Exam 3: National Differences in Economic Development

The economic freedom associated with a market economy creates greater incentives for innovation and entrepreneurship than either a planned or a mixed economy.

GNI per capita can be adjusted by purchasing power to account for differences in the cost of living.

_____,a Nobel Prize-winning economist,has argued that development is not just an economic process,but it is a political one as well.

Which of the following is a step in the shift toward a market-based economic system?

Economic risks are independent of political risk.

Explain why a well-functioning market economy requires strong legal systems?

Political scientist Samuel Huntington argues that modernization in non-Western societies can result in a retreat toward the traditional.This is exemplified by _____.

The overall attractiveness of a country as a potential market or investment site for an international business depends on balancing the benefits,costs,and risks associated with doing business in that country.

When communism collapsed,many of the communist countries lacked the legal structure required to protect property rights because all the property was earlier held by the state.

A free market economy in which property rights are protected leads to subsequent economic growth,which often leads to the establishment of:

In Sen's view,development is an economic process that should be assessed by material output measures such as GNI per capita.

A country's economic system and property rights regime are reasonably good predictors of economic prospects.

What are first-mover advantages? Explain with an example.

A well-functioning market economy requires laws protecting private property rights and providing mechanisms for contract enforcement.

Describe how overinvestment led to the 1997-98 financial crises in Southeast Asia.

Which of the following statement pertaining to innovation and entrepreneurship is NOT true?

Sony was a pioneer in the portable music market segment.Sony's Walkman was an innovative product which created a new category altogether and made Sony a technological leader.This gave the company an edge over other consumer electronics brands that introduced portable music players for a very long time.In this example,Sony had the:

Totalitarian states promote human freedom and human development,which facilitates economic progress.

GNI and PPP data are useful because they provide a dynamic analysis of economic development.

Deregulation involves prohibiting private enterprises from operating in most sectors of the economy.