Deck 4: Economics and Emerging Markets

Question 1

Entrepreneurs are businesspeople who accept the risks and opportunities involved in operating new business ventures.

Answer 1

True

Question 2

One of the reasons for the decline of central planning was its failure to create economic value for customers.

Answer 2

True

Question 3

China relies on its cheap labor for economic development and India on the brainpower of its people.

Answer 3

True

Question 4

The ultimate goal of a market economy is to ensure that the government takes complete control over the distribution of a nation's resources.

Question 5

The Chinese term "guanxi" means government ownership.

Question 6

Frederick Taylor popularized the idea of central economic planning in the nineteenth century.

Question 7

Interfering with the price mechanism is a violation of a fundamental principle of the market economy.

Question 8

No nation has a completely individualist or completely collectivist cultural orientation.

Question 9

An economic system based on public ownership fosters growth much better than an economy based on private ownership.

Question 10

Central planning is rooted in the ideology that the welfare of a group is more important than individual well-being.

Question 11

A centrally planned economy gives individuals access to alternative purchase options.

Question 12

As supply and demand change for a good or service,so does its selling price.

Question 13

The government makes nearly all economy-related decisions in a market economy.

Question 14

Individualist cultures tend to offer fewer incentives and rewards than collectivist cultures.

Question 15

In a mixed economy,the government tends to control the economic sectors that are important for national security.

Question 16

When the assets of a country are owned by the government,there seems to be more incentive to eliminate waste.

Question 17

Incentives and rewards for individual business initiatives are an important aspect of collectivist cultures.

Question 18

Volunteer work and unpaid household work are included in GNP.

Question 19

Both GDP and GNP measure a nation's income per person.

Question 20

Central planning led to little economic growth and consistently low standards of living.

Question 21

A ________ economy is a system in which the government owns a nation's land,factories,and other economic resources,and schedules nearly all economic activities.

A)mixed
B)market
C)centrally planned
D)laissez-faire

Question 22

The human development index (HDI)demonstrates that high national income alone guarantees human progress.

Question 23

Which of the following emerged during the failure of centrally planned economic systems?

A)black markets
B)public markets
C)free enterprise system
D)market economies

Question 24

North Korea practices a policy of self-reliance known as ________.

A)guanxi
B)laissez-faire
C)juche
D)kaizen

Question 25

In which of the following systems is land,factories,and other economic resources equally split between private and government ownership?

A)market economy
B)black market economy
C)mixed economy
D)centrally planned economy

Question 26

The concept of purchasing power parity (PPP)must be applied to understand the true value of a currency in its home country.

Question 27

The government maintains control over the banking industry in a country.Which of the following is most likely true if the country has a mixed economy?

A)Businesses in most economic sectors of the country are privately owned.
B)The government considers banking sector as important to national security.
C)The country has never experienced threats against its long-term stability.
D)The government views banking as more important than manufacturing.

Question 28

Who among the following popularized the idea of central economic planning in the nineteenth century?

A)Frederick Taylor
B)Karl Marx
C)Peter Drucker
D)Henry Fayol

Question 29

One of the key obstacles faced by countries in economic transition is the lack of managerial expertise.

Question 30

Guanxi,in the Chinese business context,means ________.

A)bribing government officials
B)manufacturing inexpensive products
C)personal relationships
D)preference for communism

Question 31

In ________ cultures,economic systems tend to provide incentives and rewards for a person's private business initiatives.

A)individualist
B)high uncertainty avoidance
C)feminine
D)large power distance

Question 32

Nations with the poorest infrastructures and lowest personal incomes are called developing countries.

Question 33

Businesspeople who accept the risks and opportunities involved in creating and operating new business ventures are called ________.

A)managers
B)supervisors
C)entrepreneurs
D)angel investors

Question 34

Barter is an alternative for buyers who lack money needed to pay for imports.

Question 35

The ________ system of a country consists of the structure and processes it uses to allocate its resources and to conduct its commercial activities.

A)political
B)economic
C)social
D)cultural

Question 36

Which of the following is an important factor in forming successful business ventures in China?

A)following the strategies of western countries for establishing business relationships
B)focusing on establishing tight formal contracts
C)giving high importance to written contracts
D)establishing a trusting relationship before proceeding with business

Question 37

Which of the following disagrees with the concept of centrally planned economies?

A)At the time of their collapse,standards of living in most centrally planned economies were at or above those of market economies.
B)Basic necessities were often not provided to citizens in centrally planned economies.
C)Underground economies for goods and services thrived in most centrally planned economies.
D)Prices on the black market were much higher than the official prices set by governments.

Question 38

Central planning is rooted in the ideology that ________.

