Sunday, 6 March 2016

     CONSUMER RIGHTS       

NCERT INTEXT QUESTIONS

Page 77
Q.1     What are the various ways by which people may be exploited in the market?Sol.     Some of the ways by which people may be exploited in the market are as follows:
           1. The shopkeeper may underweigh an item.
           2. Things past their use by date may be sold.
           3. White goods with some manufacturing defects may be sold.
           4. Automobiles with engine defects may be sold.

Q.2     Think of one example from your experience where you thought that there was some ‘cheating’ in the market. Discuss in the classroom.Sol.     When I buy fish, I always doubt that he underweighs the fish. I have cross-checked at my home and found my doubt to be true. Whenever I have tried to argue with the fish-seller, he tends to become too aggressive.
Q.3     What do you think should be the role of government to protect consumers?Sol.     Government should formulate rules and regulations so that producers should maintain a certain minimum level of quality. Government should enforce rules regarding weights and measures. Any company which makes false claims about a product should be immediately brought to book. Cases relating to consumer complaints should be solved at a faster pace.

Page 78
Q.1     What could have been the steps taken by consumer groups?Sol.     Consumer groups should increase public awareness about consumer rights. Consumer groups should see to it that every case regarding consumer complaint reaches its logical conclusion.

Q.2     There may be rules and regulations but they are often not followed. Why? Discuss.Sol.     There are various reasons for rules and regulations not being followed. Public apathy is the biggest reason. We; as consumer; try to avoid confrontation over trivial issues and most of the cases go unreported. Corruption is another reason, which allows the culprit to go scot free. Unnecessary delay in the proceedings also works as de-motivator for many people.

Page 79
Q.1     For the following (you can add to the list) products/services discuss what safety rules should be observed by the producer?           (a) LPG cylinder            (b) Cinema theatre            (c) Circus            (d) Medicines            (e) Edible oil            (f) Marriage pandal            (g) A high-rise building 
Sol.     (a) Rules regarding safety
           (b) Rules regarding fire safety 
           (c) Rules regarding fire safety and ethical treatment for animals
           (d) Rules regarding expiry date, information of ingredients and side effects
           (e) Rules regarding food safety
           (f) Rules regarding fire safety
           (g) Rules regarding fire safety and provisions for evacuation in case of emergency           

Q.2     Find out any case of accident or negligence from people around you, where you think that the responsibility lay with the producer. Discuss.Sol.     Recently, one of my neighbours purchased a car. The steering system of the car was defective. The driver was lucky to survive a minor accident with small injuries. Within a few days of that accident the car company announced a recall of about 50,000 cars to rectify the problem.

Page 80
Q.1     When we buy commodities we find that the price charged is sometimes higher or lower than the Maximum Retail Price printed on the pack. Discuss the possible reasons. Should consumer groups do something about this?Sol.     This often happens with packaged milk and cold drinks. The shopkeeper charges Re. 1 extra and says that he needs to recover the cost of electricity because he needs to keep them in freezer. Sometimes, the shopkeepers give discount on MRP for clearing excess stock. While selling at a price less than the MRP is beneficial for the consumer, overcharging should be dealt with properly. Consumer groups should take notice of this problem. We can also ask for cooperation from RWAs (Resident Welfare Association).

Q.2     Pick up a few packaged goods that you want to buy and examine the information given. In what ways are they useful? Is there some information that you think should be given on those packaged goods but is not? Discuss.Sol.     On most of the packs, information regarding ingredients, adverse events and use by date is given. All the items should display a toll-free number on which a consumer can contact in case of a complaint or feedback.

Q.3     People make complaints about the lack of civic amenities such as bad roads or poor water and health facilities but no one listens. Now the RTI Act gives you the power to question. Do you agree? Discuss.Sol.     RTI act has definitely helped in extracting information from civic authorities. Many activists have gathered information about road, water and health facilities and have used such information to pressurize the civic authorities. This has helped in some extent to improve the condition but a lot more needs to be done.

