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Q:
The government of Greenland Republic protects its newly privatized firms from foreign competition by imposing stringent barriers to international trade and foreign direct investment. As a result of this, the newly privatized firms will:
A.continue acting like state monopolies.
B.operate at their maximum efficiency.
C.pay huge taxes.
D.import raw materials and many industrial goods at low tariffs.
E.have no control over production and pricing.
Q:
How does privatization help stimulate gains in economic efficiency?
A.It allows newly privatized firms to gain monopoly position in a particular industry.
B.It provides incentives to new private owners to search for increases in productivity and to enter new markets.
C.It encourages state control over price and production output.
D.It raises barriers to direct investment by foreign enterprises.
E.It results in reservation of heavy industry for state ownership and the increase of import tariffs.
Q:
Which of the following movements started in Great Britain in the early 1980s when then Prime Minister Margaret Thatcher started to sell state-owned assets such as the British telephone company?
A.Nationalization
B.Privatization
C.Anti-democratic
D.Communist
E.Anti-globalization
Q:
Which of the following steps is most likely to be involved in the deregulation of an economy?
A.Increasing restrictions on direct investment by foreign enterprises and international trade
B.Privatizing state-owned enterprises
C.Exercising a high degree of state control over production and pricing
D.Abolishing laws related to the protection of property rights
E.Opposing democracy by adopting communism
Q:
Which of the following is most likely to indicate that the nation of Erbia has adopted deregulation?
A.The Erbian government exercises tight control over the prices of food grains.
B.The establishment of private enterprises in steel industry is prohibited by the Erbian government.
C.The retail sector in Erbia has been opened for foreign direct investment.
D.The Erbian government has been criticized for its inability to introduce a legal system to safeguard property rights.
E.Erbia ranks the lowest among the countries that grant both political and economic freedoms to its citizens.
Q:
The United Nation of Zorwaya has strict restrictions on direct investment by foreign enterprises, and it opposes the establishment and operation of private enterprises. The highest authority in the country enforces tight control over prices and production output. According to this information, the United Nation of Zorwaya most likely opposes:
A.nationalization of private assets.
B.deregulation.
C.socialism.
D.totalitarian ideologies.
E.command economies.
Q:
Which of the following is most likely to be implemented by a country as a part of deregulation?
A.Prohibition of private enterprises from operating in certain sectors
B.Commitment toward communism
C.Removal of price controls
D.Centrally planned economic system
E.Increased restrictions on foreign direct investment
Q:
The government of Great Lanthania is planning to adopt a market-based economic system. To be able to do so, the government of this country should:
A.abolish the laws that deal with protection of property rights.
B.introduce stringent foreign investment regulations.
C.increase its intervention in the economy.
D.adopt privatization.
E.oppose democracy.
Q:
Which of the following statements is true about the changing economic system since the 1980s?
A.There has been a shift from market-based economies to centrally planned economies.
B.There has been a shift away from a mixed economy.
C.Many states have restricted the sale of state-owned businesses to private investors.
D.The competition between economies has been reducing.
E.The extent to which property rights are protected has declined.
Q:
In the context of global economy, which of the following has been widely accepted since the late 1980s?
A.Centrally planned command economy
B.Mixed economy
C.Nationalization of private property
D.Deregulation of economies
E.Authoritarian regime
Q:
Which of the following is most likely to prove detrimental to democracy and international business?
A.Emergence of increasingly prosperous middle and working classes
B.Development of new information and communication technologies
C.Dominance of a universal civilization which leads to the establishment of a more harmonious world
D.Transformation of nations from centrally planned command economies to market-based economies
E.Emergence of different civilizations, each of which has its own value systems and ideology
Q:
In Samuel Huntington's thesis, global terrorism is a product of the:
A.clash of value systems and ideology between civilizations.
B.widespread acceptance of universal global civilization.
C.declining liberal democratic ideals.
