Case Study Question 02

Economics- Understanding Economic Development

Chapter 4: Globalisation and The Indian Eonomy

Class 10

Read the following passage carefully and answer the following questions:
Having assured themselves of these conditions, MNCs set up factories and offices for production. The money that is spent to buy assets such as land, building machines and other equipment is called investment. Investment made by MNCs is called foreign investment. Any investment is made with the hope that these assets will earn profits. At times, MNCs set up production jointly with some of the local companies of these countries. The benefit to the local company of such joint production is twofold. 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.

Question.1.
What do you understand by foreign investment ?

(a) Investment made by local companies is called foreign investment.
(b) Investment made by humans is called foreign investment.
(c) Investment made by MNCs is called foreign investment.
(d) Investment made by government is called foreign investment.

(c) Investment made by MNCs is called foreign investment.

Question.2.
What is the meaning of investment ?

(a) The money that is spent to buy plants, trees and other equipment is called investment.
(b) The money that is spent to buy assets such as land, building, machines and other equipment is called investment.
(c) The money that is spent to buy animals, birds and other equipment is called investment.
(d) The money that is spent to buy assets such as plants and other equipment is called investment.

(b) The money that is spent to buy assets such as land, building, machines and other equipment is called investment.

Question.3.
Mention any one benefit of the local company which sets up joint production with an MNC.

(a) MNCs might bring with them the latest plants which would be beneficial for the local companies.
(b) MNCs might bring with them the latest technology for production which would be beneficial for the local companies.
(c) MNCs do not compete with the local companies.
(d) MNCs give loans to the local companies

(b) MNCs might bring with them the latest technology for production which would be beneficial for the local companies.

Question.4.
What is set up by MNCs for production?

(a) MNCs set up factories and offices for production.
(b) MNCs set up houses and restaurants.
(c) MNCs set up houses and orphanages.
(d) MNCs set up orphanages and restaurants.

(a) MNCs set up factories and offices for production.

Question.5.
Why MNCs invest in other countries?

(a) To help the poor countries.
(b) To make the other countries more develop
(c) To earn profit
(d) none of these.

(c) To earn profit

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