12th Commerce - Book Back Answers - Chapter 20 - English Medium Guides

  

 

Plus Two / 12th Commerce - Book Back Answers - Chapter 20 - English Medium

Tamil Nadu Board 12th Standard Commerce - Chapter 20: Book Back Answers and Solutions

    This post covers the book back answers and solutions for Chapter 20 – Commerce from the Tamil Nadu State Board 12th Standard textbook. These detailed answers have been carefully prepared by our expert teachers at KalviTips.com.

    We have explained each answer in a simple, easy-to-understand format, highlighting important points step by step under the relevant subtopics. Students are advised to read and memorize these subtopics thoroughly. Once you understand the main concepts, you’ll be able to connect other related points with real-life examples and confidently present them in your tests and exams.

    By going through this material, you’ll gain a strong understanding of Commerce Chapter 20 along with the corresponding book back questions and answers (PDF format).

Question Types Covered:

• 1 Mark Questions: Choose the correct answer, Fill in the blanks, Identify the correct statement, Match the following 
• 2 Mark Questions: Answer briefly 
• 3, 4, and 5 Mark Questions: Answer in detail

All answers are presented in a clear and student-friendly manner, focusing on key points to help you score full marks.

All the best, Class 12 students! Prepare well and aim for top scores. Thank you!

Chapter 20

 Liberalization, Privatization and Globalization

I. Choose the correct answer.

1. __________ is the result of New Industrial Policy which abolished the ‘License System’.
a) Globalisation    
b) Privatisation
c) Liberalisation     
d) None of these
Answer Key:
c) Liberalisation

2. ___________ means permitting the private sector to setup industries which were previously reserved for public sector.
a) Liberalization    
b) Privatization     
c) Globalization     
d) Public Enterprise
Answer Key:
b) Privatization

3. ____________ ownership makes bold management decisions due to their strong foundation in the international level.
a) Private       
b) Public               
c) Corporate       
d) MNC’s
Answer Key:
a) Private

4. ______ results from the removal of barriers between national economies to encourage the flow of goods, services, capital and labour.
a) Privatization    
b) Liberalization       
c) Globalization       
d) Foreign Trade
Answer Key:
c) Globalization

5. New Economic Policy was introduced in the year _______.
a) 1980     
b) 1991     
c) 2013     
d) 2015
Answer Key:
b) 1991     

II. Very short answer questions.

1. State the branches of New Economic Policy.
Answer Key:

• The base for New Economic Policy in various countries of the world is Dunkel Draft, which was all about the General Agreements on Trade and Tariff. Mr. Arthur Dunkel  submitted a 22000 page document for the World Trade Organisation.
• India is one among such nations to commit itself to the New Economic Policy in 1991.

2. What is Privatization?
Answer Key:

• Privatization is the incidence or process of transferring ownership of a business enterprise, agency or public service from the government to the private sector.
• Simply speaking, privatization means permitting the private sector to set up industries which were previously reserved for the public sector.

3. Mention any two disadvantages of Liberalization.
Answer Key:
Increase in unemployment:

• Trade liberalization often leads to a shift in the balance of an economy.

Increased dependence on foreign nations:

• Trade liberalization means firms will face greater competition from abroad.

4. Give any two advantages of Globalization.
Answer Key:
Expansion of market:

• The size and operation of business moves from local to national and from national to international.

Technological development:

• Technological advancement paves way for a company to enter foreign market.

III. Short answer questions.

1. What do you mean by Liberalization?
Answer Key:

• Liberalization refers to laws or rules being liberalized, or relaxed, by a government.
• Liberalization means relaxation of various government restrictions in the areas of social and economic policies in order to make economies free to enter in the market.
• Liberalization is the result of New Industrial Policy which abolished the "License system" or “License Raj”

2. State any three impacts on Globalization.
Answer Key:

• Multinational corporations (MNCs) can manufacture, buy and sell goods worldwide.
• Globalization has led to a boom in consumer products market.
• The advent of foreign companies and growth in economy has led to job creation.

3. Write a short note on New Economic Policy.
Answer Key:

• India agreed to the conditions of World Bank and IMF and announced New Economic Policy (NEP) which consists of wide range of economic reforms.
• This new set of economic reforms is commonly known as the LPG or Liberalization, Privatization and Globalization model.

IV. Long answer questions.

1. Explain the advantages and disadvantages of liberalization. (any 5)
Answer Key:

• Liberalization means relaxation of various government restrictions in the areas of social and economic policies of the country.

Advantages of Liberalization:
Increase in foreign investment:

• If a country liberalizes its trade, it will make the country – more attractive for inward investment.

Increase the foreign exchange reserve:

• Relaxation in the regulations covering foreign investment and foreign exchange has paved way for easy access to foreign capital.

Increase in consumption:

• Liberalization increases the number of goods available for consumption within a country

Control over price:

• The removal of tariff barriers can lead to lower prices for consumers. 
• This would be particularly a benefit for countries who are importers.

Reduction in external borrowings:

• Liberalization reduces the dependence on external commercial borrowings by attracting more foreign investments.

Disadvantages of Liberalization:
Increase in unemployment:

• Due to liberalization some industries grow, some decline. 
• Therefore, there may be unemployment from certain industries closing.

Increased dependence on foreign nations:

• Trade liberalization means firms will face greater competition from abroad.

Unbalanced development:

• Trade liberalization may be damaging for developing economies. 
• It cannot compete against free trade.

Loss to domestic units:

• With fewer entry restrictions, it has been possible for many entrants to make inroads into the country, which poses a threat and competition to the existing domestic units.

2. What are the highlights of the LPG policy? (any 5)
Answer Key:

• The salient highlights of the Liberalization, Privatization and Globalization Policy in India:
• Introduction of new Foreign Trade Agreements
• Foreign Investment (FDI & FII)
• MRTP Act, 1969 (Amended)
• Deregulation
• Opportunities for overseas trade
• Steps to regulate inflation
• Tax reforms
• Abolition of License
• Globalization and liberalization are concepts closely related to one another, and both globalization and liberalization refer to relaxing social and economic policies which results in better integration with an economy and between nations.
• Globalization and liberalization both occur as a result of modernization.

 

Prepared By:

 

B. MUTHUKUMAR 
PG ASST COMMERCE
MKVK MATRIC HR SEC SCHOOL 
TENKASI