D.differences in the factor endowments between countries.
E.geographical differences between nations.
Q:
Which of the following statements is true about the late influential political scientist Samuel Huntington's vision of the new world?
A.Samuel Huntington maintained that as societies continue modernizing they will also become more Western.
B.Samuel Huntington theorized that modernization in non-Western societies can result in a retreat toward the traditional.
C.Samuel Huntington predicted that the universalization of Western liberal democracy will be the final form of human government.
D.Samuel Huntington envisioned the end of the war of ideas between different civilizations.
E.Samuel Huntington suggested that most developing countries will stop adopting the material paraphernalia of the modern world.
Q:
The collapse of communism will result in the new world order that will be dominated by a universal civilization characterized by democratic regimes and free market capitalism, according to:
A.Amartya Sen.
B.Samuel Huntington.
C.Jeffrey Sachs.
D.Francis Fukuyama.
E.Adam Smith.
Q:
According to the author Francis Fukuyama, the world is most likely witnessing the end of:
A.free market economies.
B.capitalism.
C.liberal democracies.
D.privatization.
E.humanity's ideological evolution.
Q:
Economic advances in many countries have led to the:
A.decline of middle and working classes.
B.rise of totalitarian reforms.
C.decline of property rights.
D.emergence of closed and self-contained societies.
E.emergence of increasingly prosperous middle and working classes.
Q:
How have new information and communication technologies, including the Internet, affected the political economy in general?
A.They have led to the spread of communism.
B.They have reduced a state's ability to control access to uncensored information.
C.They have led to the collapse of democracy.
D.They have created new conduits for the spread of closed societies.
E.They have led to increased suppression of political and economic freedoms.
Q:
The collapse of which of the following in eastern Europe was precipitated by the growing gulf between the vibrant and wealthy economies of the West and the stagnant economies of the East?
A.Democracy
B.Communism
C.Free economy
D.Capitalism
E.Individualism
Q:
"Not all democracies are free, as some still restrict certain political and civil liberties." Which of the following countries best fits this argument?
A.Australia
B.United States
C.Great Britain
D.Russia
E.Canada
Q:
In the context of the changing political economy since the late 1980s, which of the following statements is true?
A.There has been a rapid spread of communism worldwide.
B.Capitalist ideologies have been in retreat.
C.A wave of totalitarian revolutions has swept the world.
D.Most countries have moved toward centrally planned and mixed economies.
E.Most of the world's nation-states are providing greater political and civil liberties to their citizens.
Q:
During the late 1980s and early 1990s, many of the world's nation-states moved away from:
A.democratically elected governments.
B.free market capitalism.
C.individualism.
D.political and civil freedoms.
E.totalitarian governments.
Q:
In the context of political economy, one notable development of the past 20 years has been the spread of:
A.centrally planned economies.
B.mixed economies.
C.totalitarian governments.
D.democracy.
E.communism.
Q:
The work by Jeffrey Sachs suggests that investments in which of the following help explain why some countries in Southeast Asia have been able to overcome the disadvantages associated with their tropical geography and grow far more rapidly than tropical nations in Africa and Latin America?
A.Nuclear weapons
B.Education
C.Terrorist activities
D.Nationalization of private properties
E.Active bartering
Q:
The influential economist Jeffrey Sachs argues that throughout history, which of the following, with their long engagements in international trade, have been the most supportive of market institutions.
A.Mountainous states
B.Tropical regions
C.Military societies
D.Landlocked states
E.Coastal states
Q:
The belief that geography can influence economic policy, and hence economic growth rates, goes back to:
A.Adam Smith.
B.Amartya Sen.
C.Plato.
D.Aristotle.
E.Karl Marx.
Q:
Which of the following is most likely to be the consequence of economic progress?