A)the welfare of a group is more important than individual well-being
B)individual concerns should be placed above group consensus
C)individual and group concerns are just as important as government concerns
D)privatization will enhance a country's economic well-being

Question 39

Which of the following statements is true of a centrally planned economy?

A)Individual concerns are as important as the government's concerns.
B)Consumers determine the prices of products and labor.
C)Factories are privately owned.
D)The government sets the production goals.

Question 40

In most centrally planned economies that failed,________.

A)market conditions had determined who would produce goods
B)prices of products were seen as a function of supply and demand
C)central planning agencies had specified the production goals
D)central planners had paid attention to efficiency improvement

Question 41

Which of the following statements is most accurate regarding the element of free choice when market economies are compared with centrally planned economies?

A)Consumers have free choice in both types of economies.
B)Free choice exists in market economies,but choices are restricted in planned economies.
C)Planned economies allow for greater free choice than do market economies.
D)Consumers do not have free choice in either of these economies.

Question 42

Which of the following is the main goal of privatization?

A)to ensure that the government specifies production goals
B)to increase economic efficiency
C)to increase subsidies to companies
D)to increase government's control on the market

Question 43

Laissez-faire economics refers to ________.

A)less government interference in commerce and greater individual economic freedom
B)a government-controlled system with less economic freedom at the individual level
C)a centrally planned economic system
D)creating monopolies through government partnership

Question 44

Which of the following would characterize a nation with high degree of economic freedom?

A)low tariffs
B)strict trade policies
C)government interventions
D)flourishing black markets

Question 45

In which of the following economies would manufacturing firms most likely produce defective products due to low incentives for quality outputs?

A)centrally planned economies
B)market economies
C)closed economies
D)mixed economies

Question 46

In a market economy,economy-related decisions are determined by the interactions between ________.

A)the government and individuals
B)supply and demand
C)customers and employees
D)large and small businesses

Question 47

Which of the following control inflation through policies regarding taxation and government spending in a market economy?

A)fiscal policies
B)monetary policies
C)social policies
D)trade policies

Question 48

A market economy is rooted in the belief that ________.

A)all the economic resources should be owned by the government
B)individual concerns should be placed above group concerns
C)every individual's business goals must be set by the government
D)government concerns matter the most in a country's economy

Question 49

To function smoothly and properly,a market economy requires ________.

A)government partnership
B)the practice of monopoly
C)price flexibility
D)nationalization

Question 50

Which of the following dictates supply and demand in a market economy?

A)privatization
B)production quotas
C)price mechanism
D)government intervention

Question 51

The selling of government-owned economic resources to private operators is called ________.

A)price mechanism
B)social stratification
C)privatization
D)guanxi

Question 52

Which of the following countries has a contemporary market economy?

A)France
B)Sweden
C)India
D)United States

Question 53

When one company alone controls a product's supply and therefore,its price,it is considered a(n)________.

A)oligopsony
B)monopoly
C)duopoly
D)oligopoly

Question 54

Several research studies were published lately that documented the health benefits of a certain grain.Which of the following is the most likely economic result of these findings?

A)Demand for the grain increases.
B)Equilibrium in terms of demand and supply is maintained.
C)The price of the grain decreases.
D)Supply of the grain remains constant.

Question 55

________ policies control the currency supply and interest rates in a market economy.

A)Fiscal
B)Economic
C)Monetary
D)Social

Question 56

France,Germany,and Sweden are examples of ________.

A)centrally planned economies
B)market economies
C)closed economies
D)mixed economies

Question 57

In a market economy,access to alternative purchase options is known as ________.

A)price-sensitivity
B)economic transition
C)laissez-faire
D)free choice

Question 58

Supply and demand are dictated by ________.

A)government ownership
B)free enterprise
C)the price mechanism
D)the management's decisions

Question 59

Assuming insects destroyed most of the coffee crops in key coffee-producing countries worldwide,which of the following would most likely occur within the coffee market?

A)Coffee prices would increase.
B)Coffee prices would decrease.
C)Demand for coffee would increase.
D)Demand for coffee would decrease.

Question 60

The ________ approach to national economics calls for less government interference in commerce and greater individual economic freedom.

A)totalitarian
B)laissez-faire
C)guanxi
D)centrally planned economy

Question 61

Which of the following is true about economic development of a nation?

A)The purchasing power parity is a poor indicator of a people's total well-being.
B)GDP is a larger figure and includes a nation's income generated from exports,imports,and international operations.
C)Illegal activities such as gambling and black market transactions are considered in GDP and GNP.
D)Using gross product figures to compare production across countries accounts for different cost of living in each country.

Question 62

Economic transition is the process of moving from ________.

