Chapter 2

The social democrats believed that socialism could be achieved only through violent revolution and totalitarian dictatorship.

False

The two dimensions, according to which the political systems can be assessed, collectivism-individualism and democratic-totalitarian are independent of each other

False

A theocratic law system is one in which the law is based on religious teachings.

True

In a market economy, if demand for a product exceeds supply, prices will rise, signaling to producers to produce more.

True

In an individualist society, the welfare of society is best served by letting people pursue their own economic self-interest.

True

In mixed economies, governments also tend to take into state ownership troubled firms whose continued operation is thought to be vital to national interests.

True

In practical terms, individualism translates into an advocacy for democratic political systems and market economics

True

In the 1970s, the United States passed the Foreign Corrupt Practices Act which requires all publicly traded companies, whether or not they are involved in international trade, to keep detailed records that would reveal whether a violation of the act has occurred

True

It is possible to have a democratic political system that emphasizes a mix of collectivism and individualism

True

Judges in a common law system have the power to interpret the law so that it applies to the unique circumstances of an individual case

True

Many of the world's larger trading nations, including Japan and the United Kingdom, have not ratified the United Nations Convention on Contracts for the International Sale of Goods (CIGS).

True

Modern socialists trace their intellectual roots to Karl Marx (1818-83), although socialist thought clearly predates Marx

True

Most modern democratic states practice representative democracy

True

Patents, copyrights, and trademarks establish ownership rights over intellectual property.

True

Product liability sets certain safety standards to which a product must adhere.

True

Property rights can be violated in two ways—through private action and through public action.

True

Property rights refer to the legal rights over the use to which a resource is put and over the use made of any income that may be derived from that resource.

True

The number of command economies has fallen dramatically since the demise of communism in the late 1980s.

True

The parties to an agreement normally resort to contract law when one party feels the other has violated either the letter or the spirit of an agreement.

True

When collectivism is emphasized, an individual's right to do something may be restricted on the grounds that it runs counter to "the good of society."

True

When law courts interpret common law, they do so with regard to tradition, precedent, and custom

True

Under the _____, cases are judged with reference to three characteristics: tradition, precedent, and custom.

common law system

Peoples' right to protest on issues of accountability in public expenditure would be possible in a _____ political set-up.

democratic

The tenet of _____ is that the welfare of society is best served by letting people pursue their own economic self-interest.

individualism

An economy in which the interaction of supply and demand determines the quantity in which goods and services are produced is called a _____.

market economy

In a _____ economy, certain sectors of the economy are left to private ownership and free market mechanisms while other sectors have significant state ownership and government planning.

mixed

The Foreign Corrupt Practices Act does not allow for grease payments.

False

The central message of collectivism is that individual economic and political freedoms are the ground rules on which a society should be based

False

A nation's legal system is usually of very little interest to international business managers, because international businesses are headquartered in different countries

False

Contracts under a civil law system tend to be very detailed with all contingencies spelled out.

False

In a totalitarian country, there are safeguards to protect an individual's right to freedom of expression, opinion, and organization.

False

Judges under a civil law system have more flexibility than those under a common law system.

False

Patents discourage companies from committing themselves to extensive basic research

False

Product liability can be much lower if a product does not conform to required safety standards.

False

Which of the following is a feature of a democracy?

Governance by people or elected representatives.

Which of the following areas of international trade is regulated by the Foreign Corrupt Practices Act?

Preventing bribery and unethical acts in the conduct of international business.

Which system of government generally permits some individual economic freedom but restricts individual political freedom, frequently on the grounds that it would lead to the rise of communism?

Right-wing totalitarianism

_____ refers to a state where political power is monopolized by a party, group, or individual that governs according to religious principles.

Theocratic totalitarianism

Which of the following statements about the legal systems of countries is NOT true?

They are almost the same for all countries.

A _____ system is based on a very detailed set of laws organized into codes.

civil law

A political system that prioritizes the needs of the society over individual freedoms is called _____.

collectivism

Totalitarianism

is a form of government in which one person or political party exercises absolute control over all spheres of human life.

Antitrust laws in the United States are designed to:

outlaw monopolies.

A _____ grants the inventor of a new product or process exclusive rights for a defined period of time to the manufacture, use, or sale of that invention.

patent

Interdependent political, economic, and legal systems of a country make up its:

political economy.

In Russia in the chaotic period following the collapse of communism, an outdated legal system, coupled with a weak police force and judicial system, allowed the Russian Mafia to demand "protection money" from business owners. Any business owner who rebelled had to face violent retribution. This violation of property rights exemplifies _____.

private action

In several Western democracies, the poor performance of state-owned enterprises, because of protection from competition and guaranteed government financial support, led to ________.

privatization

In a pure market economy:

production is determined by the interaction of supply and demand.

Violation of property rights done through legal mechanisms such as levying excessive taxation and requiring expensive licenses or permits from property holders is called ________.

public action

A civil law system tends to be less adversarial than a common law system, since _____.

the judges' decisions are based on detailed legal codes