Global Political Economy: Key Concepts and Dynamics
A country’s political economy and culture are not independent of each other. False
It is possible to have democratic societies that emphasize a mix of collectivism and individualism. False
Communists did not believe that socialism could be achieved by democratic means and did not turn their backs on violent revolution and dictatorship. False
In an individualist society, the welfare of society is best served by letting people pursue their own economic self-interest. True
The central message of collectivism is not that individual economic and political freedoms are the ground rules on which a society should be based. False
There is not a global trend of societies shifting from individualism toward collectivism. False
It is possible to have a democratic state where collective values predominate. True
It is possible to have a totalitarian state that is hostile to collectivism and where some degree of individualism is encouraged. True
The most practical form of democracy is not direct democracy. False
A representative democracy is the most common form of democracy. True
In a market economy, if demand for a product exceeds supply, prices will rise, signaling to producers to produce more. True
The number of command economies has fallen dramatically since the demise of communism in the late 1980s. True
Because international businesses are headquartered in different countries, a nation’s legal system is usually of great interest to international business managers. False
A country’s legal system can affect the attractiveness of a country as an investment site and/or market. True
Collectivist-inclined totalitarian states tend not to be pro-private enterprise and pro-consumer. False
In democratic states where individualism is the dominant political philosophy, states tend not to enact laws that severely restrict private enterprise. False
Judges under a civil law system have less flexibility than those under a common law system. True
In a common law system, judges have the power to interpret the law. True
A civil law system tends not to be more adversarial than a common law system. False
Contracts under a civil law system tend to be very detailed with all contingencies spelled out. False
The United Nations CISG establishes a uniform set of rules governing certain aspects of the making and performance of everyday commercial contracts between sellers and buyers who have their places of business in different nations. True
Not all of the world’s larger trading nations have ratified CISG. False
The United Kingdom is not a strong supporter of CISG. False
To facilitate international business, property rights are not defined in a consistent way across countries. False
High levels of corruption significantly reduce foreign direct investment, the level of international trade, and the economic growth rate in a country. True
The Foreign Corrupt Practices Act allows for grease payments. True
Thanks to the World Intellectual Property Organization, enforcement of intellectual property rights is not strong across the globe. False
GNI and PPP data are not useful because they do not provide a dynamic analysis of economic development. False
The HDI is based on life expectancy at birth, educational attainment, and whether average incomes are sufficient to meet the basic needs of life in a country. True
In a planned economy, the state owns all means of production. True
There is a strong relationship between economic freedom and economic growth. True
A democracy is not essential for economic growth. False
Since the 1980s, the political economy of many nations has seen a shift away from centrally planned and mixed economies toward more free market economic models. True
One of the reasons for the spread of democracy is the emergence of increasingly prosperous middle and working classes who have pushed for democratic reforms. True
According to political scientist Samuel Huntington’s thesis, global terrorism is a product of the tension between civilizations and the clash of value systems and ideology. True
Transformation from centrally planned command economies to market-based economies can be attributed to the fact that command and mixed economies failed to deliver the sustained economic performance achieved by countries adopting market-based systems. True
Economic freedom does not necessarily equate with political freedom. False
Deregulation involves removing legal restrictions to the free play of markets, the establishment of private enterprises, and the manner in which private enterprises operate. True
Today, global changes in the political economy are not characterized by free markets and democracy with command economies and totalitarian dictatorships having completely disappeared. False
The costs of doing business in a country tend to be greater where political payoffs are required to gain market access. True