the Indian economy with example.[CBSE 2016 (O),(F)Comptt.]
A.(i) Indian buyers have a better choice of toys at a lower price.
(ii) For the Chinese toy markers this provides an opportunity to expand the business.
(iii) Indian toy markers are facing tough competition and are facing losses.
(iv) Globalisation has failed to solve the problem of poverty.
(v) Globalisation and pressure of competition have substantially changed the lives of the workers. Faced with growing competition, most employers these days prefer to employ, workers ‘flexibly ‘.This means that workers’ jobs are no longer secure.
Q.13 What way is an MNC different from the national companies? Highlight any three points of distinction.[CBSE 2012]
A.
| MNCs | Other companies |
| (i)These companies own and controls production in more than one nation.
(ii)Production is organized in a complex way. (iii)They have the capacity to invest a huge amount. (iv)Pepsi,Samsung,Apple etc.are some MNCs. |
(i)These companies own or control production within the boundary of nation.
(ii)Production is organized in a simple way. (iii)They have limited capacity to invest. (iv)HMT,jk Tyres etc. |
Q.14 Explain the role of multinational corporations in the globalization process.[CBSE 2014(D),2016(D)]
Or
“MNCs are playing an important role in the globalization process.”Justify the statement by giving any five suitable arguments.[CBSE 2012]
Or
How have MNCs helped in globalization?[CBSE 2012]
Or
Explain the role of MNCs in the process of globalization.
A. Availability of capital and foreign investment: The Multinational Corporations or the MNCs help to solve the problem of capital and foreign investment of the underdeveloped and the developing countries most of the underdeveloped countries suffer from lack of capital. Consequently their rate of economic growth is low.MNCs set up factories, and offices for the production in these developing and underdeveloping countries, and make huge investments. The money that is spent to buy assets such as land, buildings, machines, and other equipment, is called investment.
(ii) Availability of foreign exchange: MNCs can be helpful in solving the problem of foreign exchange of the underdeveloped and a huge shortage of foreign exchange but, with the entry of the MNCs, today it has surplus foreign exchange reserves.
(iii) Foreign Trade and Integration of Markets: The MNCs help in the integration of world markets .with the entry of MNCs of world markets .with the entry of MNCs even the small countries have opened up their domestic increase the foreign trade.
(iv) Helpful in the growth of local producers: Foreign trade by the MNCs create an opportunity for the local producers to reach beyond the domestic markets i.e, markets of their own countries.
(v) By spreading production activities: MNCs spread their production activities in different parts of the world. For example they design their products in the United States or Japan, then manufacture it in China where cheap labor is available and customer care is carried out through call centers located in India as India provides cheap skilled as well as unskilled workers.
NCERT EXERCISE of Globalisation and The Indian Economy
Q.1 What do you understand by globalization? Explain in your words.
A. Refer Q.No.14 Very short Answer Type Questions.
Q.2 What were the reasons for putting barriers to foreign trade and foreign investment by the Indian government? Why did it wish to remove these barriers?
A. The government had put barriers to protect the producers withing the country from foreign competition. During that period, the Indian industry was at an initial stage of development, and competition from imports at that stage would not have allowed these industries to come up.
(i)These barriers were removed to make Indian companies more efficient.
(ii)To make the Indian companies are free to import new technology and raw materials.
(iii)The decision to remove trade barriers was supported by international organizations like IMF, WTO, etc.
Q.3 How would flexibility in labour laws help companies?[CBSE March 2011]
A.(i)Due to the flexibility of labor laws now companies can hire workers flexibly i.e .., for a short period.
(ii)Now the companies can hire the workers on contract.
(iii)Flexibility in labor laws reduces the cost of labor for the company.
Q.4 What are the various ways in which MNCs set up or control, production in other countries?
A. Refer Q, No 9, Short Answer Type Questions.
Q.5 Why do developed countries want the developing countries to liberalize their trade and investment? What do you think should the developing countries demand in return?
A.(i) Developed countries wanted to invest in developing countries to earn a high rate of returns.
(ii)According to be developed countries, trade barriers are harmful as they hinder the growth of trade and investments.
The developed countries demand that all the developing countries should liberate their trade, but they themselves have retained trade barriers. The developing countries should align with other developing countries with similar interests to fight against the domination of the developed countries. They should negotiate with the WTO and other organizations for ‘fairer rules’.
Q.6 ‘The impact of globalization has not been uniform.’ Explain this statement.[CBSE March 2011]
A. Refer to HOTS Questions 6.
Q.7 How has liberalization of trade and investment policies helped the globalization process?[CBSE March 2011]
A. Refer Q.No.3 HOTS Questions.
Q.8 How does foreign trade lead to the integration of markets across countries? Explain with an example other than those given here.
A. Refer Q.No.5 Long Answer Type Questions.
Q.9 Globalisation will continue in the future. Can you imagine what the world would be like twenty years from now? Give reasons for your answer.
A. Students should write themselves.
Hints. (i)Global Village
(ii) Fast means of transportation and communication.
(iii) Improvement of the service sector.
Q.10 Supposing you find two people arguing: One is saying globalization has hurt our country’s development. The other is telling globalization is helping India to develop. How would you respond to three arguments?
