Global Business Chapter 3

The government of Cafor wants to create a market-based economic system. To do so, the government should

adopt privatization.

Lindsey lives in a country where the state owns all the means of production and there is little incentive for entrepreneurial activity. Lindsey lives in a

planned economy.

A black economy occurs when

citizens engage in barter agreements to avoid paying taxes.

More nations have gravitated toward the market-based model because

command and mixed economies failed to deliver sustained economic performance.

In the context of global economy, what has been widely accepted since the late 1980s?

deregulation of economies

What is an accurate description of how the political economy of many of the world's nation-states has changed radically since the late 1980s?

There has been a move away from centrally planned and mixed economies and toward a more free market economic model.

People in the West tend to associate a representative democracy with

a market economic system.

Economist Hernando de Soto believes that the benefits of capitalism will not be achieved until

property rights are better protected.

The base for the adjustment of purchasing power parity is the cost of living in

the United States.

________ is broadly defined as the development of new products, processes, organizations, management practices, and strategies.

Innovation

A country that has __________ is an unattractive choice for international business.

a closed totalitarian dictatorship

Dominick has analyzed the overall attractiveness of doing business with three possible countries and has determined that Country A is the best choice based on the potential for huge economic growth that should occur there because of recent advances in technology. Which factor of overall attractiveness is Dominick basing his decision on?

benefits

A country that abolishes laws that regulate private enterprises and removes price controls is in the process of

deregulation

The Simpson Group decided against doing business with a country in Central America because the country exercises tight control over prices and output, prohibits private enterprises from operating in most sectors of the economy, and severely restricts foreign direct investment and international trade. In other words, this country is against the practice of

deregulation

The main reason that gross national income figures can be misleading is because they

don't consider differences in the cost of living.

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

economically advanced countries.

When Steve Jobs and Steve Wozniak cofounded Apple, they were acting as __________ since they were the first to commercialize this innovative new product.

entrepreneurs

The risks of doing business are most likely to be the highest in a country that

faces frequent changes in government and government policy.

One common measure of economic development is a country's

gross national income.

The development of new products, processes, organizations, management practices, and strategies is called

innovation

Diabetic Daily Inc., based in the United States, hesitates to enter into a joint venture with Azpak Limited, a Sri Lankan company, due to inadequate protection of intellectual property rights. Diabetic Daily Inc. is trying to avoid what type of risk?

legal

Purchasing power parity is used to adjust gross national income in order to make a more direct comparison of ________ in various countries.

living standards

In 2017, the Brazilian government transferred the state ownership of the electric company, the airports, highways, and ports to private investors to stimulate the economy. This is an example of

privatization

The nation of Talden sold Talden Communications, a state-owned monopoly, to private investors. This is an example of

privatization

What started in Great Britain in the early 1980s when Prime Minister Margaret Thatcher started to sell state-owned assets such as the British telephone company?

privatization

Anastasia asked her assistant to determine the gross national income of six different countries by evaluating the GNI against the cost of living in the United States. What measure is Anastasia asking her assistant to use?

purchasing power parity

In 2017, if the GNI per capita of India was $1,820 and its PPP per capita was $7,060, this means that the cost of living in India was lower than the cost of living in

the United States.

Gross national income figures should be carefully evaluated because they don't take into account differences in

the cost of living.

A country that has __________ lowers the risk of doing business in that country.

the presence of a strong legal system

The spread of democracy among countries is most likely to lead to

the promotion of greater competition.

To calculate purchasing power parity, the figure is adjusted based on

the status of the cost of living in the United States