Chapter 3

People in the West tend to associate a representative democracy with

a market economic system.

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

the promotion of greater competition.

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.

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

a closed totalitarian dictatorship

Nobel Prize-winning economist Amartya Sen would agree that ________ is/are an important factor in development of a country.

basic health care

In many of the world's nation-states, there has been a move away from ________ since the late 1980

centrally planned command economies

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

deregulation.

If a 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, it 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.

When Mark Zuckerberg co-founded Facebook, he was acting as a(n) ________ since he was the first to commercialize this innovative new product.

entrepreneur

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

innovation.

U.S.-based Centra Corporation is hesitant about entering into a licensing agreement with Fission, Inc., a company from another nation, due to the likelihood that Fission will break a contract or expropriate property rights. What specific type of risk is Centra Corporation trying to avoid?

legal

What is one of the three measures used to determine the Human Development Index (HDI) of a country?

life expectancy at birth

ABC Company is hesitant about entering Ukraine, because the country has been experiencing social unrest in recent years. Based on this information, what type of risk is ABC Company trying to avoid?

political

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.

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

property rights are better protected.

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

purchasing power parity

The base for the adjustment of purchasing power parity is 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