Deck 2: National Differences in Political Economy

Question 1

In a market economy, if demand for a product exceeds supply, prices will rise, signaling to producers to produce more.

Answer 1

True

Question 2

Modern socialists trace their intellectual roots to Karl Marx (1818-83), although socialist thought clearly predates Marx.

Answer 2

True

Question 3

When collectivism is emphasized, an individual's right to do something may be restricted on the grounds that it runs counter to "the good of society."

Answer 3

True

Question 4

Plato, to whom the advocacy of collectivism is traced back, did not equate collectivism with equality.

Question 5

In a command economy, enterprises have little incentive to control costs and be efficient, because they cannot go out of business.

Question 6

The Cold War was a war between collectivism and individualism.

Question 7

The communists believed that socialism could be achieved by democratic means, and turned their backs on violent revolution and dictatorship.

Question 8

In an individualist society, the welfare of society is best served by letting people pursue their own economic self-interest.

Question 9

It is possible to have a totalitarian state that is hostile to collectivism and where some degree of individualism is encouraged.

Question 10

The two dimensions, according to which the political systems can be assessed, collectivism-individualism and democratic-totalitarian are independent of each other.

Question 11

The central message of collectivism is that individual economic and political freedoms are the ground rules on which a society should be based.

Question 12

The social democrats believed that socialism could be achieved only through violent revolution and totalitarian dictatorship.

Question 13

Most modern democratic states practice representative democracy.

Question 14

Democracy is a form of government that prohibits opposing political parties.

Question 15

The number of command economies has fallen dramatically since the demise of communism in the late 1980s.

Question 16

Aristotle argued that individual diversity and private ownership are undesirable.

Question 17

It is possible to have a democratic political system that emphasizes a mix of collectivism and individualism.

Question 18

In mixed economies, governments also tend to take into state ownership troubled firms whose continued operation is thought to be vital to national interests.

Question 19

In a totalitarian country, there are safeguards to protect an individual's right to freedom of expression, opinion, and organization.

Question 20

The objective of the government in a command economy is to encourage free and fair competition between private producers.

Question 21

Many of the world's larger trading nations, including Japan and the United Kingdom, have not ratified the United Nations Convention on Contracts for the International Sale of Goods (CIGS).

Question 22

Jewish law is the most widely practiced theocratic legal system in the world today.

Question 23

Patents discourage companies from committing themselves to extensive basic research.

Question 24

The parties to an agreement normally resort to contract law when one party feels the other has violated either the letter or the spirit of an agreement.

Question 25

To facilitate international business, property rights are defined in a consistent way across countries.

Question 26

Property rights refer to the legal rights over the use to which a resource is put and over the use made of any income that may be derived from that resource.

Question 27

Judges in a common law system have the power to interpret the law so that it applies to the unique circumstances of an individual case.

Question 28

Property rights can be violated in two ways-through private action and through public action.

Question 29

A theocratic law system is one in which the law is based on religious teachings.

Question 30

Judges under a civil law system have more flexibility than those under a common law system.

Question 31

Contracts under a civil law system tend to be very detailed with all contingencies spelled out.

Question 32

Product liability can be much lower if a product does not conform to required safety standards.

Question 33

The Trade Related Aspects of Intellectual Property Rights, attempts to reduce intellectual property protections to enhance trade.

Question 34

Patents, copyrights, and trademarks establish ownership rights over intellectual property.

Question 35

In the 1970s, the United States passed the Foreign Corrupt Practices Act which requires all publicly traded companies, whether or not they are involved in international trade, to keep detailed records that would reveal whether a violation of the act has occurred.

Question 36

Common law is primarily a moral rather than a commercial law and is intended to govern all aspects of life.

Question 37

Product liability sets certain safety standards to which a product must adhere.

Question 38

The Foreign Corrupt Practices Act does not allow for grease payments.

Question 39

A nation's legal system is usually of very little interest to international business managers, because international businesses are headquartered in different countries.

Question 40

When law courts interpret common law, they do so with regard to tradition, precedent, and custom.

Question 41

The political, economic, and legal environments of a country influence the attractiveness of that country as a market or investment site.