Page 82
Q.1     The following are some of the catchy advertisements of products that we purchase from the market. Which of the following offers would really benefit consumers? Discuss.           (a) 15 gm more in every 500 gm pack.           (b) Subscribe for a newspaper with a gift at the end of a year.
           (c) Scratch and win gifts worth Rs 10 lakhs.
           (d) A milk chocolate inside a 500 gram glucose box.           (e) Win a gold coin inside a pack.           (f) Buy shoes worth Rs 2000 and get one pair of shoes worth Rs 500 free.Sol.     Freebies which can be instantly claimed are always beneficial for the consumer. But promise of some prize; like gold coin or Rs. 10 lakh; are just eyewash. Till date I have never heard of someone winning Rs. 10 lakh after buying a bottle cold drink.
Page 86
Q.3     What is the difference between consumer protection council and consumer court?Sol.     The consumer protection council promotes and protects the various rights of the consumer. The consumer court is made to hear the cases regarding a consumer complaint. Consumer protection council is an advisory body, while consumer court is a quasi judiciary body.
Q.4     The Consumer Protection Act 1986 ensures the following as rights which every consumer in India should possess              1. Right to choice.           2. Right  to information.           3. Right to representation.           4. Right to redressal.           5. Right to representation.           6. Right to safety.           7. Right to consumer education.
           Categories the following cases under different heads and mark against each in brackets.
           (a) Lata got an electric shock from a newly purchased iron. She complained to the shopkeeper immediately.Sol.     Right to safety, right to representation
           (b) John is dissatisfied with the services provided by MTNL/BSNL/TATA INDICOM for the past few months. He files a case in the District Level Consumer Forum.Sol.     Right to representation
             (c) Your friend has been sold a medicine that has crossed the expiry date and you are advising her to lodge a complaintSol.     Right to representation
             (d) Iqbal makes it a point to scan through all the particulars given on the pack of an item that he buys.Sol.     Right to information, Right to education
             (e) You are not satisfied with the services of the cable operator catering to your locality but you are unable to switch over to anybody else.
Sol.     Right to choice
             (f) You realise that you have received a defective camera from a dealer. You are complaining to the head office persistently.Sol.     Right to representation, Right to redressal 

Q.5     If the standardisation ensures the quality of a commodity, why are many goods available in the market without ISI or Agmark certification?Sol.     There are many companies which do not opt for these certifications. They may be trying to save some money. They may not be confident of their quality. It is difficult to implement rules and regulations at all levels.

Q.6     Find out the details of who provides Hallmark and ISO certification.Sol.     In India, Hallmark is provided by BIS (Bureau of Indian Standards) which is the national standards organization of India. Hallmark is given to gold and silver jewelry in India. ISO (International Standards Organisation) is an international body with headquarters at Geneva, Switzerland. It was founded in 1947.

EXERCISE QUESTIONS

Q.1     Why are rules and regulations required in the marketplace? Illustrate with a few examples.Sol.     Rules and regulations are required so that markets function in smooth and just manner. Profit maximization is the prime motive of any business. Rules and regulations ensure that the profit does not come at the cost of the quality of life of the consumer. In our day-to-day life, we can see many instances of food adulteration. The milk seller, the sweet-meat seller, etc. usually adulterate the food items they sell. It is important to stop such practices by enforcing proper rules.

Q.2     What factors gave birth to the consumer movement in India? Trace its evolution.
Sol.     India had a long tradition of malpractices in business; such as food adulteration, hoarding, underweighing, etc. Right from the 1960s, various consumer associations came into origin. They began to raise public awareness and to fight to consumer protection. As a result of consumer movement, the COPRA was finally enacted in 1986.

Q.3     Explain the need for consumer consciousness by giving two examples.Sol.     Many people seldom bother to check the MRP and pay whatever the shopkeeper demands. While developing a faith on the neighbourhood shopkeeper is a good attitude, but one should always check the MRP. Some people do not even check the expiry date on the pack of a medicine. This can prove to be dangerous and can even be life threatening for the patient who is going to consume the medicine. These examples suggests that there is a real need for consumer consciousness.
Q.4     Mention a few factors which cause exploitation of consumers.Sol.     Some of the factors which cause exploitation of consumers are as follows:           1. Lack of awareness among consumers.           2. Greed of businessperson.           3. Lax enforcement of rules.           4. Slow and time taking process of consumer grievance redressal.
Q.5     What is the rationale behind the enactment of Consumer Protection Act 1986?Sol.     Protection of consumers against exploitation was the main rationale behind the enactment of Consumer Protection Act 1986.