A. Students should write themselves.
Q.11 Fill in the blanks:
Indian buyers have a greater choice of goods than did two decades back. This is closely associated with the process of……………………………….. Markets in India are selling goods produced in many other countries. This means there is an increasing……………………………………………….with other countries, Moreover, the rising number of brands that we see in the markets might be produced by the MNCs in India.MNCs are investing in India because…………………………while consumers have more choices in the market, the effect of the rising …………………………………….and………………………………has meant greater…………………………….among the producers.
A. Indian buyers have a greater choice of goods than did two decades back. This is closely associated with the process of globalization. Markets in India are selling goods produced in many other countries. This means there is increasing interaction with other countries. Moreover, the rising number of brands that we see in the markets might be produced by the MNCs in India.MNCs are investing in India because they hope to get high profits. While consumers have more choices in the market the effect of rising of trade and commerce has meant greater competition among the producers.
Q.12 Match the following:
| A | B |
| (i)MNCs buy at cheap rates from small producers
(ii)Quotes and taxes on imports are used to regulate trade. (iii)Indian companies who have invested abroad. (iv)It has helped in spreading of production of services. (v)Several MNCs have invested in setting up factories in india for production. |
(a) Automobiles
(b)Garments, footwear, sports items. (c)Call centres (d)Tata Motors, Infosys, Ranbaxy (e)Trade barriers. |
A. (i) b; (ii) (e),(iii)(d),(iv)(c),(v)(a)
Q.13 Choose the correct option:
(i) The past two decades of globalization have seen rapid movements in:
(a)Goods, services, and people between the countries.
(b)Goods, services, and investments between the countries.
(c)Goods, investments, and people between the countries.
A.(c)Goods, investments, and people between the countries.
(ii)The most common route for investments by the MNCs in countries around the world is to:
(a)set up new factories
(b)of people in the developed countries.
(c)of workers in the developing countries
(d)none of the above.
A.(b)of people in developed countries.
Higher-order Thinking Skills (Hots) Questions
Q.1How have Indian markets been transformed in recent years? Explain with examples.[CBSE 2013(D),2014 (O),2015(D),2016(F)]
Or
“Presently our markets have been transformed.”Support the statement with suitable arguments.[CBSE 2016(F) Comptt.]
A.(i)Expansion through MNCs: The Indian market has been transferred by MNCs.Many MNCs of different countries like Coca Cola, Samsung are selling their products in India whereas Indian MNCs like Ranbaxy, Tata, Reliance are selling their products in the world market.
(ii) Expansion through trade: Foreign trade creates an opportunity for the producers to reach beyond the domestic markets,i.e. markets of their products not only in markets located within the country but can also compete in markets located in other countries of the world.
(iii)Globalisation and liberalization: The Indian market is also expanding because of the new economic policy of the Indian government,i.e globalization, and liberalization. Under this policy various trade barriers have been removed.
(iv) World Trade Organisation: The Indian market is also expanding through WTO as India is one of the founder members of WTO. The main aim of WTO is to liberate world trade.
Q.2 How did ‘Cargill Foods’become the largest producer of edible oils in India?Explain[CBSE 2014(F)
A.Cargill Foods, a very large American MNC, has bought over smaller Indian companies such as Parakh Foods. Parakh Foods had built a large marketing network in various parts of India, where its brand was well-reputed. Also, Parakh Foods had four oil refineries, whose control has now shifted to Cargill is now the largest producer of edible oil in India, with a capacity to make 5 million pouches daily.
Q.3 Liberalisation of trade and investment policies promote globalization. Explain.
Or
“Liberalised policies of government have enabled globalization. Support your answer with three policies of the government.[CBSE 2012]
A. Globalisation means free interaction of an economy with the economies of the rest of the world.
(i)Removal of trade barriers: under the policy of liberalization Indian government has removed various restrictions from the import and export of goods and services. Now MNCs are free to import goods in India and Indian companies are free to export goods and services abroad.
(ii) Liberalisation of investment: Under this policy MNCs are free to invest in India. Many MNCs have invested in banking, infrastructure, soft drink, automobiles, etc. Even the Indian government has created Special Economic Zones which provide electricity, road transport, and other facilities.
(iii)New Technology: The process of liberalization has brought new technology in India which has promoted globalization information and communication technology has played a major role in spreading out the production of services across countries.
Q.4 What are Special Economic Zones? Why have they been set up?
A.1)SEZs are special Economic Zones where world-class facilities like water, electricity, roads and transport, recreation, education are available. They aim to attract foreign companies to invest in India.
(2)(i) They have been set up to attract foreign companies to invest in India.
(ii)Companies with production units in the SEZs do not have to pay taxes for the initial period of 5 years.
(iii) The government has also allowed flexibility in the labor laws to attract foreign investment.s
Question Bank
Very Short Answer Type Questions(1 Mark each)
Q.1 How do the producers and consumers participate in the market?
A.(i) Consumers participate in the market when they purchase goods and services that they need.
(ii)Producers participate in the market when they sell their goods and services to the consumers.
Q.2 Mention any four ways through which consumers are exploited.
A.(i)High price
(ii)Adulteration
(iii)Underweight
(iv) Selling off poor quality goods.
