question

In the context of cost, which of the following can be considered as the most attractive market or investment site?

answer

A country that has a well-developed body of business contract law

question

Do all totalitarian regimes oppose market economy and strong property rights protection? Elaborate.

answer

Some totalitarian regimes have fostered a market economy and strong property right protection. such as China, South Korea, and Taiwan have had major economic growth. But this only happens when the totalitarian regime is committed to a market system and strong protection of property rights. This type of commitment is rare in a totalitarian regime, because dictators are rarely benevolent.

question

Entrepreneurial individuals have fewer economic incentives to develop valuable new innovations in market economies than in planned economies.

answer

FALSE

question

In the context of political economy, the past three decades have seen a general move toward:

answer

adoption of legal systems that better enforce property rights.

question

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.

answer

FALSE

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question

The cost of doing business is most likely to be the lowest in:

answer

open democratic societies.

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question

One common measure of economic development is a country's:

answer

gross national income.

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question

Economists who argue that innovation and entrepreneurial activity are the engines of long-run economic growth, define innovation broadly to include not just new products but also new processes, new organizations, new management practices, and new strategies.

answer

TRUE

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question

Discuss Jeffrey Sachs's conception of geography, education, and economic development.

answer

Landlocked states have not been as supporting of market institutions and coastal states which have their long engagements in international trade. Landlocked states are normally hierarchical and usually militarized. Market-based trade has been neglected often by mountainous states. Temperate climes usually are higher supporters of higher densities of populations, which makes them more extensive division of labor than tropical regions.

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question

Generally, the costs and risks associated with doing business in a foreign country are typically lower in:

answer

economically advanced countries.

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question

Why are market economies more conducive to innovation and entrepreneurship than planned or mixed economies?

answer

In a market economy anyone who has an innovative idea is able to try to make money out of it by starting a business. In planned economy, the state owns all means of production, making individuals have few economic incentives to develop valuable new innovations, because the state has all the revenue. Mixed economies have the same problem as planned economies. the state has the monopoly in the mixed economies.

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question

A company has business interests in a country where the President-elect wants the country to adopt socialism and protectionism. Consequently, the company will be concerned about the _____ risks of continuing to do business in that country.

answer

political

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question

_____ is regarded as a yardstick for the economic activity of a country; it measures the total annual income received by residents of a country.

answer

Gross national income

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question

When social unrest and disorder in a country causes drastic changes in its business environment that adversely affect the profit and other goals of a business enterprise, the business enterprise is said to be facing a(n) _____ risk.

answer

political

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question

Which of the following is most likely to be true about the overall attractiveness of a country as a potential market or investment site for an international business?

answer

The costs and risks associated with doing business in a foreign country tend to be greater in politically unstable nations.

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question

In Amartya Sen's view, development is solely an economic process, and not a political process.

answer

FALSE

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question

Totalitarian states that limit human freedom are highly conducive to progress in terms of innovation, entrepreneurship, and economic growth.

answer

FALSE

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question

If a company from a highly developed nation hesitates to enter into a joint venture with a company from a developing nation due to inadequate protection of intellectual property rights, it is trying to avoid a(n) ____ risk.

answer

legal

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question

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

answer

the shift toward a market-based economic system.

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question

Which of the following statements is most likely to be true about the risks of doing business in a country?

answer

One visible indicator of economic risk is the level of business and government debt in the country.

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BA 390 Chapter 3 – Flashcards

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