Economics

Q. 5 What are the negative impacts of the World Trade Organization WTO

Ans.

1. It is feared that the WTO is being used by the developed countries to support globalization in areas that are not directly related to trade. As such they interfere in the management of the domestic economy of the country.
2. It is also reared that the prices of many essential and life saving drugs may go up.
3. Though the WTO is supposed to allow free trade for all, in practice, it is seen that the developed countries have unfairly retained trade barriers. On the other hand, the WTO rules have forced the developing countries to remove the trade barriers.
4. The WTO is being dominated by the developed countries.

Q. 6. What are the negative points of globalization?

Ans.

1. Globalization has failed to solve the problem of poverty.
2. Globalization and has pressure of competition have substantially changed the lives of the workers. Workers jobs are not longer secure.
3. Only rich and educated class has benefited from globalization.
4. Globalization has widened the gap between the rich and the poor.

Q. 7.What is the importance of trade?

Ans.

1. It creates an opportunity for the producers to reach beyond the domestic markets.
2. Goods and services travel from one country to another.
3. Choice of goods in the market rises.
4. Prices of similar goods in different markets tend to become equal.
5. Different producers compete against each other.

Q. 8.What are the advantages of Multinational corporations?

Ans.

1. Availability of capital and foreign investment: It solves the problem of capital and foreign investment of the underdeveloped and developing countries. MNCs set up factories, and offices for the production in these developing and the under developing countries and make huge investment.
2. Availability of foreign exchange: MNCs can be helpful in solving the problem of foreign exchange of the underdeveloped and the developing countries.
3. Promotion of small scale industries: Most of the MNCs take help from small scale and local industries in manufacturing. The products are supplied to the MNCs which then sell these under their own brand names to the customers.
4. Foreign trade and integration markets: 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 countries.

Q. 9. What role can the government play in making the globalization a success?

Ans.

1. Government should prepare such policies that must protect the interests, not only of the rich and the powerful, but of all the people in the country.
2. Government can ensure that labour laws are properly implemented and the workers get their rights.
3. Government can reserve some items exclusively for the small scale and local producers.
4. If necessary, the government can use trade and investment barriers like quota system, imports, duties, etc.
5. It can negotiate with the WTO for fairer rules.

Q.10.What are the positive and negative impacts of globalization in India?

Ans. Positive Impacts

1. Increase in the volume of trade in goods and services.
2. Inflow of private foreign capital and export orientation of the economy.
3. Helps in development and strengthening of domestic economics of India.
4. Improved productive efficiency and healthy competition.
5. Increased volume of output, income and employment.

Negative Impacts

1. It may not help in achieving sustainable growth.
2. It may lead to widening of income inequalities among various countries.
3. It may lead to aggravation of income inequalities within countries.
4. It may lead to loss of autonomy.
5. It may lead to greater dependence of the underdeveloped counties on advanced countries.