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| 1.
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Selling state-owned assets to private investors is usually sufficient to guarantee economic growth. |
| | A) | True |
| | B) | False |
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| 2.
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First-mover advantages are the advantages that accrue to early entrants to a market. |
| | A) | True |
| | B) | False |
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| 3.
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The need to make bribe-like payments is greater in closed totalitarian states than in open democratic societies where politicians are held accountable by the electorate. |
| | A) | True |
| | B) | False |
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| 4.
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Economic risks are independent of political risks. |
| | A) | True |
| | B) | False |
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| 5.
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The costs and risks associated with doing business in a foreign country are typically lower in economically advanced and politically stable democratic nations and higher in less developed and politically unstable nations. |
| | A) | True |
| | B) | False |
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| 6.
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A country's political, economic, and legal system constitutes its |
| | A) | legal economy |
| | B) | political economy |
| | C) | economic economy |
| | D) | FDI economy |
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| 7.
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The notion of political system refers to |
| | A) | cultural values and norms in a country |
| | B) | a nation's system of government |
| | C) | a nation's economic standards |
| | D) | the military relationship of a country with the rest of the world |
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| 8.
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A nation's political system can be assessed |
| | A) | by measuring the degree to which collectivism is emphasized over individualism and the degree to which the country is democratic versus totalitarian |
| | B) | by measuring the degree to which totalitarianism is emphasized over collectivism and the degree to which the country is democratic versus totalitarian |
| | C) | by identifying whether it is a democracy or a dictatorship |
| | D) | by measuring the degree to which democracy is emphasized over collectivism and the degree to which the country is democratic versus totalitarian |
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| 9.
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Modern _______ trace their intellectual roots to Karl Marx. |
| | A) | separatists |
| | B) | capitalists |
| | C) | individualists |
| | D) | socialists |
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| 10.
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_______ has its roots in the philosophies of Aristotle. |
| | A) | totalitarianism |
| | B) | socialism |
| | C) | individualism |
| | D) | collectivism |
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| 11.
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_________ is a political system in which government is by the people, exercised either directly or through elected representatives. |
| | A) | collectivism |
| | B) | democracy |
| | C) | socialism |
| | D) | totalitarianism |
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| 12.
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For a business environment to be conducive to innovation and entrepreneurial activity, ________ is important. |
| | A) | government intervention in the market |
| | B) | collectivism |
| | C) | state-ownership |
| | D) | a market economy |
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| 13.
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Political scientist ______ predicts a world that is split into different civilizations, each with its own value systems and ideology. |
| | A) | Armatya Sen |
| | B) | Francis Fukuyama |
| | C) | Margaret Thatcher |
| | D) | Samuel Huntington |
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| 14.
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Which of the following countries is not among the world's freest countries? |
| | A) | Luxembourg |
| | B) | Estonia |
| | C) | Turkmenistan |
| | D) | Ireland |
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| 15.
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All of the following countries are at the bottom of the Heritage Foundation's ranking of economic freedom except |
| | A) | Estonia |
| | B) | Myanmar |
| | C) | Turkmenistan |
| | D) | Zimbabwe |
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| 16.
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When a country removes legal restrictions to the free play of markets, the establishment of private enterprises, and the manner in which private enterprises operate, the country has gone through the process of |
| | A) | privatization |
| | B) | freeing markets |
| | C) | increasing attractiveness as a destination for FDI |
| | D) | deregulation |
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| 17.
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A nation may _______ as a means of encouraging business owners to seek gains in economic efficiency. |
| | A) | privatize |
| | B) | downsize |
| | C) | regulate |
| | D) | divest |
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| 18.
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The long-run monetary benefits of doing business in a country are a function of all of the following except |
| | A) | the size of the market |
| | B) | the present wealth of consumers in that market |
| | C) | the likely future wealth of consumers |
| | D) | the legal risk in the country |
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| 19.
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If a company finds that it lacks the brand loyalty and experience necessary to achieve a significant presence in the market it may be suffering from |
| | A) | first-mover advantages |
| | B) | late-mover dis-advantages |
| | C) | foreign market jitters |
| | D) | experience gaps |
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| 20.
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Countries experiencing strikes, demonstrations, and terrorism probably have higher levels of |
| | A) | political risk |
| | B) | industrial risk |
| | C) | commercial risk |
| | D) | economic risk |
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| 21.
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Legal risk |
| | A) | is the likelihood that economic mismanagement will cause drastic changes in a country's business environment that hurt the profit and goals of a particular business enterprise |
| | B) | is the likelihood that political forces will cause drastic changes in country's business environment that adversely affect the profit and goals of a business enterprise |
| | C) | is the likelihood that a trading partner will opportunistically break a contract or expropriate property rights |
| | D) | is the likelihood that commercial mismanagement will cause drastic changes in a country's business environment that will negatively affect the profit and goals of a particular business enterprise is known as social democrats |
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| 22.
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Political risk |
| | A) | is the likelihood that economic mismanagement will cause drastic changes in a country's business environment that hurt the profit and goals of a particular business enterprise |
| | B) | is the likelihood that political forces will cause drastic changes in country's business environment that adversely affect the profit and goals of a business enterprise |
| | C) | is the likelihood that a trading partner will opportunistically break a contract or expropriate property rights |
| | D) | is the likelihood that commercial mismanagement will cause drastic changes in a country's business environment that will negatively affect the profit and goals of a particular business enterprise is known as social democrats |
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| 23.
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The likelihood that economic mismanagement will cause drastic changes in a country's business environment that hurt the profit and goals of a particular business enterprise is known as ______ risk. |
| | A) | economic |
| | B) | legal |
| | C) | political |
| | D) | commercial |
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| 24.
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______ risk was high in Southeast Asia during the 1990s. |
| | A) | political |
| | B) | legal |
| | C) | commercial |
| | D) | economic |
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| 25.
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The likelihood that economic mismanagement will cause drastic changes in a country's business environment that hurt the profit and other goals of a particular business enterprise is an example of |
| | A) | legal risk |
| | B) | political risk |
| | C) | economic risk |
| | D) | fiscal risk |
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