Question 1

In the country of Sernia,the state owns all means of production.Sernia is a
A)market economy.
B)mixed economy..
C)planned economy.
D)private economy.
E)democratic economy.

Accepted Answer

In a planned economy, the government owns and controls all means of production, distribution, and pricing. Sernia's state ownership of all means of production indicates that it has a planned economy. A market economy would have private ownership and control of the means of production, while a mixed economy would have a combination of private and government ownership. Private and democratic economies are not specific economic systems.

Question 2

In the context of political economy,one notable development of the past 30 years has been the spread of
A)centrally planned economies.
B)mixed economies.
C)totalitarian governments.
D)democracy.
E)communism.

Accepted Answer

The answer of In the context of political economy,one notable...

Question 3

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

Accepted Answer

Strong legal protection of property rights provides businesses and individuals with greater security and confidence in their investments. This can encourage more investment in innovations, as investors are more likely to reap the benefits of their efforts.

Question 4

During the late 1980s and early 1990s,many of the world's nation-states moved away from
A)democratically elected governments.
B)free market capitalism.
C)individualism.
D)political and civil freedoms.
E)totalitarian governments.

Accepted Answer

The answer of During the late 1980s and early 1990s,many...

Question 5

Which of the following best exemplifies innovation?
A)ABC Inc.cut the prices of its products by 10 percent
B)ABC Inc.entered the Chinese market
C)ABC Inc.offered a "me-to" product similar to that of a competitor
D)ABC Inc.developed a new business model by going directly to customers Developed a new business
E)ABC Inc.cut its cost by 10 percent

Accepted Answer

Developing a new business model is the best example of innovation as it involves creating a new way of conducting business that is different from the established norm. This requires creativity, risk-taking, and a willingness to experiment and adapt to changing circumstances. The other options involve cost-cutting, market expansion, or simply following the competition, but do not necessarily involve true innovation.

Question 6

When the country of Swazimoa sells Swazimoa Telecom,a state-owned monopoly to private investors,it is engaging in
A)communism.
B)concentration.
C)privatization.
D)economizing.
E)grandstanding.

Accepted Answer

Swazimoa is engaging in "privatization" by selling its state-owned monopoly to private investors. This means transferring ownership or control of a public service or industry to private hands. It is a common practice to promote competition, efficiency or to raise revenue for the government.

Question 7

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

Accepted Answer

Innovations in production and business processes can lead to an increase in the productivity of labor and capital, which can drive economic growth and support entrepreneurship. This is because new innovations often make it easier, cheaper, or more efficient to produce goods and services. Therefore, option D is the only true statement about innovation and entrepreneurship. The other options are incorrect because they either suggest that innovation and entrepreneurship are not important for economic growth or imply that policies that support these activities are harmful.

Question 8

Only a totalitarian regime that is committed to which of the following is capable of promoting economic growth?
A)command economy
B)dictatorship
C)limiting human freedom
D)market system and strong protection of property rights
E)limiting individualism and privatization

Accepted Answer

A market system with strong protection of property rights allows for free enterprise and competition, which promotes innovation and investment in economic growth. Totalitarian regimes that limit human freedom, individualism and privatization, as well as command economies and dictatorships, stifle economic growth by suppressing innovation and investment.

Question 9

The country of Marita ensures strong legal protection of property rights.It is likely that the businesses and individuals in Marita will
A)want to invest more in innovations.
B)avoid privatization.
C)face more corruption.
D)avoid entrepreneurial activity.
E)be faced with a higher tax debt.

Accepted Answer

Strong legal protection of property rights provides businesses and individuals assurance that their investments and innovations will be protected. This will encourage them to invest more in innovations to create new products and services, which will lead to economic growth and prosperity.

Question 10

The influential economist Jeffrey Sachs argues that throughout history,which of the following,with their long engagements in international trade,have been the most supportive of market institutions?
A)mountainous states
B)tropical regions
C)military societies
D)landlocked states
E)coastal states

Accepted Answer

Coastal states have historically been the most supportive of international trade and market institutions due to their access to sea routes and favorable geography for trade.

Question 11

The work by Jeffrey Sachs suggests that investments in which of the following help explain why some countries in Southeast Asia have been able to overcome the disadvantages associated with their tropical geography and grow far more rapidly than tropical nations in Africa and Latin America?
A)nuclear weapons
B)education
C)terrorist activities
D)nationalization of private properties
E)active bartering

Accepted Answer

Jeffrey Sachs has emphasized the importance of investments in education as a way for countries to overcome the disadvantages of their geography and improve economic growth. This is particularly relevant in the context of Southeast Asia, where countries such as Singapore and Malaysia have invested heavily in education and achieved impressive economic growth.

Question 12

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

Accepted Answer

Economic progress is often associated with the growth of a middle class, which tends to demand more political rights and freedoms. Therefore, democracy is the most likely consequence of economic progress.

