IBUS 311 Chapter 2: National Differences in Political, Economic, and Legal Systems

Market Economy

An economic system in which the interaction of supply and demand determines the quantity in which goods and services are produced.

Grease payments are considered an acceptable form of a a) bribe b) bond c) lien d) tax

a) bribe

_______ refers to a political system in which the citizens exercise power directly or elect representatives to form a governing body. a) Oligarchy b) Democracy c) Totalitarianism d) Monarchy

b) Democracy

According to Karl Marx, the pay of workers in a capitalist society reflects the full value of their labor. a) True b) False

b) False

Which Greek philosopher is credited with advocating the origins of collectivism? a) Socrates b) Plato c) Euphrates d) Aristotle

b) Plato

Communist Totalitarianism

A version of collectivism advocating that socialism can be achieved only through a totalitarian dictatorship.

The purpose of a(n) ________ payment is to facilitate the performance of duties that a government has already obligated itself to do. a) public b) grease c) civil d) patent

b) grease

Which continent has experienced tribal totalitarianism rule? a) Asia b) North America c) Africa d) Europe

c) Africa

Democracy

Political system in which government is by the people, exercised either directly or through elected representatives.

intellectual Property

Products of the mind, ideas (e.g., books, music, computer software, designs, technological know-how). Intellectual property can be protected by patents, copyrights, and trademarks.

What is an accurate depiction of Karl Marx's arguments on socialism? a) In a capitalist society, many people benefit at the expense of a few b) Individual capitalists rather than state-owned enterprises benefit the society as a whole c) Capitalists take the value created by workers for their own use d) State-owned enterprises pay workers lower wages

c) Capitalists take the value created by workers for their own use

_______ often back(s) right-wing totalitarianism governments. a) The church b) Big business c) The military d) Democrats

c) The military

Following World War II, some nations with social democratic governments nationalized some private companies and transformed them into state-owned enterprises to be "run for the public good." This practice was most notable in _________. a) Turkey b) the Soviet Union c) Canada d) Great Britain

d) Great Britain

What statement characterizes social democrats of the early 20th century? a) They believed in achieving socialism by emphasizing individual interests over societal goals b) They supported the idea of establishing a totalitarian dictatorships c) They advocated private ownership of the basic means of production, distribution, and exchange d) They believed in achieving socialism through non-violent means

d) They believed in achieving socialism through non-violent means

Command Economy

An economic system where the allocation of resources, including determination of what goods and services should be produced, and in what quantity, is planned by the government.

Individualism

An emphasis on the importance of guaranteeing individual freedom and self-expression

World Intellectual Property Organization

An international organization whose members sign treaties to agree to protect intellectual property.

Property Rights

Bundle of 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.

History shows that state ownership of the means of production never ran counter to the public interest. a) True b) False

b) False

Paris Convention for the Protection of Industrial Property

International agreement to protect intellectual property.

Product Liability

Involves holding a firm and its officers responsible when a product causes injury, death, or damage.

Common Law

A system of law based on tradition, precedent, and custom; when law courts interpret common law, they do so with regard to these characteristics.

What condition must be present to create an ideal representative democracy? a) Unlimited terms in office for elected representatives b) A nonpolitical state bureaucracy c) Politically influenced court system d) Restricted access to state information

b) A nonpolitical state bureaucracy

According to many business executives, what makes American businesses less competitive in the global marketplace? a) More stringent intellectual property rights outside the United States b) High costs of liability insurance in the United States c) High corruption in the United States compared to China d) The political system in the United States being more consistent with the collectivist ideology

b) High costs of liability insurance in the United States

The communist version of socialism reached its peak in the _______ and by the _______ it was in a state of collapse. a) 2000s; 2010s b) 1950s; 1980s c) 1970s; 1990s d) 1920s; 1960s

c) 1970s; 1990s

United Nations Convention on Contracts for the International Sale of Goods (CISG)

A set of rules governing certain aspects of the making and performance of commercial contracts between sellers and buyers who have their places of businesses in different nations.

________ refers to the process of selling sate-owned enterprises to private investors. a) Customization b) Depersonalization c) Commercialization d) Privatization

d) Privatization

Contract

A document that specifies the conditions under which an exchange is to occur and details the rights and obligations of the parties involved.

Tribal Totalitarianism

A political system in which a party, group, or individual that represents the interests of a particular tribe (ethnic group) monopolizes political power.

Representative Democracy

A political system in which citizens periodically elect individuals to represent them in government.

Product Safety Laws

Set certain safety standards to which a product must adhere.