Q.6     Describe some of your duties as consumers if you visit a shopping complex in your locality.Sol.     While visiting a shopping complex, I should check if proper parking facility is available or not. I should check for the presence of fire fighting equipments. I should check if any item beyond its expiry date is lying on the shelf. I should ensure that billing calculation is correct.
Q.7     Suppose you buy a bottle of honey and a biscuit packet. Which logo or mark you will have to look for and why?Sol.     I will look for AGMARK logo. This logo shows that food safety norms have been followed while making these items.

Q.8     What legal measures were taken by the government to empower the consumers in India?Sol.     The government enacted COPRA in 1986 to empower the consumers in India. After that, the government opened consumer courts at various levels so that people can register their complaints.

Q.9     Mention some of the rights of consumers and write a few sentences on each.Sol.     Some of the rights of consumers are as follows: Right to information: A consumer has the right to be informed about the ingredients, expiry date and adverse events related to the product. Right to choice: A consumer has the right to choose from among various options. For example; when someone goes to buy a pen, he has the right to compare various brands so that he can make an informed buying decision. Right to seek redressal: If a consumer is not satisfied with the product or services he buys, he has the right to seek redressal. Many companies have a dedicated section for consumer complaint and feedback. Apart from that, the consumer can also go to a consumer court if he feels that the seller is not willing to solve his problem.

Q.10     By what means can the consumers express their solidarity?Sol.       Consumers can become part of a consumer group to help fellow consumers. A consumer can also do his own bit in raising consumer awareness. This can be done by taking out poster campaigns, by writing letter to editor, by writing blog, etc.

Q.11     Critically examine the progress of consumer movement in India.Sol.       The consumer movement began in India out of a desire to fight the tradition of exploitation at the hands of sellers. There was no legal framework to protect the interest of consumers. It was only after a two decade long struggle that the government set up the consumer courts. Still many cases of consumer complaint remain pending for long years. It takes about 20 to 30 years to decide on court cases. The consumer movement is still not powerful enough to take on the powerful business lobby and a lot more needs to be done.

 Q.12    Match the following.
Column-IColumn-I
1. Availing details of ingredients of a
product		(a) Right to safety
2. Agmark(b) Dealing with consumer cases
3. Accident due to faulty engine in a
scooter		(c) Certification of edible oil and cereals
4. District Consumer Court(d) Agency that develop standards for goods
and services
5. Consumer International(e) Right to information
6. Bureau of Indian Standards(f) Global level institution of consumer welfare
organizations
Sol. 1-(e), 2- (c), 3-(a), 4-(b), 5-(f), 6-(d)

Q.13     Say True or False.
             1. COPRA applies only to goods. (False)
             2. India is one of the many countries in the world which has exclusive courts for consumer redressal. (True)
             3. When a consumer feels that he has been exploited, he must file a case in the District Consumer Court. (True)
             4. It is worthwhile to move to consumer courts only if the damages incurred are of high value. (False)
             5. Hallmark is the certification maintained for standardisation of jewellry. (True)
             6. The consumer redressal process is very simple and quick. (False)
             7. A consumer has the right to get compensation depending on the degree of the damage. (True)


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Lesson No. 5


Consumer Rights

Rights of Consumers :

Rights which are provided by law :

- Right to safety
- Right to be informed - Right to choose
- Right to be heard - Right to seek redressal
- Right to consumer education.

Factors causing exploitation of Consumers :

- Limited information
- Limited supplies
- Limited competition
- Low literacy

Duties of Consumers :

- To purchase quality marked products such as ISI, AGMARK etc.
- To ask for cash memo for the items purchased whenever possible.
- To make complaint for genuine grievances consumers must know their rights and must
exercise them.


Demerits of Consumer Redressal Process :

- The Consumer Redressal Process is becoming cumbersome expensive and time consuming.
- Many a time, consumers are required to engage lawyers. These cases require time for
filling and attending the court proceedings etc.
- In most purchases cash memos are not issued hence evidence is not easy together.
- Most purchases in the market are small retail sales.
- The enforcement of laws that protect workers, especially in the unorganised sectors is
weak.
- Rules and regulations for working of markets are often not followed.


