Case Studies
A group of companies in India wishes to import high-quality ACs from South Korea but have to pay a huge import tax on them which would make the ACs very expensive leading to low sales. Ascertain the role of the import tax in this situation.
Import tax is a trade barrier that the government uses to regulate foreign trade. It is a barrier since some restriction has been imposed on the movement of goods. (100 Points)
What is the term for an agreement in which a lender supplies a borrower with money, goods or services in return for the promise of future payment?
Credit
Which of the following is an example of trade Barrier?
A. Limit on the number of goods produced domestically.
B. Tax imposed on luxury goods
C. Tax imposed on polluting industries.
D. Limit on the number of goods imported
D. Limit on the number of goods imported
When was the WTO Setup?
1 January 1995
Which medium of exchange cannot be legally refused in settling transactions in India?
Amrita is a government employee and belongs to a rich urban household. Rani works as a helper on a construction site and comes from a poor rural household. Both have a crisis at home and wish to take a loan. List arguments explaining who would be able to get the loan from a formal source. Why?
Amrita would successfully get the loan from a formal source because:
She can provide the necessary documents for the loan.
She or her family probably has assets to use as collateral.
She will be able to fulfil the terms of credit. Also, the bank has the assurance of repayment of loan through EMIs deducted from her salary.
Where do banks get the money to extend loans?
Banks make loans out of the money deposited by their customers, or account holders.
What is the full form of WTO, and what does it aim to achieve?
World Trade Organization. It aims to liberalize international trade.
What percent of total deposits must banks retain in cash as a reserve to pay depositors who may withdraw funds?
15 percent.
They hold about 15 % of deposits as cash in order to pay the depositors who may come anytime to withdraw money from the bank.
What is the basic idea behind the SHGs for the poor?
The SHGs help poor borrowers to overcome the problem of lack of collateral. They can get timely loans for a variety of purposes at a reasonable interest rate in the name of the SHG of which they are members. The SHGs are thus the building blocks of the organization of the rural poor.
Did not find any suitable questions, take free 300 Points or Whatever.
That was just a joke, you'll be getting not 300 points.
Why do banks and cooperative societies need to lend more? Explain.
I.If banks and cooperative societies lend more money, they will get a higher income.
II.People can lend money for a low-cost variety of things.
III.Formal credit is important to let the poor benefit from cheaper loans.
IV.People could set up small industries or grow crops with bank loans.
V.Cheap and affordable credit will encourage economic activity and help the country develop.
(Each 60 Points)
“Foreign trade integrates markets in different countries.” Support the statement with arguments.
When was the Grameen Bank of Bangladesh set up? (To the closest Decade)
1976
Give an example of MNCs emerging from India.
Tata Motors, Infosys, Ranbaxy and Asian Paints, etc.
Let us see the effect of Foreign trade through the example of Chinese toys in the Indian markets. Chinese manufacturers learn of an opportunity to export toys to India, where toys are sold at a high price. They start exporting plastic toys to India. Buyers in India now have the option of choosing between Indian and Chinese toys. Because of the cheaper prices and new designs, Chinese toys become more popular in the Indian markets. Within a year, 70 to 80 percent of the toy shops have replaced Indian toys with Chinese toys. Toys are now cheaper in the Indian markets than earlier. What is happening here? As a result of trade, Chinese toys come into the Indian markets. In the competition between Indian and Chinese; toys, Chinese toys prove better. Indian buyers have a greater choice of toys at lower prices. For Chinese toy makers, this provides an opportunity to expand their business. The opposite is true for Indian toy makers. They face losses, as their toys are selling much less.
What is the basic function of foreign trade with reference to the given case?
(a) It connects markets of different countries.
(b) It creates opportunities for only the buyer to approach foreign goods.
(c) It connects markets of two countries only.
(d) Foreign trade connects developed countries only.
(a) It connects markets of different countries.
Why is the modern currency accepted as a medium of exchange without any use of its own?
Modern forms of currency are paper notes and coins. Neither is made of precious metal and neither has any utility.
o These are accepted as the medium of exchange because:
o Due to these reasons, money is accepted as legal tender in transactions.
Differentiate between Foreign Trade and Foreign Investment.
The difference between foreign trade and foreign investment is that trade involves the movement of goods while investment involves an objective to earn profits based on only monetary transactions. The prominent difference is that foreign trade deals with goods while foreign trade deals with capital. By capital, it means monetary underpinnings.
As of 2016, how many members does the World Trade Organisation consist of.
165
“The impact of globalization has not been uniform.” Explain this statement.
Globalization has not had a uniform impact. It has benefited only the trained and professional people in cities, and not the unskilled. Globalization has benefited the industrial and service sectors far more than agriculture. It benefited multinational corporations at the expense of domestic producers and the industrial working class. Small producers have been harmed by globalisation because they cannot compete with multinational corporations (MNCs) or large producers or manufacturers. Many workers have been laid off as a result of the closure of several units.
n recent years, people have tried out some newer ways of providing loans to the poor. The idea is to organize rural poor, in particular women, into small Self Help Groups (SHGs) and pool (collect) their savings. A typical SHG has 15-20 members, usually belonging to one neighbourhood, who meet and save regularly. Saving per member varies from ₹25 to ₹100 or more depending on the ability of the people to save. Members can take small loans from the group itself to meet their needs. The group charges interest on these loans but this is still less than what the moneylender charges. After a year or two, if the group is regular in savings, it becomes eligible for availing loan from the bank. The loan is sanctioned in the name; of the group and is meant to create self-employment opportunities for the members. For instance, small loans are provided to the members for releasing mortgaged land, for meeting working capital needs (e.g. buying seeds, fertilizers, raw materials like bamboo and cloth), for housing materials, and for acquiring assets like a sewing machine, handlooms, cattle, etc.
85% of the loans taken by the poor households in the rural areas are from which of the following sources?
(a) Cooperatives (b) Government Bank
(c) Informal Sources (d) Local bank
Answer: (c) Informal Sources
What is meant by terms of credit?
Why was the WTO set up? How far is it successful? Explain using an example.
Approximately how many people are employed in small industries in India?
20 Million
Describe the role of technology in promoting the globalization process.