Question 1

A well-functioning market economy is most likely to lack:

Accepted Answer

A)   laws protecting private property rights.
B)   state intervention in pricing and production.
C)   mechanisms for contract enforcement.
D)   political and economic freedoms.
E)   incentives to engage in entrepreneurial activities.F) A) and B)
G) B) and C)

Question 2

A(n) _____ risk can be defined as the likelihood that a trading partner will opportunistically break a contract or expropriate property rights.

Accepted Answer

A)   political
B)   legal
C)   economic
D)   sociological
E)   culturalF) C) and D)
G) A) and B)

Question 3

People in the West tend to associate a(n) _____ with a free market system,strong property rights protection,and economic progress.

Accepted Answer

A)   anarchist state
B)   representative democracy
C)   planned economy
D)   communist state
E)   command economyF) D) and E)
G) A) and D)

Question 4

Which of the following statements is true about innovations and entrepreneurship?

Accepted Answer

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.F) A) and D)
G) None of the above

Question 5

Which of the following statements is true about the changing economic system since the 1980s?

Accepted Answer

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.F) B) and D)
G) B) and C)

Question 6

Five of the fastest growing economies of the past 30 years-China,South Korea,Taiwan,Singapore,and Hong Kong-had one thing in common at the start of their economic growth: democratic governments.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following factors in a country is most likely to cause a political risk for an international business?

Accepted Answer

A)   The presence of more than one ethnic nationality
B)   Infrequent changes in government and government policy
C)   Low inflation rate
D)   Low level of government debt
E)   High living standardsF) A) and E)
G) B) and C)

Question 8

Which of the following best exemplifies a first-mover advantage?

Accepted Answer

A)   Venus Inc. has more than 50 percent market share in the telecom industry, because no other company had invested in this industry before Venus Inc.
B)   Maya won a cash discount of 75 percent on the latest NewY phone as she was the winner of a competition conducted by NewY.
C)   The level of satisfaction Simon experienced when dining at the Emerald's Inn was greatest the first time, and thereafter it reduced each time he dined there.
D)   Innovative Creations Inc. was the first to exit the declining pager phone manufacturing industry and as a result, it avoided losing a lot of money.
E)   Product critiques are extremely respected by major firms, as they are the first ones to review new products and services.F) B) and D)
G) A) and E)

Question 9

The _____ of the Cold War era has vanished.

Accepted Answer

A)   multipolar world
B)   democratic system
C)   free market system
D)   bipolar world
E)   widespread belief in the Western ideologyF) A) and C)
G) None of the above

Question 10

Which of the following statements is true of purchasing power parity (PPP) ?

Accepted Answer

A)   Purchasing power parity 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)   Purchasing power parity (PPP)  adjustment, does not allow for a direct comparison of living standards in different countries.F) B) and C)
G) B) and D)

Question 11

Black economy is most likely to be prevalent when:

Accepted Answer

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 countries GNI per capita exceeds $30,000.
D)   the expenses of the government is lesser than that of its income.
E)   a country is in trade surplus with another foreign country.F) B) and C)
G) C) and D)

Question 12

In the Republic of Lantharia,the state-owned telephone company enjoys a monopoly.The government of Lantharia Republic wants to maximize the operating efficiency this company by privatizing it.Which of the following is most likely to help the government in being successful in this endeavor?

Accepted Answer

A)   Imposing high corporate taxes on the company immediately after its privatization
B)   Increasing barriers to foreign direct investment
C)   Intervening in the company's operations by exercising price controls
D)   Spliting the company into independent units to compete with each other
E)   Prohibiting foreign companies from entering into the field of telecommunication in the Republic of LanthariaF) B) and E)
G) A) and B)

Question 13

The cost of doing business is most likely to be the lowest in:

Accepted Answer

A)   closed totalitarian states.
B)   primitive or undeveloped economies.
C)   open democratic societies.
D)   countries where local laws and regulations set strict standards with regard to product safety, safety in the workplace, and environmental pollution.
E)   countries that lack well-established laws for regulating business practice.F) A) and B)
G) All of the above

Question 14

Which of the following is most likely to be true about the overall attractiveness of a country as a potential market or investment site for an international business?