A.Adoption of communism
B.Adoption of democracy
C.Adoption of a command economy
D.Adoption of a totalitarian government
E.Restriction on individual freedom
Q:
The influential Peruvian development economist Hernando de Soto has argued that much of the developing world will fail to reap the benefits of capitalism:
A.until they adopt communism.
B.until property rights are better defined and protected.
C.if they adopt free market economies.
D.until their governments monopolize all means of production in their countries.
E.if they encourage innovation and entrepreneurship.
Q:
Only a totalitarian regime that is committed to which of the following is capable of promoting economic growth?
A.A command economy
B.A dictatorship
C.Limiting human freedom
D.A market system and strong protection of property rights
E.Limiting individualism and privatization
Q:
People in the West tend to associate which of the following with a free market system, strong property rights protection, and economic progress?
A.Anarchist state
B.Representative democracy
C.Planned economy
D.Communist state
E.Command economy
Q:
Due to strong legal protection of property rights, businesses and individuals will:
A.invest more in innovations.
B.face a huge burden from excessive taxation.
C.face more corruption.
D.move away from entrepreneurial activity.
E.run the risk of their profits being expropriated.
Q:
Which of the following creates an environment that is conducive to product and process innovations and to entrepreneurial activity?
A.Communism
B.Centrally planned economy
C.Privatization
D.Command economy
E.Lack of strong property rights
Q:
Which of the following creates an unfavorable environment for innovations and entrepreneurship?
A.Market economy
B.Economic freedom
C.State monopoly in production
D.Privatization
E.Strong legal protection of property rights
Q:
Which of the following statements is true about innovations and entrepreneurship?
A.A command economy creates greater incentives for innovation and entrepreneurship than a market economy.
B.If a country's economy is to sustain long-run economic growth, the business environment must restrict entrepreneurial activity.
C.A high level of entrepreneurial activity leads to a low level of innovation.
D.Innovations in production and business processes lead to an increase in the productivity of labor and capital.
E.Strong legal protection of property rights creates an unfavorable environment for innovation and entrepreneurship.
Q:
Which of the following best exemplifies an entrepreneur?
A.Sam, an employee at a supermarket, is solely responsible for all the purchases and sales at the grocery department.
B.Joe recycles old household articles to build phones, radios, and other things for his personal use.
C.Max makes his living by investing in small companies that have the potential to grow.
D.Javier purchased an invention of his friend to start a company that processes plastic bags into synthetic cloth.
E.Ryan invented an anti-aging formulation and sold it to a major pharmaceutical firm.
Q:
Which of the following is broadly defined as the development of new products, processes, organizations, management practices, and strategies?
A.Privatization
B.Economic deregulation
C.Boundary spanning
D.Innovation
E.Benchmarking
Q:
Which of the following is an indicator of low human development in a country?
A.A score of 0.3 on the HDI scale
B.Rapid "democratization" of political communities
C.Large population due to a highly developed health care system
D.Giving citizens a voice in the important decisions made for the community
E.A higher GNI per capita than the United States
Q:
The Human Development Index comes close to Amartya Sen's conception of how development should be measured, although which of the following, suggested by Sen in his thesis, is not included in the index?
A.Basic health care
B.Political freedom
C.Educational attainment
D.Basic average income
E.Life expectancy at birth
Q:
Which of the following is based on three measures: life expectancy at birth, educational attainment, and average incomes based on PPP estimates?
A.Human Development Index
B.Gross National Income
C.Gross Domestic Product
D.Cost of Living Index
E.Cash Reserve Ratio
Q:
Black economy is most likely to be prevalent when:
A.large amounts of economic activity are in the form of legally recorded cash transactions.
B.people engage in barter agreements to avoid paying taxes.
C.a country's GNI per capita exceeds $30,000.
D.the expenses of the government are less than its income.
E.a country is in trade surplus with another foreign country.
Q:
As a result of which of the following, large amounts of economic activity in India are unrecorded and the official GDP figures of the country fail to tell the entire story of the economy?
