Social Science (087) — AI-generated practice question

MNCs and Cheap Production:
MNCs set up factories in countries where labour and resources are cheap, skilled workers are available, and government policies are favourable. For example, Ford Motors set up a plant in India to take advantage of low production costs.

Foreign Investment and Trade:
MNCs invest in these locations (foreign investment) and produce goods not just for local markets but also for export. Ford India sells cars in South Africa, Mexico, and Brazil. A large part of foreign trade is thus controlled by MNCs.

Role of Technology:
Technology enables MNCs to divide production across countries — design in the USA, manufacturing in China, assembly in Mexico, and customer care in India — saving 50–60% costs.

Market Integration:
Greater foreign investment and foreign trade together result in integration of production and markets across countries. This process of rapid interconnection is called globalisation.

Source: Chapter 4 — Production Across Countries; Foreign Trade and Integration of Markets

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• The answer traces a clear chain: cheap locations → MNC investment → foreign trade → market integration → globalisation.
• Examiners look for all three keywords: MNCs, foreign trade, technology — each linked to integration.
• Use textbook examples (Ford Motors, industrial equipment MNC) to score full marks; do not leave them out.
• "Integration of markets" must be defined or illustrated (prices equalising, competition across borders) as it is a key term in this chapter.
• Stay within ~120 words; adding the source line is good practice for structured/passage-based questions.