Question 42

Totalitarianism:

A) refers to a political system in which government is by the people, exercised either directly or through elected representatives.
B) is based on a belief that citizens should be directly involved in decision making.
C) is a form of government in which one person or political party exercises absolute control over all spheres of human life.
D) is based on the idea that the welfare of society is best served by letting people pursue their own economic self-interests.

Question 43

In a _____ economy, certain sectors of the economy are left to private ownership and free market mechanisms while other sectors have significant state ownership and government planning.

A) market
B) private
C) command
D) mixed

Question 44

In a pure market economy:

A) all productive activities are owned by the state.
B) production is determined by the interaction of supply and demand.
C) collectivist goals are given priority over individual goals.
D) the prices at which goods are sold is determined by the government.

Question 45

Which of the following is a feature of a democracy?

A) Exercise of absolute control by one person or political party.
B) Governance by people or elected representatives.
C) Prohibition of entry to opposing political parties.
D) Complete restriction of individual political freedom.

Question 46

In a(n) _____ economy the government plans the goods and services that a country produces, the quantity in which they are produced, and the prices at which they are sold.

A) market
B) command
C) open economy
D) laissez-faire

Question 47

A political system that prioritizes the needs of the society over individual freedoms is called ____.

A) totalitarianism
B) collectivism
C) capitalism
D) egalitarianism

Question 48

_____ refers to a state where political power is monopolized by a party, group, or individual that governs according to religious principles.

A) Representative democracy
B) Theocratic totalitarianism
C) Tribal anarchism
D) Monotheistic communism

Question 49

The political systems of a country raise ethical issues that have implications for the practice of international business.

Question 50

Modern socialism has been popularized largely through the work of ____.

A) Adam Smith
B) Karl Marx
C) David Hume
D) Thomas Hobbes

Question 51

Peoples' right to protest on issues of accountability in public expenditure would be possible in a _____ political set-up.

A) dictatorial
B) democratic
C) totalitarian
D) fascist

Question 52

An economy in which the interaction of supply and demand determines the quantity in which goods and services are produced is called a ____.

A) planned economy
B) command economy
C) closed economy
D) market economy

Question 53

Which of the following statements about individualism is NOT true?

A) Individualism promotes private entrepreneurship.
B) Individualism promotes free market economics.
C) Individualism creates an anti-business environment.
D) Individualism advocates for a democratic political system.

Question 54

In several Western democracies, the poor performance of state-owned enterprises, because of protection from competition and guaranteed government financial support, led to _______.

A) privatization
B) nationalization
C) liberalization
D) socialization of production

Question 55

Antitrust laws in the United States are designed to:

A) restrict agricultural subsidies.
B) increase trade barriers.
C) outlaw monopolies.
D) restrict privatization.

Question 56

Which of the following philosophies can be traced back to the ancient Greek philosopher Aristotle?

A) Socialism
B) Individualism
C) Collectivism
D) Anarchism

Question 57

The tenet of _____ is that the welfare of society is best served by letting people pursue their own economic self-interest.

A) socialism
B) communism
C) anarchism
D) individualism

Question 58

The ________ believed that socialism could be achieved only through violent revolution and totalitarian dictatorship.

A) existentialists
B) social democrats
C) communists
D) anarchists

Question 59

Interdependent political, economic, and legal systems of a country make up its:

A) administrative agenda.
B) socioeconomic fabric.
C) cultural environment.
D) political economy.

Question 60

Which system of government generally permits some individual economic freedom but restricts individual political freedom, frequently on the grounds that it would lead to the rise of communism?

A) Tribal totalitarianism
B) Right-wing totalitarianism
C) Democratic totalitarianism
D) Theocratic totalitarianism

Question 61

The TRIPS agreement was designed to:

A) exclude China from all intellectual property agreements.
B) oversee a much stricter enforcement of intellectual property regulations.
C) hold a firm and its officers responsible when a product causes injury, death, or damage.
D) support traded software and recorded property among developed markets.

Question 62

Violation of property rights done through legal mechanisms such as levying excessive taxation and requiring expensive licenses or permits from property holders is called _______.

A) private action
B) collective action
C) public action
D) copyright violation

Question 63

In which of the following economies would the government be most likely to take into state ownership troubled firms whose continued operation is thought to be vital to national interests?