Consumer Protection Act - 1986 (COPRA)
- To protect and promote the interest of consumers.
- Under COPRA a three-tier quasi-judicial machinery at the district, state and national
levels is set up for redressal of consumer disputes.
- The district level court deals with the cases involving claims upto Rs. 20 lakhs; The
State level courts between Rs. 20 lakhs and Rs. 1 crore and the national level court
deals with cases involving claims exceeding Rs. 1 crore.


Questions :
1. Mention the Rights to consumers and write two sentences on each.
2. Explain the factors which cause exploitation of consumers.
3. Describe some of your duties as consumers if you visit a shopping complex in your locality.
4. Mention the demerits of consumer redressal process.
5. Explain Consumer Protection Act - 1986.

MCQ

1. A consumer
(i) Sells goods and services (ii) Buy goods and services
(iii) Produces goods and services (iv) Delivers goods and services

2. Adulteration is
(i) Selling defective items (ii) Overpricing
(iii) Underweight measurement (iv) Mixing cheap materials

3. Causes of consumer exploitation
(i) Right to Information (ii) Proper Supply (iii) Low literacy (iv) High literacy

4. Which is not a function of PDS
(i) Control Hoarding (ii) Control Prices
(iii) Control over charging (iv) Consumer Redressal

5. COPRA stands for
(i) Consumer Protection Act (ii) Consumer Prevention Act
(iii) Consumer Police Act (iv) Consumer Power Act

6. Pick odd one out
(i) Right to information (ii) Right to choice
(iii) Right to adulteration (iv) Right to redressal

7. Pick odd one out
(i) Right to safety (ii) Right to life
(iii) Right to consumer education (iv) Right to representation

8. National Consumer Day is celebrated in India
(i) 24 December (ii) 25 December (iii) 26 December (iv) 27 December

9. COPRA does not propose formation of
(i) National Consumer Court (ii) State Consumer Court
(iii) District Consumer Court (iv) High Court

10. ISO stands for
(i) International Standard Organization
(ii) International Organization for Standardization
(iii) International School Organization
(iv) International Standardization

SHORT QUESTION TYPE ANSWERS

Q.1 Why COPRA is enacted in India?
Ans. Consumer Protection Act 1986 (COPRA) is enacted in India with following motives:
(i) To pressurize business firms.
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(ii) To correct unfair business conduct.
(iii) To protect the interests of the consumers.

Q. 2 What do you understand by consumer protection?
Ans. By consumer protection we mean the protection of the consumers against the unfair and malpractices
adopted by the businessmen. These may be grouped mainly into two categories.
(i) Government measures
(ii) Voluntary measures

Q. 3 How do the logos ISI, Agmark or Hallmark help consumers?
Ans. These logos and certification help consumers get assured of quality while purchasing goods and services. The
organizations that monitor and issue the certificates allow the producers to use these logos provided they follow
certain quality standards.

Q. 4 What is adulteration?
Ans. When some foreign matter, injurious to health, is mixed with any good or natural production, it is called
adulteration. This is the most heinous crime against humanity.

Q. 5 Mention a few Organizations that provide certification of standardization in India.
What do you mean by ISO?
Ans. (i) BIS and ISI (ii) AGMARK (iii) HALLMARK
It means International Organization for Standardization which has its headquarter at Geneva. It does the
Standardization work at the international level.

Q. 6 What is the need for consumer awareness?
Ans. The need for consumer awareness was felt because both the manufacturers and traders can go to any extent
out of their selfishness. They can charge high prices, and resort to underweight and under measurement
methods. Their lust for money may lead to loss of money and health of consumers.


LONG QUESTION TYPE ANSWERS

Q.1 What are the different forms of consumer exploitation?
Ans. The different forms of consumer exploitation are:
(i) Less weigh. (ii) Defective goods. (iii) Provide poor services.
(iv) Impure quality of products/goods. (iv) High prices: sellers usually charge a price higher than the
prescribed retail price. (v) Duplicate Articles.
(vi) False or incomplete information, misleading consumers.
(vii) Lack of safety devices which cause harm to the consumers.
(vi) Adulteration: Mixing or substituting undesirable materials in food items etc.
(vii)Unsatisfactory after sale service: supplies do not provide satisfactory behavior.
(viii) Large companies with huge wealth, power and reach can manipulate in the market.