Q.3 Mention any two factors responsible for consumer movement.
A.(i) Due to dissatisfaction of the consumer as many unfair practices were being indulged in by the sellers.
(ii)There was no legal system available to consumers to protect them from exploitation in the market place.
Q.4 Mention the factors which gave birth to the consumer movement in India.
A.Food shortage ,hoarding ,black marketing,adulteration of food etc.
Q.5 Name an Act which enacted to protect the consumers.
A.The consumer protection Act.1986.
Q.6 Why do we still find bad quality products in the market?
A.Because the supervision of the rules is weak and the consumer movement is also not strong enough.
Q.7 Define the Right to Information Act.
A. The RTI is a which ensures citizens of India to get all the information about the functioning of government departments.
Q.8 Identify the right:
(i) You are dissatisfied with the services of a private airline .You file a case in the district consumer forum.
(ii)Your friend has been sold a medicine that has crossed the expiry date.
A.(i)Right to Seek Redressal
(ii)Right to safety.
Q.9 Name the courts which have been set up under COPRA.
A.(I)District Consumer Courts.
(ii)State Consumer Courts.
(iii)National consumers Courts
Q.10 Name the court to which a consumer can approach if:
(i)The consumer has a claim of rupee 40 lacs.
(ii)The consumer has claim of more than rupee 1 core.
A.(i)State Consumer Court.
(ii)National Consumer Court.
Q.11 When is National Consumers’ Day celebrated in India ? Give reason.
- A. India has been observing 24th December as the National Consumers’Day. It was on this day that the Indian Parliament enacted the Consumer Protection Act in 1986.
Q.12 What are the final goods?
A. The goods which are consumed by the consumers are known as final goods.
Q.13 Who is a consumer?
A. Anyone who purchases goods and services from the market and pays for these is known as consumers.
Q.14 Who is a producer?
A. Anyone who produces goods and services and sells these in the market is known as producers.
Q.15 Which major step was taken by the government in 1986 to protect the exploitation of the consumers.
A.The Consumer Protection Act 1986.
Q.16 Under which right the consumers have the right to know about the particulars of goods and services that they purchase?
A. Right to be Informed.
Q.17 If a consumer is defined his/her rights under which consumer right he/she can approach the consumer court?
A. Right to Seek Redressal.
Q.18 Define consumer forums.
A. There are organizations that work for the rights of consumers and guide them about their rights and also guide them on how to file cases in the consumer courts.
Q.19 What are District Level Courts which are set up under COPRA?
A. These are the courts that provide justice to the consumers at the district level and deal with cases involving claims up to rupee 20 lakhs.
Q.20 What are State Level Courts which are set up under COPRA?
A. These are the courts that provide justice to the consumers at the State Level and deal with the cases involving claims between rupee 20 Lakhs and rupee 1 core.
Q.21 What are National Level Courts which are set up under COPRA?
A. These are the courts that provide justice to the consumers at the national level and deal with the cases which have been dismissed at the district or state level or involving claims more than rupee crore.
Q.22What is COPRA?
A.COPRA is the consumer Protection Act. The Act was passed in 1986 to protect the interest of the consumers in the market.
Q.23 Suppose your parents want to purchase Gold jewelry along with you; then which logo will you look for on the jewelry?[CBSE 2015(O)2016(F)]
A. Hallmark.
Q.24 Which logo would you like to see for purchasing electrical goods?[CBSE 2015(D)]
OR
Which logo will you like to see on the electric heater to be sure of its quality?[CBSE 2016(F)]
A.[ISL]Mark.
Q.25 What is meant by standardization? [CBSE 2015]
A. Standardization is the process of developing and implementing technical standard which can help to maximize compatibility, safety, or quality of the product.
Q.26 If any damage is done to a consumer by a trade, under which consumer right can one move to consumer court to get compensation?[CBSE 2016(O)]
A. Right to seek redressal.
Q.27 Suppose you have to buy a packed bottle of drinking water in your journey. Which logo will you like to see to be sure about its quality?[CBSE 2016(D)]
A.ISI Mark.
Q.28 Why is the maximum retail price printed on products?[CBSE 2016(F)Comptt.]
A. To avoid the exploitation of consumers.
Q.29 If you are not interested to buy a brush with toothpaste but shopkeeper denied selling tooth-paste only. In this case which consumer right is being violated by the seller?[CBSE 2016(F)]
A. Right to choose.
Short Answer Type Questions (3Mark each)
Q.1 ‘Markets do not work in a fair manner when producers are few and powerful, whereas consumers purchase in small amounts, and are scattered .’ Explain.
Or
How do large companies manipulate the market? Explain with examples.[CBSE 2016(F)]
A.(i)Large companies can manipulate the market like control of price and supply.
(ii) They can pass false information to the consumer.
(iii) They can sell substandard goods.
Q.2 What were the factors responsible for arousing the consumer movement?[CBSE 2008 Comptt.(O)]
OR
Explain any three factors responsible for arousing the consumer movement?[CBSE 2012 Comptt.(O)]
Or
“The consumer movement arose out of dissatisfaction of the consumers.”Justify the statement with arguments.[CBSE 2016(O)]
Or
How did consumer movement originate as a ‘Social force ‘in India? Explain[CBSE 2014]
OR
Why is it said that the consumer movement in India originated as a ‘social force’?Explain.[CBSE 2015]
A.(i)The consumer movement arose out of the dissatisfaction of the consumers as many unfair practices were being indulged in by the seller.
