Select the Accurate Description of a Common PoliticalSystem

1 1.) The political economy of a country refers to the interaction of the political, economic, and _______ systems of a country Answer: legal 2.) The system of government in a nation is called the ______ system Answer: political 3.) _______ refers to a political system that values the needs of society over that of an individual Answer: Collectivism 4.) Which statement BEST describes a totalitarian system? Answer: It is a form of government in which the state recognizes no limits to its authority and strives to regulate all aspects of public and private life 5.) The production of goods in a pure market economy are determined by Answer: Supply and demand 6.) The term ______ refers to the interconnection of the political, economic, and legal systems of a country Answer: political economy 7.) What is the objective of a pure command economy Answer: Allotment of resources for the overall good of society 8.) Political systems that emphasize individualism tend to promote ______ Answer: democracy 9.) Collectivism refers to a political system that Answer: restricts an individual's right to do something on the grounds that it runs counter to the "good of society" 10.) In a ______ economy, both private enterprise and state ownership co-exist Answer: mixed 11.) _______ refers to a political system in which the citizens exercise power directly or elect representatives to form a governing body. Answer: Democracy 12.) In a pure _____ economy, all productive activities are owned privately -- not by the state Answer: market 13.) True or False: Unlike the economic system of a country, the legal system is NOT influenced by the prevailing political system Answer: False 14.) In a command economy, businesses are owned by Answer: the state 1 2 15.) Select the accurate description of a common law system Answer: A common law system has a degree of flexibility that other legal systems lack 16.) Companies wishing to pursue business opportunities in Sweden would find that while some industries are privately owned, others are state-controlled. What type of economy does this represent? Answer: mixed 17.) _______ law is the body of law that governs oral and written agreements associated with the exchange of goods, services, money, and property Answer: Contract 18.) _______ rights determine how a resource or economic good is owned and used Answer: Property 19.) The ______ system of a country refers to the rules, or laws that regulate behavior along with the system that enforces them Answer: legal 20.) ______ property refers to property that is the product of any innovative activity, such as a screenplay, a music score, or the chemical formula for a new drug Answer: Intellectual 21.) A country that bases its laws on the traditions within the country's legal history operates under a ____ law legal system Answer: common 22.) _____ set certain safety standards which a commodity must meet Answer: Product safety laws 23.) Political systems that emphasize individualism tend to promote Answer: Democracy 24.) Which of the following two factors would make a country desirable to do business with? Answer: - Democratic political institutions - A market-based economy 25.) A(n) _______ is a document that specifies the conditions under which an exchange is to occur, detailing the rights and obligations of the involved parties Answer: contract 26.) What are two ways in which property rights can be violated? Answer: -Through private action -Through public action 27.) Jenner is obtaining a patent for the new diet drink formulation he created. He hopes that Coca Cola and other companies will be interested in licensing his formula. Jenner is protecting his _____ property with the patent. 2 3 Answer: intellectual 28.) Several years ago, a customer brought a lawsuit against McDonald's because the coffee she purchased at the drivethru window was hot when she spilled it on herself in her car. This lawsuit was based on Answer: product liability 29.) Even though there are many state-owned businesses in China, many Western businesses feel that they should still invest in the country because Answer: the nation is moving toward a market-based system 30.) _____ measures the total annual income received by residents of a country Answer: Gross national income 31.) The Human Development Index is based on Answer: life expectancy at birth 32.) When analyzing the process of innovation, it can be said that it Answer: goes hand-in-hand with entrepreneurship 33.) Innovators and entrepreneurs flourish most in a ______ because _______ Answer: market economy; it grants existing businesses and entrepreneurs the freedom to improve their operations through innovation 34.) It is _______ for the government to expropriate profits from innovation through excessive taxation Answer: legal 35.) The total annual income received by residents of a single nation is reflected in which official measure? Answer: Gross national income 36.) Property rights are only truly secure when a _____ exists Answer: mature democratic state 37.) What three factors are assessed to