Chapter 3 MiGE

The purchasing power parity for different countries is adjusted (up or down) depending upon whether a country's cost of living is lower or higher than the cost of living in the United States. True or False

True

As economies move toward greater privatization, there is a greater likelihood of facing the phenomenon that Japan faced due to the stock market collapse. Privatization transfers assets Multiple Choice a. from state to private owners. b. from private to state owners. c. to local government agencies. d. to international agencies. e. from federal to state owners.

a

If gross national income per capita adjusted for differences in the cost of living is about $13,000 in China, a developing country, and is about $56,000 in the United States, a developed country, then Multiple Choice a. on average, Americans can afford more goods and services than their Chinese counterparts. b. China's economy is growing faster than the U.S. economy. c. China will surpass the United States as the word's largest economy in 4-5 years. d. the United States is rapidly losing economic ground to China. e. on average, Chinese can afford more goods and services than their American counterparts.

a

Which of the following measures the total annual income received by residents of a country and is regarded as a yardstick for the economic activity of a country? Multiple Choice a. gross national income b. net cash flow ratio c. cash reserve ratio d. income elasticity of demand e. income equity ratio

a

Which of the following statements is true of the gross national income (GNI)? Multiple Choice a. GNI per person figures can be misleading because they don't consider differences in the cost of living. b. GNI is an adjustment of the purchasing power parity (PPP). c. GNI measures the total dollar amount of imports coming into a nation. d. GNI allows for a direct comparison of living standards in different countries. e. GNI figures provide an accurate picture of economic development.

a

Rajiv purchased an invention from a group of researchers and was the first to commercialize the innovative new product. According to this information, Rajiv is Multiple Choice a. an entrepreneur. b. a late mover. c. a conformist. d. against privatization. e. against deregulation.

a. an entrepreneur.

GNI figures are helpful in understanding an economy because they Multiple Choice a. allow us to predict economic growth rates. b. tell us how poor a country is relative to another. c. help us understand whether a country is closing the gap in economic growth. d. give a dynamic picture of development. e. allow us to predict income growth in a nation.

b

Japan and other market-based economies enjoy economic growth, but also face greater risks due to Multiple Choice a. lower loan rates. b. lower consumer demand. c. deregulation. d. international trade. e. overemployment.

c

Lamboria Republic is facing a high rate of inflation, and the government debt in the country is also high. As a result, the country's business environment is beginning to deteriorate, and the profits of the business enterprises are hurt. According to this information, Lamboria Republic is facing which of the following type of risk? Multiple Choice a. legal b. demographic c. economic d. ethical e. ethnographic

c

The government of Kimmurak is selling state-owned assets such as TeleKimmurak, a state-owned telecommunications enterprise, to private investors. This is an example of Multiple Choice a. protectionism. b. nationalization. c. privatization. d. communism. e. socialism.

c

The major cause of the economic problems that Japan faces is the Multiple Choice a. overspending of the retired. b. migration to other countries. c. low birthrate and more retired people. d. liberal immigration policy. e. increasing value of the yen.

c

The present base for the adjustment of purchasing power parity is the cost of living in Multiple Choice a. Brazil. b. Russia. c. the United States. d. the United Kingdom. e. China.

c

Which of the following statements reflects how the political economy of many of the world's nation-states has changed radically since the late 1980s? Multiple Choice a. Market-based economic systems have been replaced by command economies. b. Democratic governments have been replaced by totalitarian governments. c. There has been a move away from centrally planned and mixed economies and toward a more free market economic model. d. New communication technologies have increased countries' ability to control access to uncensored information. e. There has been a significant reduction of the middle class.

c

Which of the following typically involves removing price controls; abolishing laws regulating the establishment and operation of private enterprises; and relaxing or removing restrictions on direct investment by foreign enterprises and international trade? Multiple Choice a. disinvestment b. diversification c. deregulation d. debasement e. divestiture

c

Deflation occurs when consumers expect prices to Multiple Choice a. be higher tomorrow than today. b. be unpredictable in the future. c. stay the same. d. be lower tomorrow than today. e. keep up with inflation.

d

In 1989 Japan was an economic superpower; it was Multiple Choice a. known for agricultural exports. b. the third-largest economy. c. known for its oil industry. d. the second-largest economy. e. the largest economy.

d

The Japanese government has tried to stimulate the economy by Multiple Choice a. investing in infrastructure. b. asking other nations for money. c. giving big families allowances. d. cutting interest rates to zero.

d

In 2014, if the PPP per capita of China was $13,170 and the PPP per capita of the United States was $55,860, this means that the Multiple Choice a. GNI per capita was greater in China. b. standard of living in China was better. c .annual average GDP growth rate was lower in China. d. percent of goods and services consumed in the United States was lower. e. cost of living was lower in China.

e