(ii)Before the ’80s there was no legal system available to the consumers to protect them from exploitation in the marketplace for a long time. when a consumer was not happy with a particular brand product or shop, he or she generally avoided buying that brand or product or would stop purchasing it from that shop.
(iii)It was presumed that it was the responsibility of the consumers to be careful while buying a commodity or service, and the seller has no responsibility.
(iv)Unfair trade practices, food shortage hoarding, and black marketing also encouraged the consumer movement.
Q.3 Explain the Right to safety as a consumer right?
A.while using goods and services, we as consumers have the right to be protected against the marketing of goods, and delivery of services that are h hazardous to life and property, Producers need to strictly follow the required safety rules and regulation. There are many goods and services that we purchase that require special attention to safety. For example, pressure cookers have a safety valve which, if defective can cause a serious accident. The manufactures of the safety valve have to ensure high quality. Consumers also need public or government action to see that this quality is maintained.
Q.4 (i) Explain the Right to choose as consumer’s right.[CBSE March 2010,2013(o),2014(F)]
(ii)Explain the Right to seek Redressal as a consumer right.[CBSE March 2010,2013(D),2015(O)]
Or
Explain with an example of how we can use the right to seek redressal’ against unfair trade practices and exploitation?[CBSE 2014(F)]
(i) Consumers have the right to assess the variety of goods and services at competitive prices.In the case of a single supplier, the consumers have the right to be assured of satisfactory quality and services at a fair price. This right gives the consumer surety that no producer can force him/her to purchase a particular brand or product.
(ii) This is the most important right. The consumer has the right to seek redressal against unfair trade practices and exploitation. If any damage has been done to the consumer, he/she has the right to get compensation depending upon the degree of damage.
Q.5 What are consumer forums? What is its importance?[CBSE 2008, March 2011]
Or
Mention any three functions of consumer protection councils.[CBSE 2014]
A. The consumer movement in India has led to the formation of various organizations locally known as Consumer Forums or Consumer Protection Councils. They guide the consumers on how to file cases in the consumer courts.
On many occasions they also represent individual consumers in the consumer courts. The voluntary organizations also receive financial support from the government for creating awareness among the people.
Q.6 Explain the circumstances under which markets do not work in a fair manner.[CBSE March 2012(O),2015(D)]
A. Markets do not work in a fair manner when producers are few and powerful whereas consumers purchase in small amounts and are scattered. This happens especially when large companies with huge wealth, power, and reach can manipulate the market in various ways. At times false information is passed on through the media, and other sources to attract consumers. For example, a company for years sold powder milk for babies all over the world as the most scientific product claiming this to be better than mother ‘s milk.
Q.7 How do we participate in the market as producers and consumers? Explain with two examples.[CBSE 2013(D)]
A.i) Producers: Most of us participate in the market as producers of goods and services .when we produce a good by exploiting natural resources.it is an activity of the primary sector. Since most of the natural products we get are form agriculture, dairy, fishing, forestry, this sector is also called agriculture and related sector. The natural products are changed into other forms through ways of manufacturing that we associate with industrial activity. The tertiary is activities that help in the development of the primary and secondary sectors. These activities, by themselves, do not produce goods but they are an aid or support for the production process. For example, goods that are produced in the primary or secondary by trucks or trains and then sold in wholesale and retail shops.
(ii)Consumers: Consumers participate in the market when they purchase goods and services that they need. These are the final goods that people as consumer use.
Q.8 What is Consumers International? How did it come into being?[CBSE 2015]
A.(i)Consumers international is an Umbrella body of 240 organizations from over 100 countries for consumers’ movement.
(ii)(a)In 1985, the United Nations adopted the UN Guidelines for Consumer Protection. This was a tool for nations to adopt measures to protect consumers and for consumer advocacy groups to press their government to do so.
(v)At the international level, this has become the foundation for consumer movement. Today consumer movement. Today, Consumers inter-national has become a leader of 240 international organizations.
Also See: NCERT Solutions for Money and Credit Chapter 3
Long Answer Type Questions (4/5 Mark each)
Q.1 What is consumer exploitation? What are the various ways in which a consumer can be exploited? [CBSE 2008(D),2009(O)][March 2011,2012,2016(o)]
Or
“Exploitation of consumers happens in three major ways in the marketplace.”Support this statement.[CBSE 2008 Comptt.(D),2014(D ]
It is a situation in which a consumer is cheated by the producer.
(i)High prices: There can be some articles in the market without the MRP (Market Retail Price)In this case, the trader can charge a price higher than the price prevailing in the market because of the ignorance and urgency of the customer.
(ii)Underweight and under-measurement: By their cleverness, some traders stoop so low that they cheat the customers by resorting to underweight and under-measurement tactics.
(iii) Substandard quality: Some traders or sellers sell substandard quality products to the consumer. Nowadays, markets are full of duplicate products.
(iv) Adulterated and impure products: Inedible items such as oil, ghee, and spices, adulteration is made in order to earn higher profits. This causes financial and health loss to the consumers .you You may have heard people dying because of adultered wine.