A)developed to developing economies
B)centrally planned to free-market economies
C)developed to emerging economies
D)free-market to centrally planned economies

Question 63

Nations having the poorest infrastructures and lowest personal incomes are called ________.

A)developed countries
B)newly industrialized countries
C)emerging markets
D)developing countries

Question 64

Which of the following is a major obstacle to economic transition?

A)lack of government support
B)environmental degradation
C)privatization
D)black markets

Question 65

Which of the following terms refers to the broadest measure of economic development of a country?

A)gross domestic product (GDP)
B)purchasing power parity (PPP)
C)gross national product (GNP)
D)human development index (HDI)

Question 66

An investor wants to invest in a country that has a high gross national income (GNI).Which of the following countries would most likely qualify as a prospect?

A)Nepal
B)India
C)Japan
D)Vietnam

Question 67

Which of the following terms is used to refer to the exchange of goods and services for other goods and services instead of money?

A)fiat money
B)letter of credit
C)barter
D)guanxi

Question 68

Scenario: Stephanie Wong
Stephanie Wong,a Chinese-American,owns a consultancy that advises clients on strategies for business expansions into China.Wong is to lead a symposium for small and mid-sized exporters who are planning on expanding their businesses in China.Therefore,she is preparing answers in advance for questions that symposium participants would most likely ask.
The first question that Stephanie expects participants to ask is: "Which is more important for the Chinese,contacts or contracts?" Which of the following is the most effective response Stephanie could give for this question?

A)Contracts are critical because of their extreme importance in Chinese business.
B)Face-to-face communications and personal relationships take priority over written contracts.
C)Non-Chinese businesspeople should take time to agree on a legal contract before developing personal relationships.
D)Business relationships are established only after successful legal dealings are concluded.

Question 69

A country that has recently increased the portion of its national production and exports derived from industrial operations is called a(n)________.

A)newly industrialized country (NIC)
B)developing country
C)emerging market
D)developed country

Question 70

A company is conducting a research on new markets by comparing countries in terms of their human development index (HDI)scores.The company wishes to expand into a market where individuals experience a very high level of total well-being.Which of the following countries would the company most likely choose?

A)Russia
B)Mexico
C)China
D)Japan

Question 71

Which of the following statements is true of national production?

A)Marketers use GDP or GNP figures to determine whether a country's population is wealthy enough to purchase its products.
B)Per capita numbers provide a detailed picture of development of the entire country.
C)Gross product figures accurately indicate whether a nation's economy is growing or shrinking.
D)Volunteer work and unpaid household work are considered in GDP and GNP.

Question 72

The relative ability of two countries' currencies to buy the same basket of goods in those two countries is called ________.

A)gross national product
B)gross domestic product
C)purchasing power
D)purchasing power parity

Question 73

________ is the process by which a nation changes its fundamental economic organization and creates new free-market institutions.

A)Central planning
B)Economic transition
C)Industrialization
D)Economic liberalism

Question 74

________ is the value of goods and services that can be purchased with one unit of a country's currency.

A)Potential output
B)Gross national product
C)Purchasing power
D)Gross domestic product

Question 75

The GDP per capita of a country is lower than that of France.If the GDP per capita of the country is adjusted for PPP,the country's revised GDP is higher than that of France.Which of the following is most likely true about the country?

A)The cost of living in the country is higher than that of France.
B)The cost of living in the country is lower than that of France.
C)The cost of living in the country is approximately equal to that of France.
D)The cost of living in the country has increased over the past decade.

Question 76

The ________ of a country is its gross national product divided by its population.

A)GNP per capita
B)GDP per capita
C)purchasing power parity
D)purchasing power

Question 77

Which of the following measures the extent to which a government equitably provides its people with a long and healthy life,an education,and a decent standard of living?

A)category development index
B)gross national product index
C)human development index
D)purchasing power index

Question 78

Which of the following would most likely characterize a nation with a low degree of economic freedom?

A)low government intervention
B)protected property rights
C)strict trade policies
D)low tariffs

Question 79

The GDP per capita of a country is higher than that of Thailand.If the GDP per capita of the country is adjusted for PPP,the country's revised GDP is lower than that of Thailand.Which of the following is most likely true about the country?

A)There are fewer goods available for purchase in the country than in Thailand.
B)The cost to buy everyday goods in the country is approximately the same as in Thailand.
C)It costs less to buy everyday goods in the country than in Thailand.
D)It costs more to buy everyday goods in the country than in Thailand.

Question 80

________ is the value of all goods and services produced by the domestic economy over a one-year period.

A)Gross domestic product (GDP)
B)Human development index (HDI)
C)Gross national product (GNP)
D)Purchasing power parity (PPP)