Q.2 What are the factors responsible for the consumer exploitation?
Ans. The following factors are responsible for the consumer exploitation:
(i) Limited information - For a correct decision and choice about a product, a consumer needs full information
about the price, quality, durability, composition, etc of the Product. In the absence of full and correct
information, a consumer may get exploited.
(ii) Limited supplies- when the supply of goods is less than their demand, the prices may go high and may also
encourage the tendency of hoarding. As a consequence, consumers will get exploited.
(iii) Limited competition-when there is limited competition with regard to production i.e., when producers are
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few and can control and restrict the supply of a product there is a possibility of manipulation in prices.
(iv) Low literacy-Illiteracy causes ignorance, which leads to exploitation of consumers. The level of awareness
in our country is generally low.

Q.3 What are consumer protection councils?
OR
Q. What are consumer forums?
Ans. These are voluntary organizations locally known as consumer forums or consumer protection councils. The
main activities of the consumer forums or consumer protection councils are:
(i) They guide consumers on how to file cases in the consumer court.
(ii) They may represent individual consumers in the consumer courts.
(iii) They create awareness among the people.
These voluntary organizations receive financial support from the government for the above purposes.


Answer Key of MCQ:


1(ii) 2(iv) 3(iii) 4(iv) 5(i) 6(iii)
7(ii) 8(i) 9(iv) 10(ii)



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                                              Lesson – 3

                                         Money and Credit


MCQ


1. The exchange of goods for goods is:
(i) banker of option (ii) bills of exchange (iii) barter (iv) currency

2. Currency is issued by:
(i) RBI on behalf of central government (ii) By president of India.
(iii) By finance minister (iv) None of them

3. National Sample Survey Organization is a :
(i) Commercial bank organization (ii) An organization of World Bank
(iii) An organization associated with Indian Standard. Institute
(iv) An institution responsible to collect data on formal sector credit.

4. Gold mohar, a coin so named was brought in circulation by:
(i) Akbar (ii) Sher Shah Suri (iii) Ashok (iv) Shivaji

5. Which agency is not included in informal loan sector or agency:
(i) Bank (ii) Village money lender (iii) Trader (iv) Relative of borrower

6. In SHG most of the decisions regarding savings and loan activities are taken by:
(i) Bank (ii) Members (iii) Non-government organizations (iv) LIC

7. Formal sources of credit does not include:
(i) Banks (ii) Co-operatives (iii) Employers (iv) LIC

8. Security (pledge, mortgage) against loan:
(i) Collateral (ii) Token Coins (iii) Promissory Note (iv)Currency


SHORT QUESTION TYPE ANSWERS


1. Give the meaning and functions of money.
Ans. Meaning of money: Money may be anything chosen by common consent as a medium of exchange and
measure of value.
Functions of money:
(A) Primary functions:
(a) Medium of exchange (b) Medium of value
(B) Secondary functions:
(a) Store of value (b) Standard of deferred payments (c) Transfer of value
(C) Contingent functions:
(a) Basis of credit (b) Liquidity (c) Maximum utilization of resources
(d) Guarantor of solvency (e) Distribution of National Income

2. What monetary system does India follow?
Ans. (a) India has adopted a representative paper currency or the managed currency standard.
(b) The monetary standard is synonymous with the standard money adopted. Paper currency in India is the
unlimited legal tender i.e. it is used to settle debts and make payments against all transactions.
(c) RBI (The Reserve Bank of India) issues all currency notes and coins except one rupee notes and coins
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which are issued by the ministry of finance.
(d) The system governing note issues the minimum reserve system viz. certain quantity of gold is kept in
reserve.


3. What is banking? Give the main features of commercial banking.
Ans. Banking is defined as the accepting of deposits for the purpose of lending or investment of deposited
money by the public, repayable on demand or otherwise and withdrawal by cheque, draft order or
otherwise.
Main features of commercial banks are as follows:
(i) It deals with money, it accepts deposits and advances loans.
(ii) It also deals with credit, it has the power to create credit.
(iii) It is a commercial institution, whose aim is to earn profit.
(iv) It is a unique financial institution that creates demand.
(v) It deals with the general public.