Q.2 What factors gave birth to the consumer movement in India? Trace its evolution.[CBSE 2009(D) ,March 2011,2014(o)]
Or
How did consumer movement originate as a social force in India? Explain.[CBSE 2014(O)(D)]
A.(i) In India, the consumer movement as a social force’ originated with the necessity of protecting and promoting the interest of consumers against unethical and unfair trade practices.
(ii) Food shortages, hoarding black prices,etc.birth to the consumer movement in an organized form in the 1960s.
(iii)At the initial stage, consumer organizations were largely engaged in writing articles and holding exhibitions. They formed consumer groups to look into the malpractices in ration shops and overcrowding in the road passenger transport.
(iv) More recently India witnesses an upsurge in the number of consumer groups. This is because of more and more cases of consumer exploitation by private traders. The activities of various consumer forums forced the government to enact the Consumer Protection Act,1986, popularly known as the COPRA.
Q.3 Explain the ‘Right to the informed ‘as a consumer right.[CBSE 2013(O)]
A. The consumers have the right to know about the quality, quality, quantity, and price of goods and services, batch number, date of manufacture, expiry date, and the address of the manufacture, expiry date, and the address of the manufacturer. This right has been provided to the consumer so that the consumer can approach the courts if cheated.
No producer can sell a product without providing proper information about the product. It is the duty of the manufacturer to provide all the information about the product to the consumer.
Q.4 Name the act under which the consumer courts have been established. What is the importance of these courts?
- A. Consumer courts have been established under the Consumer Protection Act,1986.
| Consumer Courts |
| National Level |
| State Level |
| District Level |
| National Consumer Commission |
| State Consumer Commission |
| District Forum |
The most important feature of the Consumer Protection Act is the provision of a three-tier system, popularly known as the consumer courts.
(i)These courts look into the grievances and complaints of the consumers against the traders and manufacturers and provide the necessary relief and compensation.
(ii)These courts are required to dispose of each complaint within three months.
(iii)These courts reduce the burden on other courts like the High Court, District Court, and the Supreme Courts.
Q.5 What is the three-tier quasi-judicial machinery set up for redressal of consumer disputes? Mention their jurisdiction.[CBSE 2009(F)2014,(D)]
Or
Briefly explain the three-tier quasi-judicial machinery set up under the Consumer Protection Act of 1986.[CBSE March 2011,2012]
Or
What are the institutions set up under COPRA for the redressal of grievances? Explain[CBSE March 2011]
A. Under the consumer protection Act, 1986 or the COPRA three-tier quasi-judicial machinery of the district state and national levels was set consumer disputes.
(i)District LeveL: The district-level court deals with the cases involving claims up to rupee 20 lakh.
(ii)State Level: The state-level courts deal with the cases between rupee 20 lakh and rupee 1 crore, and the national level court deals with cases involving claims exceeding rupee 1 crore.
(iii)National Level: The national-level courts deal with cases involving claims exceeding rupee 1 crore. If a case is dismissed in the district level court the consumer can also appeal in the state and then in the national-level courts. Thus the Act has enabled us as consumers to have the right to represent in the consumer courts.
Q.5 Explain the limitations of the consumer redressal process in India.[CBSE 2012]
Or
How is the consumer redressal process becoming cumbersome, expensive, and time-consuming? Give four reasons.[CBSE 2010(O),March 2011,2012,2014(O)]
Or
State any three problems faced during the consumer redressal process in India.[CBSE March 2012]
A.(i)The consumer redressal process is cumbersome expensive and time-consuming.
(ii) Many times, consumers are required to engage lawyers. These cases require time for filling and attending the court proceedings, etc.
(iii)In most purchases, cash memos are not issued hence evidence is not easy to gather.
(iv)Most purchases in the market are small retail sales. The existing laws also are not very clear on the issue of compensation to the consumers created by defective products.
Q.7 What is standardization? Name any two agencies responsible for the standardization of products in India.
A. Under the standardization of products, the government lays minimum standards for the products. It develops food standards, guidelines, and codes of practice for production, distribution, and selling. For maintaining the minimum standard, the government has created various institutions.
(i)Through standardization of products the government tries to protect the consumers from lack of quality and the varying standard of goods.
(ii)The government of India has established two agencies to check the quality and standard of the products.
(a)Bureau of Indian Standards: The Bureau of Indian standards has the responsibility of laying down the standards for industrial and consumer goods on a scientific basis, and certifying the goods that meet the standard and the prescribed quality.
(b)Agmark: It is implemented under the Agricultural Produce Act,1937, as amended in 1986. This scheme is run by the Directorate of Marketing and intelligence (DMI)in the Ministry of Agriculture, Government of India. Products, such as honey and spices carry such marks.
Q.8 Explain the rights of the consumer as enshrined in the Consumer Protection Act of 1986.[CBSE March 2011]
A. The Consumer Protection Act, 1986 is one of the most important legal measures in protecting the rights of the consumers.
(a)Right to safety: The consumers have the right to be protected against the marketing of goods and services which are hazardous to life and property.
(b)Right to be Informed: The consumers have the right to know about the quality quantity and price of goods and services.