A.A large population
B.Active bartering
C.Deregulation
D.Nationalization
E.Closed totalitarianism
Q:
In 2012, if the PPP per capita of China was $9,040 and the PPP per capita of the United States was $52,340, this means that the:
A.GNI per capita was greater in China.
B.percent of goods and services consumed in the United States was lower.
C.standard of living in China was better.
D.cost of living was lower in China.
E.annual average GDP growth rate was lower in China.
Q:
Which of the following statements is true of purchasing power parity (PPP)?
A.PPP figures can be misleading because they don't consider differences in the cost of living.
B.The PPP for different countries is adjusted (up or down) depending upon whether the cost of living is lower or higher than in Great Britain.
C.The PPP data gives a static picture of economic development.
D.China's GNI PPP per capita is higher than that of the United States.
E.PPP adjustment does not allow for a direct comparison of living standards in different countries.
Q:
One can adjust GNI per capita by purchasing power to account for differences in the:
A.cost of living.
B.population density.
C.geographical area.
D.factor endowments.
E.labor productivity.
Q:
Which of the following measures the total annual income received by residents of a country and is regarded as a yardstick for the economic activity of a country?
A.Income elasticity of demand
B.Cash reserve ratio
C.Net cash flow ratio
D.Gross national income
E.Income equity ratio
Q:
One common measure of economic development is a country's:
A.gender ratio.
B.gross national income.
C.infant mortality rate.
D.population density.
E.total geographical area.
Q:
In the context of political economy, the past three decades have seen a general move toward:
A.autocratic forms of government.
B.command-based economic reforms.
C.adoption of legal systems that better enforce property rights.
D.an environment which is unfavorable for international business.
E.military parties monopolizing political power worldwide.
Q:
Social unrest and disorder are less likely to be found in countries that contain more than one ethnic nationality.
Q:
It is more costly to do business in relatively primitive or undeveloped economies because of the lack of infrastructure and supporting businesses.
Q:
In both China and India, the shift toward a command-based economic system has produced large gains despite weak property rights and endemic corruption.
Q:
A country's economic system and property rights regime do not influence the attractiveness of the country as a market or investment site.
Q:
By identifying and investing early in a potential future economic star, international firms build brand loyalty and gain experience in that country's business practices.
Q:
Although free markets and democracy can still be found around the world, the tide has been running in favor of command economies and totalitarian dictatorships.
Q:
In most eastern European nations, the title to urban and agricultural property is often uncertain because of incomplete and inaccurate records, multiple pledges on the same property, and unsettled claims resulting from demands for restitution from owners in the pre-communist era.
Q:
Without a legal system that protects property rights, and without the machinery to enforce that system, the incentive to engage in economic activity can be reduced substantially by private and public entities.
Q:
How do the political, economic, and legal environments of a country affect international trade? And what factors make a country favorable for doing business?
Q:
Briefly discuss product safety and liability laws.
Q:
How do international businesses respond to violations of their intellectual property?
Q:
How do patents, copyrights, and trademarks differ from each other?
Q:
Discuss the philosophy that underlies intellectual property laws.
Q:
What are grease payments? Are they acceptable by the U.S. law and OECD convention?
Q:
How does corruption affect the economic growth rate in a country?
Q:
Describe the Foreign Corrupt Practices Act.
Q:
What are the two ways through which property rights can be violated?
Q:
Describe the significance of Contracts for the International Sale of Goods (CIGS).
Q:
How does a common law system differ from a civil law system?
Q:
Discuss why command economies tend to stagnate.
Q:
Discuss why supply must not be restricted for a pure market economy to function.
Q:
Describe in brief the different forms of totalitarianism.
Q:
What are the various safeguards that are typically enshrined in constitutional law of an ideal representative democracy?
Q:
If a country wants to improve its attractiveness as a place for doing business and as an investment site, it should:
A.oppose the rule of law.
B.ensure that the economic activity is heavily regulated by the state.
