Trade and Globalisation

social science
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Here you will find all the questions and solutions of chapter 4 Trade and Globalisation of Social Science of class 10 for students studying under the Nagaland Board of School Education (NBSE). However, the study materials should be used only for references and nothing more. The notes can be modified/changed according to needs.

INTRODUCTION: The making of a global world has a long history – of trade, people in search of work, migration, the movement of capital, and much more. As we think of the dramatic and visible signs of global interconnectedness in our lives today, we need to understand what globalisation is and the phases through which this world has emerged. Globalisation is the increasing interconnection of people and places as a result of advances in transport, communication and information technologies that cause political, economic and cultural convergence.

Globalisation is viewed as a century-long process, tracking the expansion of human population and the growth of civilisation that has accelerated in the past 50 years. Early forms of globalisation existed during the Roman Empire, the Parthian Empire and the Han dynasty, when the Silk Route started in China, reached the boundaries of the Parthian empire and continued onwards towards Rome. The Islamic Age is also an example when Muslim traders established a global economy resulting in the globalisation of crops, trade, knowledge and technology and later during the Mongol empire when there was greater integration along the Silk Road. Global integration continued through the sixteenth and seventeenth centuries when the Portuguese and the Spanish traders reached all corners of the world after expanding to the Americas.

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I. Multiple Choice Questions

1. ‘Globalisation’ today mainly refers to:

Answer: (c) An economic system that has emerged in the last 50 years

2. The decision-making in the IMF and the World Bank is controlled by:

Answer: (a) All the member-nations of these two banks.

3. Multinational Corporations (MNC’s) are

Answer: (b) Large companies that operate in several countries at the same time

4. The IMF was established on

Answer: (a) December 27, 1945

II. Very Short Answer Questions

1. Name the pioneer of mass production of cars.

Answer: Henry Ford was the pioneer of mass production of cars.

2. Who started the New Deal?

Answer: Franklin D. Roosevelt, President of the USA started the New Deal.

3. Name the Bretton Woods institutions.

Answer: The Bretton Woods institutions are International Bank for Reconstruction and Development (IBRD) or the World Bank and the International Monetary Fund (IMF).

4. What did the G-77 demand?

Answer: They demanded a new economic order (NEO).

III. Short Answer Questions

1. Define globalisation.

Answer: Globalisation can be defined as the process of worldwide coordination i.e., political, social, scientific, and cultural life of the people with free movements of capital, goods, technology, ideas etc. It aims at unifying the world at a physical and psychological level.

2. Define the term ‘migrant’.

Answer: The term ‘migrant’ refers to a person who travels from one region or country to another in order to find work for better living conditions.

3. What is the popular name of the international bank, set up for reconstruction and development?

Answer: The popular name of the international bank set up for reconstruction and development is the International Bank for Reconstruction and Development (IBRD).

IV. Long Answer Questions

1. Mention the two crucial influences that marked the post-war reconstruction.

Answer: The post-war reconstruction was marked by two crucial influences. First was the US’s emergence as a dominant political, economic and military power in the western world. The second was the dominance of the Soviet Union. It made huge sacrifices to defeat Nazi Germany and transformed itself from a backward agricultural economy into a world power when the world was trapped in the Great Depression.

2. List the chief features of the Bretton Woods system.

Answer: The chief features of the Bretton Woods system was to adopt a monetary policy that maintained the exchange rate of its currency within a fixed value – plus or minus one per cent – in terms of gold and the ability of the IMF to bridge temporary imbalances of payments.

3. Examine why the Great Depression was a catastrophic event for the USA.

Answer: The Great Depression was a catastrophic event for the USA for the following reasons:

i. The Great Depression was a period of unemployment, low profits, low prices on goods, high poverty and a stand-still trade market.
ii. With the fall in prices and the prospects of depression, the US banks also slashed domestic landings and all bank loans.
iii. Farmers were unable to sell their harvests.
iv. The number of unemployed started rising and by 1932, 12 million people were unemployed in the USA.
v. The USA suffered a drought in the agricultural centre of the country forcing the farmers to leave their lands and start a new life in California and other states.

4. What changes did Franklin D. Roosevelt’s New Deal bring about?

Answer: In 1933, Franklin D. Roosevelt, the new US President promised a ‘New Deal’. This introduced protection for people’s savings and new regulation of banks. Farm prices were supported and many programmes of construction were started to create employment.

5. Explain the causes of the Great Depression.

Answer: The Depression happened due to the following reasons:

i. Agricultural over-production was a problem, which was made worse by falling agricultural prices. Farmers tried to expand production and bring a larger volume of produce to the market to keep up their overall income. This worsened the surplus in the market pushing down prices even further.
ii. In the late 1920s, the price of shares in the USA had been forced up beyond their real value by reckless speculators.
iii. In October 1929, people started to sell shares rapidly. People began to panic. On a single day, 13 million shares were sold on the New York Stock Exchange. An economic crisis started which soon affected the whole world.

6. Write the factors that made the post-World War I recovery difficult for Britain.

Answer: Britain faced a long crisis. While Britain was pre-occupied with war, industries had developed in India and Japan. Moreover, Britain had borrowed liberally from the US. This meant that at the end of the war, Britain was over-burdened with huge external debts. The war had caused an economic boom. This meant that it resulted in large increases in demand, employment and production. When the war ended, production declined and unemployment increased. One in every five British workers was out of work in 1921.

7. Explain the impact of globalisation.

Answer: Following are some of the impacts of globalisation:

(i) In the garb of globalisation, poor and underdeveloped countries were forced to lift all non-tax restrictions on international trade and to cut customs duties to bring them to the international level. This benefited the developed countries and the underdeveloped counties suffered a loss of millions of dollars.
(ii) The developed countries talk about the free flow of finished products but object to the free flow of labour on the ground that it would increase the supply of labour in their country bring down wages and cause unemployment. But they turn an indifferent eye to the fact that in foreign countries the workers will fetch higher wages and improve their standard of life.
(iii) The experience of a number of developing countries tells that the developed countries are interested in investing in those sectors where the gestation period is short and returns are high and overall risk is little whether it is in the interest of the country concerned or not.
(iv) Financial assistance to poor countries is associated with adverse conditions. Because of low credit rating and high rate of inflation the rate of interest is higher. They have to pay a huge amount as interest on loans and consequently curtail expenditure on education and healthcare etc.
(v) The cut in customs duties harms the poor countries in two ways. First, it reduces revenue and makes it difficult for the government to run programmes for the welfare of the poor. Secondly, it promotes imports which are mainly luxury goods and the country’s valuable foreign exchange reserves begin to melt.
(vi) Another argument is that direct foreign investment will enhance opportunities for employment. But the experience of countries like Argentina, Chile etc. shows that instead of the above so called advantages, liberalisation has increased disparity of income and wealth distribution.

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