(c)Right to choose: Consumers have the right to assess the variety of goods and services at competitive prices. In the case of a single supplier, the consumers have the right to be assured of satisfactory quantity and service at a fair price.
(d)Right to be Heard: The consumer’s interest should receive due consideration at appropriate forums relating to consumer welfare.
(e)Right to Seek Redressal: Consumers have the right to get their claims settled in their favor in case of being cheated and exploited by the producer.
Q.9 “Consumer movements can be effective only with the active involvement of the consumers.”Support this statement with two arguments[CBSE 2008(F),2014]
Or
“Consumer awareness is essential to avoid exploitation in the marketplace.”Support the statement.[CBSE 2016(D)]
A.(i)The consumers should realize their role and importance.
(ii) It requires a voluntary effort and struggles involving the participation of one and all.
(iii)Consumers must know their rights while purchasing goods and services.
(iv)They should look at the quality of products and date of expiry etc.
(iv)They should ask for a cash memo and warranty card for the items purchased.
(v)Consumers must be aware of their duties.
Q.10 Describe the two features each of consumer’s right to safety’ and right to represent’.
A. (I) while using many goods and services, we as consumers have the right to be protected against the marketing of goods and delivery of services that are hazardous to life and property.
(ii)Producers need to strictly follow the required safety rules and regulations.
(iii)There are many goods and services that we purchase, require special attention to safety.
Right to represent:
(I)Under COPRA, three-tier quasi-judicial machinery at the district, state, and national levels was set up for redressed of consumer disputes.
(ii)If a case a dismissed in district level court, the consumer can also appeal in state and then in National level courts.
Q.11 how is a consumer benefitted by the right to the informed? [CBSE March 2011]
Or
Explain the consumer’s right to be informed with an example. [CBSE 2012]
A. (I) Information about good like cars geysers to medicines and food products safeguard the consumer against exploitation.
(ii)Consumers can complain and ask compensation in the case of wrong information or promises.
(iii)It makes the manufacturer responsible for what he is manufacturing.
(iv)The right also covers access to information from government departments.
(v) This keeps us informed about the progress of any work and makes the government departments answerable.
(vi) It also helps to get the files to move faster and the work may be done faster.
Also See: NCERT Solutions for Sectors of the Indian Economy Chapter 2
NCERT EXERCISE
Q.1 “There is a need for rules and regulations in the marketplace ‘.Analyze the statement.
Or
Why are the rules and regulations required in the marketplace? [CBSE 2013(D), 2014(O), 2016(F)]
(I) Weak consumers: Without rules and regulations, a consumer will be without any weapon to fight against the sellers. Individual consumers often find themselves in a weak position due to weak rules and regulations. Whenever there is a complaint regarding a good and service that had been bought, the seller tries to shift all the responsibility on the buyer.
(ii)Exploitation of the consumers: Exploitation in the marketplace happens in various ways. For example, sometimes trader indulges in unfair trade practices such as when the shopkeepers weigh less than what they should or when traders add charges that were not mentioned before, or when adulterated/defective goods, or when adulterated/defective goods are sold. To protect consumers from such a situation, rules and regulations are required.
(iii) Unfair market: Markets do not work in a fair manner when producers are few and powerful, where as consumers purchase in small amounts and are scattered. This happens especially when large companies are producing these goods. These companies with huge wealth, power, and reach can manipulate the market in various ways.
(iv) False information: At times, false information is passed on through the media and other sources to attract consumers.
Q.2 What factors gave birth to the consumer movement in India? Trace its evolution.
A. Refer Q. No. 2, Long Answer Type Questions.
Q.3 Explain the need for consumer consciousness by giving two examples.
A. Refer Q. No .1, Long Answer Type Questions.
Q.4 Explain a few factors which cause the exploitation of the consumers.
Or
What is meant by consumer exploitation? Identify any three factors which encourage the traders to adopt unfair practices. [CBSE 2014]
A. When consumers in the marketplace are treated unfairly by the producers or shopkeepers so as to make money or gain an advantage, it is called consumer exploitation.
(I)Limited information: In a capitalist economy, producers and sell goods and services according to the demand and supply of the market. There is no regulation on the prices. In such cases, providing the full and correct information about the product to consumers is of great importance. In the absence of information about different aspects of the products namely price, quality aspects of the products namely price, quality, composition, conditions of use, terms of purchase, etc, the consumers are liable to make a wrong choice, and lose money.
(ii)Wrong information: Companies spend a considerable amount on advertisements alone to attract consumers, and feed information they want the consumers to know, but not the information the consumers want about the products.
(iii)Limited competition: Due to underdevelopment of industry, there is a lack of competition in the market. This may lead to exploitation of the consumer.
(iv) Literacy and ignorance of the consumers: In most of the developing and underdeveloped economies, the illiteracy rate is very high, so consumers can be easily cheated by the producers.
(v)Few sellers: Markets do not work in a fair manner when producers are few and powerful. If the producers are powerful. If the producers are powerful are few and powerful. If the producers are powerful, they can control the price, quality, and supply.
Q.5 What the rationale behind the enactment of the Consumers Protection Act, 1986?
A. (i) to establish three-tier quasi-judicial machinery.
(ii)To make the consumers aware of their rights and duties.
