Question 1

If a country's economy is to sustain long-run economic growth, the business environment must be conducive to the consistent production of product and process innovations and to entrepreneurial activity.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements is most likely to be true about the economic prospects of a country?

Accepted Answer

A) The economic system and property rights regime are reasonably good predictors of economic prospects of a country. 
B) Countries with command economies tend to achieve greater economic growth rates than free market economies. 
C) Countries which do not provide any protection for property rights tend to achieve greater economic growth rates than the countries in which property rights are protected. 
D) Countries where property rights are not well respected and where corruption is rampant always have very low levels of economic growth. 
E) The advantages of building brand loyalty and gaining experience in a country's business practices is greater for a last-mover than for a first-mover.

Question 3

The influential Peruvian development economist Hernando de Soto has argued that much of the developing world will fail to reap the benefits of capitalism:

Accepted Answer

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.

Question 4

In the context of the changing political economy since the late 1980s, which of the following statements is true?

Accepted Answer

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.

Question 5

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:

Accepted Answer

A) Amartya Sen. 
B) Samuel Huntington. 
C) Jeffrey Sachs. 
D) Francis Fukuyama. 
E) Adam Smith.

Question 6

Which of the following is based on three measures: life expectancy at birth, educational attainment, and average incomes based on PPP estimates?

Accepted Answer

A) Human Development Index 
B) Gross National Income 
C) Gross Domestic Product 
D) Cost of Living Index 
E) Cash Reserve Ratio

Question 7

Both China and India have achieved high growth rates despite relatively weak property rights regimes and high levels of corruption, because of:

Accepted Answer

A) the shift toward a communist ideology. 
B) their high living standards. 
C) their large population. 
D) their high consumer purchasing power. 
E) the shift toward a market-based economic system.

Question 8

What are the various types of risks that a business enterprise could face in doing business in a particular country?

Accepted Answer

The answer of What are the various types of risks...

Question 9

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:

Accepted Answer

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.

Question 10

Which of the following statements is true about the global changes in political and economic systems?

Accepted Answer

A) The West lost the Cold War, and East European communist ideology is now widespread. 
B) A lack of deregulation has been the cause for the global financial crisis of 2008-2009, and the recession that followed. 
C) It is guaranteed that democracy will thrive in most of the world's newer democratic states. 
D) The multipolar world dominated by a number of civilizations of the Cold War era has vanished, and is now being replaced by a bipolar world. 
E) Many of the undeveloped and impoverished national markets of eastern Europe, Latin America, Africa, and Asia are potentially enormous for international business.

Question 11

According to Freedom House, all democracies are free countries in terms of political and civil liberties.

Accepted Answer

A) True 
 B)False

Question 12

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?

Accepted Answer

A) Nationalization 
B) Privatization 
C) Anti-democratic 
D) Communist 
E) Anti-globalization

Question 13

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?

Accepted Answer

A) Income elasticity of demand 
B) Cash reserve ratio 
C) Net cash flow ratio 
D) Gross national income 
E) Income equity ratio

Question 14

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 15

Due to strong legal protection of property rights, businesses and individuals will:

Accepted Answer

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.

Question 16

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 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.

Question 17

Which of the following best exemplifies an entrepreneur?

Accepted Answer

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.

Question 18

Which of the following is most likely to be the consequence of economic progress?

Accepted Answer

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

Question 19

The United Nation of Amberia, a Western European country, fought on the winning side of the Cold War. Which of the following was most likely being propagated by the country by participating in the Cold War?

Accepted Answer

A) Strong business regulations 
B) Communist ideologies 
C) Command economies 
D) Totalitarian dictatorships 
E) Free markets

Question 20

What are the implications of changing political economy for international business?

Accepted Answer

The answer of What are the implications of changing political...

Exam 3: National Differences in Economic Development

If a country's economy is to sustain long-run economic growth, the business environment must be conducive to the consistent production of product and process innovations and to entrepreneurial activity.

Which of the following statements is most likely to be true about the economic prospects of a country?

The influential Peruvian development economist Hernando de Soto has argued that much of the developing world will fail to reap the benefits of capitalism:

In the context of the changing political economy since the late 1980s, which of the following statements is true?

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:

Which of the following is based on three measures: life expectancy at birth, educational attainment, and average incomes based on PPP estimates?

Both China and India have achieved high growth rates despite relatively weak property rights regimes and high levels of corruption, because of:

What are the various types of risks that a business enterprise could face in doing business in a particular country?

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:

Which of the following statements is true about the global changes in political and economic systems?

According to Freedom House, all democracies are free countries in terms of political and civil liberties.

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?

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?

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.

Due to strong legal protection of property rights, businesses and individuals will:

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

Which of the following best exemplifies an entrepreneur?

Which of the following is most likely to be the consequence of economic progress?

The United Nation of Amberia, a Western European country, fought on the winning side of the Cold War. Which of the following was most likely being propagated by the country by participating in the Cold War?

What are the implications of changing political economy for international business?