Globalisation

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  • Q1

    Explain the rationale behind liberalisation?

    Marks:3
    Answer:

    The basis ideology or rationale behind liberalisation is that the economic management and decision making has to be taken care of by the market forces of demand and supply. This reduce the intervention of state in economic activities as much as possible.

    It leads to

    1. Optimal and efficient utilisation of resources.
    2. Raises the level of employment.
    3. Raises the level of production.

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  • Q2

    Liberalisation entails removal of restrictions internally as well as externally. Explain.

    Marks:2
    Answer:

    Liberalisation implies removal of restrictions as given below:

    1. Internal: Under this, various relaxations were made in tax laws, labour legislations, environmental regulations etc to encourage investment in India.
    2. External: Under this, removal of tariffs, capital controls, movement of resources between nations took place.

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  • Q3

    What are the components of liberalisation?

    Marks:2
    Answer:

    The components of liberalisation are as given below:

    1. Sectors which were earlier reserved solely for the government were opened up for the private sector.
    2. Various rules and regulations regarding location of plants, size of plants which were constraining the private sector were removed.

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  • Q4

    What does FERA state for?

    Marks:1
    Answer:

    FERA stands for Foreign Exchange Regulation Act.

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  • Q5

    Define liberalisation.

    Marks:1
    Answer:

    Liberalisation refers to the process of loosening up the control of the government on trade and industry in an economy.

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