Question 13

Which of the following creates an environment that is conducive to product and process innovations and to entrepreneurial activity?
A)communism
B)centrally planned economy
C)privatization
D)command economy
E)lack of strong property rights

Accepted Answer

Privatization creates an environment where property rights are protected and allows individuals to invest and innovate, leading to product and process innovations and entrepreneurial activity. Communism, centrally planned economy, and command economy all have elements of government control and restrictions on individual ownership and innovation, which can hinder entrepreneurial activity and innovation. Lack of strong property rights can also hinder innovation and entrepreneurial activity.

Question 14

Which of the following creates an unfavorable environment for innovations and entrepreneurship?
A)market economy
B)economic freedom
C)state monopoly in production
D)privatization
E)strong legal protection of property rights

Accepted Answer

State monopoly in production limits competition and stifles innovation and entrepreneurship, as there is no incentive for individuals or firms to develop new ideas or improve upon existing ones when there is no competition in the market. Likewise, state monopolies may be inefficient and slow to adapt to changing market conditions. The other options mentioned (market economy, economic freedom, privatization, and legal protection of property rights) typically provide a more conducive environment for innovation and entrepreneurship, as they promote competition, investment, and risk-taking.

Question 15

The belief that geography can influence economic policy,and hence economic growth rates,goes back to
A)Adam Smith.
B)Amartya Sen.
C)Plato.
D)Aristotle.
E)Karl Marx.

Accepted Answer

The belief that geography can influence economic policy and growth rates can be traced back to the 18th-century economist, Adam Smith. Smith believed that geography could affect a country's access to resources, such as land, minerals, and waterways, which in turn could impact the development of industries and trade. This idea is often referred to as natural resource theory or geographical determinism.

Question 16

People in the West tend to associate which of the following with a free market system,strong property rights protection,and economic progress?
A)anarchist state
B)representative democracy
C)planned economy
D)communist state
E)command economy

Accepted Answer

Representative democracy is often associated with a free market system, as it allows for a level playing field in which individuals and businesses can compete. Strong property rights protection is also a hallmark of most representative democracies, as property rights are seen as one of the key underpinnings of economic progress. In contrast, planned economies, communist states, and command economies are typically associated with centralized control of the economy, which is seen as limiting economic progress and innovation. An anarchist state, by definition, lacks any central authority to enforce property rights or regulate economic activity, and so is unlikely to be associated with a free market system or economic progress.

Question 17

Which of the following best exemplifies an entrepreneur?
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 made by 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.

Accepted Answer

Javier exemplifies an entrepreneur as he takes the initiative to start a company by purchasing an invention and turning it into a business opportunity.

Question 18

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

Accepted Answer

Since the late 1980s, there has been a trend towards democratization and greater political and civil liberties worldwide. This is evidenced by the collapse of authoritarian regimes in countries such as the Soviet Union and Eastern Europe, as well as the spread of democratic institutions in countries like South Africa, South Korea, and Taiwan. There has not been a rapid spread of communism or totalitarian revolutions, and while some countries have moved towards centrally planned or mixed economies, the dominant trend has been towards greater economic liberalization and globalization. Therefore, the most accurate statement is that most of the world's nation-states are providing greater political and civil liberties to their citizens.

Question 19

In the country of Mashwen,the state owns key industries such as energy and transportation.The rest of the industries are privately owned.Mashwen is a _____ economy.
A)market
B)planned
C)mixed ec
D)private ecoomy
E)democratic

Accepted Answer

Mashwen's economy is a mix of both state-owned industries and privately owned ones, making it a mixed economy. This means that the government has some control over key industries, but also allows private businesses to operate in the market.

Question 20

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

Accepted Answer

Hernando de Soto argues that developing countries need better-defined and protected property rights in order to fully benefit from capitalism. Without clear property rights, individuals and businesses are unable to invest and innovate, leading to a lack of economic growth and development. Therefore, option B is the best choice.

Quiz 3: National Differences in Economic Development

In the country of Sernia,the state owns all means of production.Sernia is a

In the context of political economy,one notable development of the past 30 years has been the spread of

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

During the late 1980s and early 1990s,many of the world's nation-states moved away from

Which of the following best exemplifies innovation?

When the country of Swazimoa sells Swazimoa Telecom,a state-owned monopoly to private investors,it is engaging in

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

Only a totalitarian regime that is committed to which of the following is capable of promoting economic growth?

The country of Marita ensures strong legal protection of property rights.It is likely that the businesses and individuals in Marita will

The influential economist Jeffrey Sachs argues that throughout history,which of the following,with their long engagements in international trade,have been the most supportive of market institutions?

The work by Jeffrey Sachs suggests that investments in which of the following help explain why some countries in Southeast Asia have been able to overcome the disadvantages associated with their tropical geography and grow far more rapidly than tropical nations in Africa and Latin America?

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

Which of the following creates an environment that is conducive to product and process innovations and to entrepreneurial activity?

Which of the following creates an unfavorable environment for innovations and entrepreneurship?

The belief that geography can influence economic policy,and hence economic growth rates,goes back to

People in the West tend to associate which of the following with a free market system,strong property rights protection,and economic progress?

Which of the following best exemplifies an entrepreneur?

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

In the country of Mashwen,the state owns key industries such as energy and transportation.The rest of the industries are privately owned.Mashwen is a _____ economy.

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