What are the three main types of legal systems in use around the world? - tribal law - market law - civil law - theocratic law - common law

- civil law - theocratic law - common law

What are the three types of economic systems? - civil economy - command economy - market economy - mixed economy - pseudo economy

- command economy - market economy - mixed economy

What three systems make up the political economy of a country? - religious system - legal system - economic system - political system - social system

- legal system - economic system - political system

Political System

System of government in a nation.

Legal System

System of rules that regulate behavior and the processes by which the laws of a country are enforced and through which redress of grievances is obtained.

Contract Law

The body of law that governs contract enforcement.

Trademarks

The designs and names, often officially registered, by which merchants or manufacturers designate and differentiate their products.

Copyrights

The exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and disperse their work as they see fit.

Public Action

The extortion of income or resources from property holders by public officials, such as politicians and government bureaucrats.

Political Economy

The political, economic, and legal systems of a country.

Privatization

The sale of state-owned enterprises to private investors.

Social Democrats

Those committed to achieving socialism by democratic means.

Socialists

Those who believe in public ownership of the means of production for the common good of society.

Communists

Those who believe socialism can be achieved only through revolution and totalitarian dictatorship

Foreign Corrupt Practices Act (FCPA)

U.S. law regulating behavior regarding the conduct of international business in the taking of bribes and other unethical actions.

Private Action

Violation of property rights through theft, piracy, blackmail, and the like by private individuals or groups.

Right-Wing Totalitarianism

A political system in which political power is monopolized by a party, group, or individual that generally permits individual economic freedom but restricts individual political freedom, including free speech, often on the grounds that it would lead to the rise of communism.

Theocratic Totalitarianism

A political system in which political power is monopolized by a party, group, or individual that governs according to religious principles.

Civil Law System

A system of law based on a very detailed set of written laws and codes.

Totalitarianism

Form of government in which one person or political party exercises absolute control over all spheres of human life and opposing political parties are prohibited.

Patent

Grants the inventor of a new product or process exclusive rights to the manufacture, use, or sale of that invention.

Theocratic Law System

A system of law based on religious teachings.

What is a difference between the contracts drafted in a common law framework and those in a civil law system? a) Contracts drafted in a common law framework tend to be much shorter and less specific in civil law system b) Resolving contract disputes in a common law system tend to be more adversarial than in civil law systems c) Drafting contracts in a common law system tends to be less expensive than in civil law systems d) Contracts in a common law system do not allow judges the flexibility to interpret a dispute based on the prevailing situation

b) Resolving contract disputes in a common law system tend to be more adversarial than in civil law systems

Which statement best exemplifies a political system? a) Typically, countries that place a high value on individualism tend to have a totalitarian political system b) Typically, the political system of a country can be assessed by the degree to which it is democratic or totalitarian c) Typically, the political system of a country has no influence over its economic and legal systems d) Typically, countries that support communism stress the primacy of individual freedom over "the good of society"

b) Typically, the political system of a country can be assessed by the degree to which it is democratic or totalitarian

Compared to contracts drafted in a common law system, contracts in a civil law system a) tend to be highly detailed b) tend to be much shorter and less specific c) allow judges to interpret a contract dispute based on the prevailing situation d) have the highest degree of flexibility

b) tend to be much shorter and less specific

Collectivism

A political system that emphasizes collective goals as opposed to individual goals.

Which of the following statements about political systems is TRUE? a) Typically, political systems that place a high emphasis on individualism tend to be democratic b) Typically, political systems that stress individual freedom over "the good of society" tend to support collectivism c) Typically, political systems that support communism emphasize the importance of guaranteeing individual freedom and self-expression d) Typically, political systems that support a pure command economy emphasize the importance of privately-owned businesses

a) Typically, political systems that place a high emphasis on individualism tend to be democratic

Plato would have agreed that society should be stratified into classes and ________ were best suited to rule society. a) philosophers and soldiers b) the wealthy c) lawyers and physicians d) religious leaders

a) philosophers and soldiers

The system of government in a nation is called the _______ system. a) political b) academic c) social d) economic

a) political

In a pure market economy, production of goods is determined by a) the reigning government body b) the interaction of supply and demand c) monopolistic firms d) availability of resources from outside suppliers

b) the interaction of supply and demand

The Greek philosopher Aristotle argued in favor of individualism by noting that a) unlike private property, communal property receives the greatest care b) communal property is more highly productive than private property c) individual freedom should be restricted and society should be stratified into classes d) diversity and private ownership are beneficial to society

d) diversity and private ownership are beneficial to society