NCERT Solutions for Class 10 Social Science History Chapter 4
Social Science Class 10 Economics
Globalisation and the Indian Economy 4
Important NCERT Questions Based on new NCERT Books for Session 2022-2023
Questions No: 8
How does foreign trade lead to integration of markets across countries? Explain with an example other than those given here.
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Foreign trade is an open opportunity for both producers and buyers to go beyond internal markets and reach global international markets. Goods travel from one country to another which generates healthy competition among producers of various countries as well as buyers across the world. Therefore, foreign trade leads to the integration of markets across countries.
For example, the automobile industries in India have the option of importing cars from various car manufacturers. This provides an opportunity for the sellers to expand their business. With the liberalisation of foreign trade, electronic goods like digital cameras, laptop, smartphones have flooded the Indian market and give good opportunities to the buyer to select the item of their choice.
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Here’s a concise breakdown in points on how foreign trade leads to the integration of markets across countries:
– Supply Chain Connections: Foreign trade involves countries collaborating to produce goods; for instance, a T-shirt might have its cotton from one country, manufacturing from another, and design from a different nation.
– Specialization and Collaboration: Each country specializes in what it does best, contributing to the production process. This specialization allows for efficient production and diverse expertise in creating a final product.
– Global Market Expansion: Products made through international collaboration are exported and sold globally, expanding market reach and ensuring availability in various countries.
– Consumer Choices and Competition: Different brands and products from various countries compete in the global market, offering consumers a wide range of choices in terms of styles, designs, and prices.
– Economic Interdependence: Foreign trade creates economic interdependence, where disruptions in one country’s production can impact product availability globally, highlighting the interconnected nature of global markets.