What do you understand by globalisation? Explain in your own words.
Globalisation refers to the integration between countries through foreign trade and foreign investments by multinational corporations (MNCs). In the past two to three decades, most regions of the world have become increasingly interconnected.
This interconnectedness has many dimensions — cultural, political, social and economic. MNCs have been looking for locations around the world that would be cheap for their production. As a result, foreign investment by MNCs has been rising, and foreign trade between countries has been growing rapidly.
A large part of foreign trade is also controlled by MNCs. For example, the car manufacturing plant of Ford Motors in India produces cars for Indian markets and also exports cars to other developing countries and car components for its factories worldwide.
Explanation
This question tests the student's understanding of the basic definition of globalisation as given in Chapter 4. The textbook defines globalisation as the integration between countries through foreign trade and foreign investments by MNCs. A complete answer should mention the role of MNCs, the concept of integration, and the rising trend of foreign trade and investment over the past decades.