(iii)To minimize the exploitation of consumers.
Also See: NCERT Solutions of Development Class 10 Economics Chapter 1
Q.6 Describe some of your duties as consumers if you visit a shopping complex in your locality.
A. Refer Q.No.2, HOTS Questions.
Q.7 Suppose you buy a bottle of honey and a biscuit packet. What logo or mark you will have to look for and why.
A. A consumer should look for the logo of ‘A-Mark ’.The presence of a logo on the product means it has been verified and tested and there is no scope for adulteration or low quality or quantity.
Q.8 what legal measures were taken by the government to empower the consumers in India?
A.(1) Consumer Courts: These are courts that have been established under the Consumer Protection Act,1986 at the district, state, and national level for the protection and promotion of consumer interest, and to redress their grievances in a speedy, simple and inexpensive manner.
(2)Standardization:
(i)Through standardization of products, the government tries to product the consumers from lack and varying standard of goods.
(ii)The Government of India has established two agencies to check the quality and standard of the products.
(a) Bureau of Indian Standards.
(b) A-Mark.
(a)Bureau of Indian Standards: has the responsibility of laying down the standards for industrial and consumer goods on a scientific basis, and certifying the goods that meet the standards and the prescribed quality.
(b) A-Mark: is implemented under the Agricultural Produce Act, 1937 as amended in 1986. This scheme is run by the Directorate of Marketing and Intelligence (DMI) in the ministry of Agriculture, Government of India. Products, such as honey, and spices carry such marks.
Q.9 Mention some of the rights of the consumers and write a few sentences on each.
A. Refer Q.No.8, Long Answer Type Questions.
Q.10 By the means can the consumers express their solidarity? [CBSE 2014]
Or
How can consumer awareness be spread among consumers to avoid exploitation in the market place? Explain any three ways. [CBSE 2018(O)]
(I) by forming Consumer Forums: The consumer movement in India has led to the formation of various organizations locally known as consumer forms or consumer protection councils. They guide consumers’ protection councils. They guide consumers on how to file cases in consumer court. On many occasions, they also represent individual consumers in consumer courts. These voluntary organizations also receive financial support from the government for creating awareness among the people.
(ii)By forming organized groups: There are today more than 700 consumer groups in the country. Though only a few are organized but even unorganized groups are also playing a very important role in awakening the consumers.
(iii) Consumers Day: 24th December is celebrated as National Consumers’ Day. The day also binds consumers from different regions.
(iv) Role of media: Media is also playing a very important role in binding the consumer’s Media to highlight various issues related to consumer exploitation.
(v) Consumers International: It is the world federation of a consumer group that serves as the only independent and authoritative global voice for consumers. It is based in London, England.
Founded on 1 2 April 1960, currently, with over 220 member organizations in 115 countries around the world, the organization continues to build a powerful international movement to empower and protect consumers everywhere.
Q.11 Critically examines the progress of consumer movement in India.
A. Refer Q.No.2, Long Answer Type Questions.
Q.12 Write True or False:
(I)COPRA applies only to goods.
(ii)India is one of the many countries in the world which has exclusive courts for consumers redressed.
(iii)When a consumer feels that he has been exploited he must file a case in the District Consumer Court.
(iv)It is worthwhile to move to the consumer courts only if the damages incurred are of high value.
(v)The Hallmark is the certification maintained for the standardization of jewelry.
(vi)The consumer has the right to get compensation depending on the degree of the damage.
A.(I)False (ii)False (iii)True (iv)False (v)True (vi)False (vi)True.
Q.13 Match the following:
| A | B |
| (i)Availing details ingredients of a product
(2) Agmark (3) Accident due to faulty engine in a scooter. (4)District Consumer Court. (5) Consumers International (6)Bureau of Indian standards. |
(a)Right to safety.
(b)Dealing with consumer cases. (c)Certification of edible oils and cereals. (d) Agency that develops standard for goods and services. (e)Right to information. (f)Global level institution of consumer welfare organization. |
A. [1-e]; [2-c]. [3-a], [4-b], [5-f], [6-d]
Higher Order Thinking Skills (Hots) Questions
Q.1 What is consumer exploitation? Explain by giving examples which law protects the consumers from this? [CBSE 2014]
A. (I) When consumers, in the marketplace, are treated unfairly by the producer or shopkeepers so as to make money or gain an advantage, it is called consumer exploitation.
(ii) For example, sometimes, traders weigh less than they should.
(iii) They add charges that were not mentioned before.
(iv) Also, they sell adulterated goods and resort to hoarding and black marketing.
(v) They sell sub-standards goods and duplicate articles.
(vi) Besides they make false claims about the durability and quality of goods.
(vii)The Consumer Protection Act (COPRA), 1986 protects consumers from exploitation in the marketplace.
Q.2 How does the logos and certification on cover helps the consumers to buy standardized products?
A. (I) The logos and certification on cover help consumers get assured of quality while purchasing the goods and services because these are issued by the government organization.
(ii) The organization that monitors and issues these certificates allows producers to use their logos provided they follow certain quality standards.
(iii) For some products that affect the health and safety of consumers or of products of mass consumption like LPG cylinders, food colors, and additives, cement, packaged drinking water, it is mandatory on the part of the producers to get certified by these organizations.
