Distinguish between foreign trade and foreign investment.

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Chapter 4

NCERT

Class 10

Economics

Solutions

2. Distinguish between foreign trade and foreign investment.

Question:

Distinguish between foreign trade and foreign investment.

Answer:

Exchange of goods and services in two or more countries is called foreign trade. This includes imports and exports (including re-exports). Foreign investment means capital investment made by a country or a multinational corporation on industrial or other services such as land, buildings, machines and other equipment in one or several countries. Its objective is to get more dividends.

More NCERT Questions

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(All Q's of this Chapter solved)

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Choose the most appropriate option. (i) The past two decades of globalisation has seen rapid movements in

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Match the following. (i) MNCs buy at cheap (a) Automobiles rates from small producers

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Fill in the blanks. Indian buyers have a greater choice of goods than they did two decades back. This is closely associated with the process of ______________.

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Supposing you find two people arguing: One is saying globalisation has hurt our country’s development. The other is telling, globalisation is helping India develop. How would you respond to these arguments?

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Globalisation will continue in the future. Can you imagine what the world would be like twenty years from now? Give reasons for your answer.

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How does foreign trade lead to integration of markets across countries? Explain with an example other than those given here.

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How has liberalisation of trade and investment policies helped the globalisation process?

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“The impact of globalisation has not been uniform.” Explain this statement.

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Why do developed countries want developing countries to liberalise their trade and investment? What do you think the developing countries should demand in return?

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What are the various ways in which MNCs set up, control or produce in other countries?

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How would flexibility in labour laws help companies?

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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?

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What do you understand by globalisation? Explain in your own words.

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One of the present debates in India is whether companies should have flexible policies for employment. Based on what you have read in the chapter, summarise the point of view of the employers and workers.

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What can be done by each of the following so that the workers can get a fair share of benefits brought by globalisation?

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In what ways has competition affected workers, Indian exporters and foreign MNCs in the garment industry?

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Recent studies point out that small producers in India need three things to compete better in the market (a) better roads, power, water, raw materials,

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Should producers such as Ravi stop production because their cost of production is higher compared to producers in other countries? What do you think?

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What are the ways in which Ravi’s small production unit was affected by rising competition?

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In Chapter 1, we saw what may be development for one may be destructive for others. The setting of SEZs has been opposed by some people in India. Find out who these people are and why they are opposing it.

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Why do governments try to attract more foreign investment?

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Should more Indian companies emerge as MNCs? How would it benefit the people in the country?

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How has competition benefited people in India?

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In the above example, we saw that the US government gives massive sums of money to farmers for production.

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What do you think can be done so that trade between countries is more fair?

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Fill in the blanks. WTO was started at the initiative of __________countries. The aim of the WTO is to ____________________.

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Tax on imports is one type of trade barrier. The government could also place a limit on the number of goods that can be imported.

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What do you understand by liberalisation of foreign trade?

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How is information technology connected with globalisation? Would globalisation have been possible without expansion of IT?

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In the above example, underline the words describing the use of technology in production.

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Choose the correct option. Globalisation, by connecting countries, shall result in

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What are the various ways in which countries can be linked?

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What is the role of MNCs in the globalisation process?

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How will the import of steel from India into the Chinese markets lead to integration of markets for steel in the two countries? Explain.

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In recent years China has been importing steel from India. Explain how the import of steel by China will affect.

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What was the main channel connecting countries in the past? How is it different now?

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Read the passage on the left and answer the questions. Ford Motors, an American company, is one of the world’s largest automobile manufacturers with production spread over 26 countries of the world.

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Complete the following statement to show how the production process in the garment industry is spread across countries.

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