Question 1

When analyzing the key elements of a country's economic environment, it is best to apply a systems perspective.

Accepted Answer

A systems perspective considers the interrelationships and interdependencies between various elements of the economic environment, such as government policies, market forces, and international trade. This approach helps to understand the complex and dynamic nature of economic systems and how different factors can affect each other.

Question 2

The recent global financial crisis has interrupted the trend of national economies ________.

Accepted Answer

The recent global financial crisis has interrupted the trend of national economies steadily adopting the free market model.

Question 3

Tatum Manufacturing recently opened a new facility in Hong Kong.The firm can most likely expect the Hong Kong government to ________.

Accepted Answer

The Hong Kong government is known for promoting free and fair competition, so Tatum Manufacturing can expect the government to ensure fair competition in the market. However, monitoring market prices or controlling natural resources are less likely roles of the Hong Kong government. Providing innovation incentives may also not be a priority for the government.

Question 4

Kyle, an international manager for Apex Industries, has been given the task of analyzing the economies of three different emerging countries for the firm's potential expansion.Which of the following questions is LEAST relevant to Kyle's assignment?

Accepted Answer

Question C is least relevant because it focuses on the availability of labor for manufacturing positions, which, while important, is more specific to operational considerations rather than the broader economic analysis Kyle is tasked with. The other options directly relate to understanding the economic environment and policies of the countries, which are crucial for assessing potential expansion.

Question 5

In a command economy, ________.

Accepted Answer

In a command economy, the government sets goals and determines the price and quantity of what is produced. The government controls the allocation of resources and makes decisions for the economy as a whole rather than leaving it up to businesses and consumers.

Question 6

An economic system is the set of structures and processes that ________ in a country.

Accepted Answer

An economic system refers to the overall structures and processes that guide the allocation of resources and shape the conduct of business activities in a country. It includes the rules and regulations governing economic behavior and the institutions that facilitate economic transactions. Option B is too specific and does not cover the full scope of an economic system. Option C is not entirely accurate as competitive success is shaped by a variety of factors beyond standards set by the economic system. Option D is also incorrect as economic systems do not stipulate the roles and responsibilities of consumers, but rather set the overall framework within which economic behavior takes place.

Question 7

In the aftermath of the recent global financial crisis, there has been a significant reduction in the level of government involvement in economic affairs.

Accepted Answer

In the aftermath of the recent global financial crisis, governments around the world have actually increased their involvement in economic affairs through measures such as stimulus packages, financial bailouts, and tighter regulation of financial markets to prevent future crises.

Question 8

The BRICs are the strongest developed economies in the world.

Accepted Answer

The BRICs (Brazil, Russia, India, China) are not classified as developed economies, but rather as emerging markets with considerable growth potential in terms of economic and political influence.

Question 9

The recent global financial crisis has led to which of the following?

Accepted Answer

The global financial crisis led to governments seeking to impose more constraints on capitalism, such as increased regulation on financial institutions and policies to prevent future financial crises.

Question 10

Why is economic freedom an important factor to consider when analyzing a country's economic development, performance, and potential?

Accepted Answer

The answer of Why is economic freedom an important factor...

Question 11

Taylor Enterprises wants to expand its operations into Asia.Managers are focusing on countries with high degrees of economic freedom most likely because the firm is interested in a country with ________.

Accepted Answer

Countries with high degrees of economic freedom typically have minimal government intervention, including low taxation and limited regulations, which can create favorable business conditions for companies expanding into those countries. B, C, and D are not directly related to economic freedom.

Question 12

Which of the following is most likely a true statement about the global economy since the 1980s?

Accepted Answer

Since the 1980s, emerging economies have been adopting the principles and practices of free markets, leading to an increase in international trade and investment. This trend is evident in the growth of countries like China, India, and Brazil, which have opened up their economies to foreign investment and trade. This has led to an increase in economic growth and development, as well as greater integration into the global economy. The other options are less likely to be true statements about the global economy since the 1980s.

Question 13

The Economic Freedom Index indicates that economic freedom is positively correlated with all of the following EXCEPT ________.

Accepted Answer

The Economic Freedom Index typically shows positive correlations with life expectancy, literacy, and environmental sustainability, indicating that countries with higher economic freedom often have better outcomes in these areas. However, it does not directly correlate with diversity, as diversity can be influenced by a wide range of factors beyond economic policies or freedom levels.

Question 14

Since the late 1980s, the growing emergence of freer markets has been powered by the realization that ________.

Accepted Answer

The growing emergence of freer markets has been fueled by the realization that economic growth is directly related to economic freedom. This idea has been supported by studies that show countries with more economic freedom tend to have higher levels of economic growth and higher standards of living for their citizens.

Question 15

History suggests that if the economic crisis worsens, we are likely to see more people question the ________.

Accepted Answer

When faced with economic crises, people tend to question the legitimacy of the prevailing economic system. As such, if the economic crisis worsens, we are likely to see more people question the legitimacy of capitalism, which is the predominant economic system in the world today.

Question 16

Pender Pharmaceuticals is considering expanding overseas and is focusing primarily on the BRICs.Which of the following countries is one that Pender is considering?

Accepted Answer

The BRICs are an acronym for the countries of Brazil, Russia, India, and China. Therefore, the only country listed in the answer options that is part of the BRICs is Russia.

Question 17

In response to the global financial crisis, the United States government took actions that increased economic freedom.

Accepted Answer

The actions taken by the U.S. government in response to the global financial crisis were primarily focused on regulation and oversight of the financial industry, which could be seen as a restriction on economic freedom. For example, the Dodd-Frank Wall Street Reform and Consumer Protection Act imposed new rules and regulations on banks and other financial institutions to prevent another crisis from occurring.

Question 18

What issues complicate international economic analysis?

Accepted Answer

The answer of What issues complicate international economic analysis?...

Question 19

Managers at Morrison Manufacturing are considering expanding the firm's production overseas and want to ensure that the firm is located in a country with a high degree of economic freedom.Presently, which of the following locations would most likely offer Morrison the highest economic freedom?

Accepted Answer

Hong Kong consistently ranks in the top five countries with the highest economic freedom according to the Heritage Foundation's Index of Economic Freedom, making it the best choice for Morrison Manufacturing to expand its production overseas. Bolivia and Venezuela have mixed records when it comes to economic freedom, with ongoing political and economic instability. North Korea, on the other hand, has one of the least economically free systems in the world.

Question 20

The ________ view calls for companies to develop low-cost, high-powered, resource-minimizing innovations that can be marketed to the billions of people living on less than a few dollars a day.

Accepted Answer

The concept described in the question is that of the Base of the Pyramid (BOP), which refers to the billions of people living on less than a few dollars a day. The BOP view argues that companies can be successful while also alleviating poverty by developing affordable products and services for this underserved market. This approach requires companies to minimize resource use and costs while still delivering high value to customers. The other options listed (Hierarchy of Needs, Happy Planet Index, Gini coefficient) do not directly relate to this concept.

Quiz 4: The Economic Environments Facing Businesses