Q.3 Describe two incidences showing the need for rules and regulations to ensure the protection of the consumers. [CBSE 2014]
A. (I) Power Milk: A company for years sold power milk for babies all over the country as the most scientific product. It even claimed its product to be better than the mother’s milk. As we all know it has been scientifically proved that mother’s milk is the best milk. The company has been making false claims.
(ii)Cigarette Smoking: For most of the past 100 years manufacturers used to claim that their products were not injurious to health.
Q.4 How can consumer get compensation if a complaint goes to the consumer court? IIIustrate the whole procedure with suitable examples. [CBSE 2014]
A. Procedures for filing complaints and seeking redressed are simple. There is no for filing a complaint before the District Forum, the state Commission, or the National Commission. (A stamp paper is also not required).Three to five copies of the complaint on plain paper are required to be submitted by the complainant or his authorized agent in person or could be sent by post to the appropriate Forum/Commission.
A complaint should contain the following information:
(a)The name, description, and address of the complainant.
(b)The name, description, and address of the opposite party or parties, as the case may be, as far as they can be ascertained.
(c)The facts relating to the complaint and when and where it arose.
(d)Documents, if any in support of the allegations contained in the complaint.
(e)The relief which the complaint and when and where it arose.
The complaint should be signed by the complainant or his authorized agent.
The complaint to be filed within two years from the date on which cause of action has arisen.
Q.5 What is meant by the Right to Choose? Mention three situations in which it is violated. [CBSE 2015]
Or
Explain with an example of how one can exercise the ‘Right to Choose’. [CBSE 2014]
A. The right to choose means that any consumer who receives a service in whatever capacity, regardless of age, gender, and nature of service, has the right to choose whether to continue to receive the service.
Violation:
(I)Sometimes gas supply dealers insist the consumer buy the stove from them when a new connection is taken. So when we are forced to buy things that we may not wish to, our right to choice is denied. In this case a consumer can refuse to buy the gas connection.
(ii) Many a time shopkeepers insist consumers purchase a toothbrush with toothpaste. You can deny buying the toothpaste.
(iii) Sometimes a bookseller may insist you buy a geometry box or other supplementary material with books. You can refuse to buy supplementary material.
Q.6 Why is there a need for rules and regulations to save the consumers? [CBSE 2008, 2010(D)]
Or
Why are the rules and regulations required for the protection of consumers’ interest in the marketplace? Explain any two reasons. [CBSE March 2011]
A. (I)To check adulteration: Consumer awareness is also a must because at times, greedy traders begin to play with the health of the people by indulging in adulteration of edible oils, milk butter, ghee, etc.
(ii)Privatization: After 1991, the Government of India has withdrawn itself from most of the productivities, and allowed the private sector to take over. So it was felt that there is a greater need to enforce discipline and regulations in the market and to make the consumers aware not only of the commercial aspects of sale and purchase of goods but also the health and security aspects.
(iii) To check powerful producers: Market does not work in a fair manner when producers are few and powerful whereas consumers purchase in small amounts and are scattered. So rules are required to check these powerful producers.
(iv)False information: Most of the time false information is passed to the consumers through media and other sources to attract the consumers.
(v)To provide compensation: Rules and regulations are required to provide compensation to the exploited consumers. In India consumer courts have been established to provide justice to the consumers.
Q.7 Mention any four duties of a consumer. [CBSE March 2011, 2012]
A. (I) while purchasing the goods, a consumer should look at the quality of the product, the market price, guarantee, or the warranty period.
(ii) A consumer should preferably purchase standardized products which contain the seal of ISI or the A-Mark.
(iii) A consumer should ask for a cash memo and a warranty card.
(iv)A consumer must be aware of his rights and duties.
(v) The consumer should form consumer awareness organizations which can be given representation in various committees formed by the government and other bodies in the matters relating to the consumers.
(vi)He should know the method of how to proceed if he is cheated.
Q.8 When is the National Consumers’ Day celebrated in India every year? Describe the importance of this day. [CBSE 2012]
A. (I) India has been celebrating 24 December as the National Consumers’ Day.
(ii) This is because it is on this day the Indian Parliament enacted the Consumer Protection Act, in 1986.
(iii) (A) India is one of the countries that have exclusive courts for consumer redressed.
(b)There are more than 700 consumer groups in our country of which 20-25 groups are well-organized and recognized for their works.
Q.9 how can consumer awareness be spread among consumers to avoid exploitation in the market place? Explain any three ways. [CBSE 2018(O)]
OR
Highlight any three values which may really make a consumer more alert and wide awake in the market. [CBSE 2014]
Or
Which values make consumers more conscious and vigilant? Explain. [CBSE 2015]
A. (I)Self –awareness: Consumers should know about their rights and duties. Awareness is the first step in the creation process. They should purchase quality marked products, ask for cash memos, and make complaints about genuine grievances.
(ii)Responsibility: It means taking care of one duty. We evaluate people of groups as responsible or irresponsible depending on how seriously their responsibilities.
(iii) Voluntary participation: Consumer movements require a voluntary effort and struggle involving the participation of one and all. There is a scope for consumers to realize this role and importance.