LONG QUESTION TYPE ANSWERS


1. Discuss the historical origin of money.
Ans. Historical origin of money:
(a) Animal money: First of all, human beings used animals as a medium of exchange. For example, the Vedic
literature tells us that cows or horses were used as money in India.
(b) Commodity money: Before the invention of money several commodities were used as money. Even today in
small villages food-grains like, wheat, horse gram, rice etc. are used as commodity money.
(c) Metallic money: Man used metal, like copper, silver, gold, etc. as a medium of exchange. Coins were minted
by goldsmith and used as money until paper money was invented.
(d) Paper money: China was the first country that started using representative paper currency standard. Certain
quantity of gold is kept as reserve in proportion to currency notes issued at the particular point of time.
Coins are also used besides paper currency in our country.
(e) Credit money: Credit money is also known as bank money. It refers to bank deposits kept by people with
banks which are payable on demand and can be transferred from one party to another through cheque/
demand drafts/pay orders etc.


7. Highlight the formal and informal credit sources in India.
Ans. (A) Formal credit sources
(i) Commercial Banks (ii) Central Bank (iii) Government Agency (iv) LIC
(v) Registered Chit Fund Companies (vi) UTI (vii) Mutual Fund Institution
Above mentioned all formal financial institutions accept savings and sanction loans to the people, companies and
other agencies.
(B) Informal credit sources
(i) Local moneylenders: village mahajan and sarafs or gold smiths in the rural areas or in the cities.
(ii) Land lords: this class include the big, middle and small category land-lords. They accept as collateral, title
documents of agricultural land, dwelling unit, factories and issue loans to needy persons and companies.
(iii) Self help groups: thrift and credit societies, union of government servants, cooperative societies and
farmers, labourers, domestic helpers and housewives organizations. They also accept savings from
different people and help their needy members.
(iv) Chit fund companies and private finance companies are very powerful informal
financial institutions. Some of them are working very effectively in villages and cities and all pay more
interest to depositors than the formal agencies and institutions.



8. What are main functions of Reserve Bank of India?
Ans. The main function of the central bank is to act governor of the machinery of credit in order to secure
stability of prices. It regulates the volume of credit and currency, pumping in more money when market is
dry of cash, and pumping out money when there is credit. Broadly a central bank has two departments
namely, issue department and banking department.
The main functions are:
(i) Issue of currency: the central bank is given the sole monopoly of issuing currency in order to secure control
over volume of currency and credit. These notes circulate throughout the country as legal tender money.
(ii) Banker to the government: central bank functions as a banker to the government – both central and state
governments. It carries out all banking business of the government.
(iii) Banker‘s bank and supervisor: Central Bank acts as banker‘s bank in three capacities:
(i) it is custodian of their cash reserves.
(ii) Central Bank is lender of last resort.
(iii) It acts as a bank of central clearance, settlements and transfers.
(iv) Controller of credit and money supply: it is an important function of a central bank to control credit and
money supply through its monetary policy. There are two parts of monetary policy, viz, currency and
credit. Central bank has a monopoly of issuing notes and thereby can control the volumes of currency. It
controls credit and money supply by adopting quantitative and qualitative measures



Answer Key of MCQ:1(iii) 2(i) 3(iv) 4(i) 5(i) 6(ii)
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Saturday, 5 March 2016


                                Lesson – 4
                   Globalization and the Indian                                 Economy.


MCQ

 1. MNC stands for(i) Multinational Corporation (ii) Multination Corporation(iii) Multinational Cities (iv) Multinational Council

2. Investment made by MNCs is called(i) Investment (ii) Foreign Trade(iii) Foreign Investment (iv) Disinvestment

3. Process of integration of different countries is called(i) Liberalisation (ii) Privatisation(iii) Globalisation (iv) None of the above

4. MNCs do not increase(i) Competition (ii) Price war (iii) Quality (iv) None of the above5. This helps to create an opportunity for the producers to reach beyond the domestic market(i) Foreign trade (ii) Domestic trade (iii) Internal trade (iv)Trade barrier

6. Foreign Trade(i) Increases choice of goods (ii) Decreases prices of goods(iii) Increases competition in the market (iv) Decreases earnings

7. Globalisation was stimulated by(i) Money (ii) Transportation (iii) Population (iv) Computers

8. Production of services across countries has been facilitated by(i) Money (ii) Machine (iii) Labour (iv) Information and communication technology

