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Q40 (CAPF/2013) Economy › External Sector & Trade › Global trade patterns Answer Verified

Which of the following statements related to globalization is/are correct? 1. It has resulted in the change of scale in economic activities. 2. End of Cold War facilitated globalization. 3. Flow of money in transnational corporations is discouraged. Select the correct answer using the code given below.

Result
Your answer: —  Â·  Correct: A
Explanation

Globalization has fundamentally altered the scale of economic activities by facilitating the rapid integration of production and markets across national borders. This process involves an increase in the flow of goods, services, and capital, transforming the world's economic geography as countries like India and China undergo rapid transformation [3]. Historically, the end of the Cold War in the early 1990s served as a critical facilitator, as the term gained popularity when cooperative arrangements and market forces expanded globally. Regarding the third statement, globalization is characterized by the reduction of restrictions on capital movement, allowing investors and transnational corporations (MNCs) to move money across borders to seek better returns [3]. MNCs play a major role in this process by increasing investments and technology transfers between countries. Therefore, the flow of money in transnational corporations is encouraged, not discouraged, making statement 3 incorrect.

Sources

  1. [2] Contemporary World Politics, Textbook in political science for Class XII (NCERT 2025 ed.) > Chapter 7: Globalisation > Economic Consequences > p. 105
  2. [3] Understanding Economic Development. Class X . NCERT(Revised ed 2025) > Chapter 4: GLOBALISATION AND THE INDIAN ECONOMY > WHAT IS GLOBALISATION? > p. 61
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