A) Market economies
B) Laissez-faire economies
C) Liberal economies
D) Mixed economies

Question 64

The Research and Development division of a company has recently designed a new coffee vending machine that is likely to sell very well in the market. It is compact, user-friendly, and provides unprecedented efficiency in terms of cost per cup. Consequently, the company fears that its competitors would soon mimic the design of their product and to protect its product, it is now seeking a _____ for the same.

A) copyright
B) patent
C) trademark
D) certification

Question 65

A civil law system tends to be less adversarial than a common law system because ____.

A) the judges' decisions are based on detailed legal codes
B) the judges have the freedom to interpret laws based on the situation
C) the judges' decisions are based on religious teachings
D) the judges are guided by interpretations made in prior legal cases

Question 66

Which of the following is the most widely practiced theocratic legal system in the world today?

A) Hindu law
B) Sikh law
C) Islamic law
D) Jewish law

Question 67

A theocratic law system is one in which the law is based on:

A) religious teachings.
B) tradition, precedent, and custom.
C) a detailed set of laws organized into codes.
D) cultural and social norms.

Question 68

_____ is the collective term for the legal rights relating to the use to which a resource is put and over the use made of any income that may be derived from that resource.

A) Trade rights
B) Property rights
C) Positive rights
D) Common rights

Question 69

Which of the following provides exclusive legal rights to authors, composers, playwrights, artists, and publishers to publish and disperse their work as they see fit?

A) Patents
B) Copyrights
C) Trademarks
D) Licenses

Question 70

Which of the following statements about the legal systems of countries is NOT true?

A) They can affect the attractiveness of a country as an investment site or market.
B) They are influenced by the prevailing political system of the country.
C) They are almost the same for all countries.
D) They are of immense importance to international business.

Question 71

A _____ system is based on a very detailed set of laws organized into codes.

A) traditional law
B) theocratic law
C) civil law
D) common law

Question 72

Which of the following statements about the Trade Related Aspects of Intellectual Property Rights (or TRIPS) agreement is NOT true?

A) It was designed to oversee enforcement of much stricter intellectual property regulations, beginning in 1995.
B) It obliged WTO members to grant and enforce patents lasting at least 20 years and copyrights lasting 50 years.
C) It directed rich countries to comply with its rules of intellectual property protection within five years.
D) It provided the very poorest countries 10 years to comply with its rules of intellectual property protection.

Question 73

Which of the following is NOT an example of intellectual property?

A) A music score
B) A video game
C) A software business
D) A screenplay

Question 74

A _____ grants the inventor of a new product or process exclusive rights for a defined period of time to the manufacture, use, or sale of that invention.

A) copyright
B) trademark
C) contract
D) patent

Question 75

Which of the following areas of international trade is regulated by the Foreign Corrupt Practices Act?

A) Making and performance of commercial contracts in international trade.
B) Preventing bribery and unethical acts in the conduct of international business.
C) Establishing a set of safety standards to which a new product must adhere.
D) Controlling the mafia activity that hinders trade in Russia, Japan, and the U.S.

Question 76

In Russia in the chaotic period following the collapse of communism, an outdated legal system, coupled with a weak police force and judicial system, allowed the Russian Mafia to demand "protection money" from business owners. Any business owner who rebelled had to face violent retribution. This violation of property rights exemplifies ____.

A) private action
B) copyright violation
C) infrastructural failure
D) public liability

Question 77

A common law system is different from a civil law system because:

A) a common law system is based on religious teachings, while a civil law system is based on cultural traditions.
B) a common law system is very rigid, while a civil law system tends to be more flexible.
C) in a common law system a judge relies on legal codes to make rulings, while in a civil law system a judge relies on his intuition and moral reasoning to make judgments.
D) in a common law system a judge has the power to interpret the law, while in a civil law system a judge has the power only to apply the law.

Question 78

Under the ____, cases are judged with reference to three characteristics: tradition, precedent, and custom.

A) theocratic law system
B) civil law system
C) contract law system
D) common law system

Question 79

All of the following are key components of a country's legal system EXCEPT:

A) Establishing a mixed economy.
B) Regulating business practices.
C) Defining the rights and obligations of those involved in business transactions.
D) Monitoring the way business transactions are executed.

Question 80

Design and names by which merchants or manufacturers designate and differentiate their products are known as ____.

A) trademarks
B) copyrights
C) patents
D) licenses