9. Tax on imports is an example of(i) Investment (ii) Disinvestment (iii) Trade barrier (iv) Privatisation

10. Liberalisation does not include(i) Removing trade barriers (ii) Liberal policies(iii) Introducing quota system (iv) Disinvestment
SHORT TYPE QUESTION ANSWERS
Q.1 Write four functions of WTO.Ans. Four functions of WTO are:(i) Administering trade agreements between nations. (ii) Forum for trade negotiations.(iii) Handling trade disputes. (iv) Maintaining national trade policy.
Q.2 What is the impact of WTO on Indian economy?Ans. The impact of WTO on Indian economy is:(i) An opportunity to India for trading with other member countries.(ii) Availability of foreign technology to India at a reduced cost.
(iii) Many laws of WTO are unfavorable to the developing countries like India.(iv) Certain clauses of WTO agreement on agriculture put restrictions on the provision of subsidized food grainsin India.
Q.3 What is trade barrier? How governments can use trade barriers?Ans. Any kind of restrictions imposed on trade is called a trade barrier.Governments can use trade barriers to increase or decrease (regulate) foreign trade and to decide what kinds ofgoods and how much of each, should come into the country.
Q. 4What is privatization and liberalization?Ans. Privatization means allowing the private sector to set up industries which were earlier reserved for the publicsector. Removing barriers or restrictions set by the government on trade is called liberalization. Thus, privatizationand liberalization results in freedom from closed and regulated economy.
Q. 5How MNCs can spread their production?Ans. MNCs can spread their production by:-1. Setting up joint production units with local companies.3. Placing orders with small producers
Q.6 Mention three factors responsible for globalization.Ans. (i) Growth of MNCs.(ii) Growth of technology.(iii) Development in transport and communication technology.
LONG TYPE QUESTION ANSWERS
Q.1What do you mean by Globalization? What are the effects of globalization in India?Ans. Globalization is the integration or interconnection between the countries through trade and foreigninvestments by multinational corporations (MNCs).Positive impacts:-1) Greater choice and improved quality of goods at competitive price and hence raises standard of living.2) MNCs have increased investments in India.3) Top Indian companies emerged as multinationals.4) Created new opportunities for companies providing services like IT sector.5) Collaborations with foreign companies help a lot to domestic entrepreneurs.Negative impacts:-1) Indian Economy faced the problem of brain drain.2) Globalization has failed to mark its impact on unemployment and poverty.3) Cut in farm subsidies.4) Closure of small industries.
Q.2 What is WTO? What are the aims of WTO? What are the drawbacks of WTO?Ans. WTO is World trade organization. It is an organization which is in favour of increasing the world tradethrough globalization.The aims of WTO are:(i) To liberalise international trade by allowing free trade for all.(ii) To promote international trade among the countries of the world in an open uniform and nondiscriminatorymanner.
(iii) Removal of both the import and export restrictions.The drawbacks of WTO are:1) WTO is dominated by the developed country2) WTO is used by developed countries to support globalization in areas that are not directly related to trade.3) Though WTO is supposed to allow free trade for all, in practice, it is seen that the developed countries haveunfairly retained trade barriers.
Q.3 What are MNCs? How the MNCs functions? What are the main guiding factors of MNCs?Ans. MNCs are Multinational corporations. It is a company that owns or controls production in more than oneNation. MNCs set up offices and factories for production in region where they can get cheap labour andother resources, closer to the markets. This is done to reduce the cost of production and the MNCs canearn greater profits. MNCs not only sell its finished products globally but also the goods and services areproduced globally. The production process is divided into small parts and spread across the globe.The main guiding factors of MNCs are:(i) Cheap production(ii) Closeness of production unit to the markets.(iii) Favourable government policies.
Q.4 What are the ways through which MNCs spread their production and interact with local producers?Ans. There are a variety of ways in which MNCs spread their production and interact with local producers invarious countries across the globe.(i) Setting up partnerships with local companies,(ii) Using the local companies for supplies(iii) Closely competing with the local companies or buying them up,(iv) MNCs are exerting a strong influence on production at these distant locations so that they couldproduce at cheapest price and earn profit.
Answer Key of MCQ:

 1(i) 2(iii) 3(iii) 4(iv) 5(i) 6(iv)7(ii) 8(iv) 9(iii) 10(iii)



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