Accepted Answer

A)   The potential long-run benefits of doing business in a foreign country are independent of the country's future economic growth rates.
B)   The costs and risks associated with doing business in a foreign country are highest in economically advanced democratic nations.
C)   Economic growth tends to be higher in a centrally planned command economy system than in a free market system.
D)   The risks associated with doing business are low in developing nations where the governments have huge debts.
E)   The costs and risks associated with doing business in a foreign country tend to be greater in politically unstable nations.F) A) and C)
G) A) and B)

Question 15

Gamma Gene Incorporated has sought your opinion about the overall attractiveness of various countries as potential markets and investment sites.What would you tell them?

Accepted Answer

The overall attractiveness of a country ...

Question 16

Handicaps experienced by an organization because of entering into a market after several other companies who have already established their brands in the market,are referred to as _____.

Accepted Answer

A)   secondary disadvantages.
B)   last-class disadvantages.
C)   late-mover disadvantages.
D)   last in first out disadvantages.
E)   comparative disadvantage.F) C) and E)
G) A) and B)

Question 17

According to the author Francis Fukuyama,the world is most likely witnessing the end of:

Accepted Answer

A)   free market economies.
B)   capitalism.
C)   liberal democracies.
D)   privatization.
E)   mankind's ideological evolution.F) None of the above
G) A) and E)

Question 18

List the three measures on which the Human development Index (HDI)is based.

Accepted Answer

Amartya Sen's influential thesis has bee...

Question 19

_____ first commercialize innovative new products and processes,and help provide much of the dynamism in an economy.

Accepted Answer

A)   Gatekeepers
B)   Category captains
C)   Boundary spanners
D)   Managers
E)   EntrepreneursF) B) and C)
G) A) and B)

Question 20

Generally,the costs and risks associated with doing business in a foreign country are typically lower in:

Accepted Answer

A)   less developed countries.
B)   economically advanced countries.
C)   totalitarian states.
D)   countries with high inflation and falling living standards.
E)   countries that lack intellectual property rights.F) All of the above
G) C) and D)

Exam 3: Political Economy and Economic Development

Which of the following factors in a country is most likely to cause a political risk for an international business?

Correct AnswerverifiedShow Answer

People in the West tend to associate a(n) _____ with a free market system,strong property rights protection,and economic progress.

Correct AnswerverifiedShow Answer

A well-functioning market economy is most likely to lack:

Correct AnswerverifiedShow Answer

Which of the following statements is true of purchasing power parity (PPP) ?

Correct AnswerverifiedShow Answer

Which of the following statements is true about the changing economic system since the 1980s?

Correct AnswerverifiedShow Answer

Which of the following is most likely to be true about the overall attractiveness of a country as a potential market or investment site for an international business?

Correct AnswerverifiedShow Answer

According to the author Francis Fukuyama,the world is most likely witnessing the end of:

Correct AnswerverifiedShow Answer

Generally,the costs and risks associated with doing business in a foreign country are typically lower in:

Correct AnswerverifiedShow Answer

Black economy is most likely to be prevalent when:

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In the Republic of Lantharia,the state-owned telephone company enjoys a monopoly.The government of Lantharia Republic wants to maximize the operating efficiency this company by privatizing it.Which of the following is most likely to help the government in being successful in this endeavor?

Correct AnswerverifiedShow Answer

The _____ of the Cold War era has vanished.

Correct AnswerverifiedShow Answer

_____ first commercialize innovative new products and processes,and help provide much of the dynamism in an economy.

Correct AnswerverifiedShow Answer

List the three measures on which the Human development Index (HDI)is based.

Correct AnswerverifiedAmartya Sen's influential thesis has bee...View AnswerShow Answer

Which of the following best exemplifies a first-mover advantage?

Correct AnswerverifiedShow Answer

A(n) _____ risk can be defined as the likelihood that a trading partner will opportunistically break a contract or expropriate property rights.

Correct AnswerverifiedShow Answer

Handicaps experienced by an organization because of entering into a market after several other companies who have already established their brands in the market,are referred to as _____.

Correct AnswerverifiedShow Answer

Five of the fastest growing economies of the past 30 years-China,South Korea,Taiwan,Singapore,and Hong Kong-had one thing in common at the start of their economic growth: democratic governments.

Correct AnswerverifiedShow Answer

Gamma Gene Incorporated has sought your opinion about the overall attractiveness of various countries as potential markets and investment sites.What would you tell them?

Correct AnswerverifiedThe overall attractiveness of a country ...View AnswerShow Answer

The cost of doing business is most likely to be the lowest in:

Correct AnswerverifiedShow Answer

Which of the following statements is true about innovations and entrepreneurship?

Correct AnswerverifiedShow Answer

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Amartya Sen's influential thesis has bee...
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The overall attractiveness of a country ...
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