determine the Human Development Index of a country? Answer: - educational attainment - life expectancy at birth -average incomes 38.) True or False: The recent fast-paced economic growth in some Asian economies can be attributed to their adoption of more totalitarian forms of government Answer: False 39.) As defined in the text, ______ includes a company's new products, new processes, new organization, new management practices and new strategies Answer: innovation 40.) Jeffrey Sachs argued that the _____ of a nation can have an impact on economic development Answer: geography 3 4 41.) Which economic system is MOST conductive to innovation and entrepreneurial activity? Answer: Market economies 42.) Which trend has been seen in the political systems of nations since the late 1980s? Answer: There is more emphasis on the free market economy approach and less on centrally planned and mixed economic models 43.) To foster innovation in the business environment, it is important that strong legal protection of property rights is in place. Inadequately enforced property rights can lead to an increase in the Answer: Risk of expropriation of profits 44.) In the past 40 years, China, South Korea, Taiwan, Singapore, and Hong Kong had the fastest-growing economies. These nations also had _____ in place Answer: undemocratic governments 45.) Economic progress often leads to Answer: adoption of a democractic government 46.) In many nations, which social class has benefited from economic advances and seen the emergence of prosperity? Answer: The middle class 47.) Which of these situations relates to Sachs's view on a country's economic development? Answer: Country A has the benefit of nutrient-rich soil which provides a competitive advantage for the country's tobacco industry 48.) One change in the political systems of nations since the late 1980s is that Answer: totalitarian governments failed and were replaced by democratically elected governments usually supportive of free market capitalism 49.) Francis Fukuyama's argument regarding the new world order was that Answer: liberal democracy has triumphed and will become the final form of human government 50.) One reason for the spread of democracy across the globe is the Answer: failure of totalitarian regimes to provide economic progress to the majority of their citizens 51.) The Heritage Foundation index of economic freedom is based on ten indicators. Which four are included Answer: - labor freedom - taxation rules - foreign investment regulations -trade policy 52.) How does Samuel Huntington's argument about the new world order differ from the view of Fukuyama Answer: Huntington believed the world would be split into different civilizations with their own ideology 53.) What is one of the steps that pave the way for a shift toward a market-based economic system? Answer: Creation of a legal system to safeguard property rights 4 5 54.) ______ involves removing or reducing government regulations, typically in the economic sphere Answer: Deregulation 55.) The government of a foreign nation had controlled the oil and gas industry for many years but recently transferred the business into the hands of several small businesses. These companies are now motivated to increase productivity and enter new markets to achieve greater profits. What tactic did this nation use to help it move toward a market-based economic system? Answer: Privatization 56.) Without a legal system that protects property rights, and the machinery that enforces those rights, there is substantially ______ incentive to engage in economic activity Answer: less 57.) True or false: Market-based economic systems have failed to produce the same high level of economic performance that command and mixed economies have. Answer: False 58.) A lack of _____ has been blamed by many as the cause of the problems that led to the global financial crisis of 2008-2009 Answer: regulation 59.) ______ is one of the steps necessary for a country to shift toward a market-based economic system. Answer: privatization 60.) What economic tactic was used when former communist countries removed price controls and allowed prices to be set as the result of supply and demand? Answer: deregulation 61.) When comparing early and late entrants into a market, it can be said that Answer: early entrants build brand loyalty and gain experience in a country's business practices 62.) ______ is seen as a transfer of ownership of a business, property or enterprise from the public sector to the private sector. Answer: Privatization 63.) With the collapse of communism in eastern Europe, many countries didn't have a legal structure in place to protect property rights because Answer: all property had previously been held by the state 64.) When discussing the changes in the political and economic systems of the world, it can be said that Answer: the battle between the ideologies of collectivism and individualism is less distinct today 65.) An international firm, entering a country's market early, may achieve a significant payback if that country Answer: achieves sustained high economic growth rates 5