C.move toward a market-based system.
D.extensively restrict property rights.
E.avoid enforcing intellectual property laws.
Q:
Which of the following nations is most likely to be unappealing as a place for doing business?
A.A nation that has a market-based economic system
B.A nation that has a strong legal system
C.A nation that has a democratic political institution
D.A nation that enforces strong property rights
E.A nation that has a totalitarian political system
Q:
Veronica had been getting red patches on her face after using a protein-based lotion manufactured by Nature Life Research Lab. On consulting a dermatologist, she learned that the lotion's steroid levels were beyond the standard levels permitted by the government and the damage caused by the lotion was irreversible. Which of the following will address Veronica's grievances?
A.Laws related to property rights
B.Product liability laws
C.Intellectual property laws
D.Foreign Corrupt Practices Act
E.Sarbanes-Oxley Act
Q:
Who among the following can claim product liability from the offender?
A.Jason wants to sue a multinational company for mass manufacturing one of his inventions without purchasing the rights.
B.Rebecca's patented jewelry designs have been imitated and sold at a low price under her brand name.
C.The airbags in Brian's car, manufactured by Zigwheels Inc., failed to inflate when his car met with an accident. This injured Brian and damaged the car.
D.Fred has accused his employer of forcing him and his teammates to work in an unsafe environment.
E.Samantha claims that her neighbor has stolen valuable ancestral antiques from her house.
Q:
Which of the following statements is true about product safety and liability laws?
A.There are no criminal product liability lawsonly civil product liability laws exist.
B.Liability laws are typically most extensive in less developed nations.
C.A boom in product liability suits and awards in the United States resulted in a dramatic decrease in the cost of liability insurance.
D.Product liability can be much greater if a product does not conform to required safety standards.
E.If product safety laws are tougher in a firm's home country than in a host country, the ethical thing to do is to adhere to host-country standards.
Q:
A boom in product liability suits and awards in the United States resulted in a dramatic increase in the cost of liability insurance. Many business executives argue that this:
A.makes American businesses less competitive in the global marketplace.
B.offers American businesses greater protection from foreign competitors.
C.exposes consumers to greater product risks.
D.eventually makes it cheaper for foreign companies to do business in the United States.
E.discourages American companies from outsourcing jobs to less developed countries.
Q:
Which of the following type of laws hold a firm and its officers responsible when a product causes injury, death, or damage?
A.Product equity
B.Product failure
C.Product liability
D.Product parity
E.Product testing
Q:
Product safety and product liability laws are enforced to protect:
A.intellectual property rights.
B.companies from their domestic competitors.
C.companies from their foreign competitors.
D.consumers.
E.product inventors.
Q:
Strong enforcement of intellectual property laws:
A.reduces the piracy (theft) of intellectual property.
B.reduces the attractiveness of a country as a market or investment site.
C.reduces the investments made by companies on basic research.
D.limits creativity and innovation among people.
E.prohibits a company from having a monopoly over its breakthrough inventions.
Q:
In the context of "knowledge" economy of the twenty-first century, which of the following statements is true about intellectual property?
A.Intellectual property has become an increasingly important source of economic value for businesses.
B.Protecting intellectual property has become increasingly easy in the twenty-first century.
C.Intellectual property laws limit the creativity and the ability of people to search for novel ways of doing things.
D.Firms always choose to stay out of countries where intellectual property laws are strict.
E.Companies in a country are more likely to commit themselves to extensive basic research if the country prohibits the use of patents.
Q:
The philosophy behind intellectual property laws is to:
A.reward the originator of a new invention, book, musical record, and the like for his or her idea and effort.
B.protect consumers from being subjected to business malpractice.
C.safeguard a firm and its officers from being responsible for injury, death, or damage caused by the firm's product.
D.eliminate monopoly in international trade.
E.ensure that the rights to manufacture, use, or sell an invention are made available to the whole society.