Political System and Economic Growth
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Questions and Answers

Which type of economic system is characterized by the government playing a dominant role in the production of goods and services?

  • Mixed economy
  • Free economy
  • Market economy
  • Command economy (correct)

In a market economy, what determines prices and helps achieve market clearance?

  • Government regulations
  • Global exchange rates
  • Supply and demand (correct)
  • Monopoly power

Which type of economic system contains features of both command economies and market economies?

  • Socialist economy
  • Mixed economy (correct)
  • Capitalist economy
  • Planned economy

In market-oriented economies, what key function does the government typically provide?

<p>Extensive public welfare system (A)</p> Signup and view all the answers

Which type of political system has shown success in developing a market economy with protected property rights in certain Asian countries?

<p>Totalitarian regimes with strong property rights protection (C)</p> Signup and view all the answers

What is a key element that impacts international business according to the text?

<p>Technological advancements (C)</p> Signup and view all the answers

Which of the following is NOT considered a welfare expenditure according to the text?

<p>Education subsidies (C)</p> Signup and view all the answers

What percentage of GDP in France did welfare expenditures amount to in 2019?

<p>31% (B)</p> Signup and view all the answers

Why did American and European governments acquire stakes in numerous companies during the 2008 global financial crisis?

<p>To rescue financially struggling companies (C)</p> Signup and view all the answers

In times of economic crises, what do welfare states typically do to support financially ailing corporations and individuals?

<p>Offer financial support (C)</p> Signup and view all the answers

What does 'economic development' refer to according to the text?

<p>Transformation from low-income to modern industrial economies (D)</p> Signup and view all the answers

Which measure is commonly used to assess a country’s economic development?

<p>Gross National Income (GNI) (A)</p> Signup and view all the answers

What is the principle used to make judicial decisions as mentioned in the text?

<p>Right is what serves the people (A)</p> Signup and view all the answers

How do private property rights impact entrepreneurship and innovation?

<p>Incentivize entrepreneurship and innovation (A)</p> Signup and view all the answers

In a democracy, what role does a limited government play?

<p>Performs only essential functions for public good (B)</p> Signup and view all the answers

How are property rights defined within democratic societies?

<p>By market forces (D)</p> Signup and view all the answers

What is the correlation suggested by various scholars mentioned in the text?

<p>Correlation between democracy, economic freedom, and higher living standards (C)</p> Signup and view all the answers

What is the function of a legal system as described in the text?

<p>System for interpreting and enforcing laws (A)</p> Signup and view all the answers

What are the limitations of absolute and comparative advantage trade theories based on the text?

<p>Not accounting for transportation costs and differentiating features of goods (D)</p> Signup and view all the answers

Which aspect is NOT considered by absolute and comparative advantage trade theories according to the text?

<p>Branding and differentiating features (D)</p> Signup and view all the answers

How can advantages be achieved on a firm level according to the text?

<p>By achieving economies of scale and employing competitive business strategies (D)</p> Signup and view all the answers

What can distort free trade according to the text?

<p>Implementing protectionist measures like subsidies or tariffs (A)</p> Signup and view all the answers

Which of the following is an example of a freely tradeable service according to the text?

<p>Banking services (C)</p> Signup and view all the answers

What aspect do absolute and comparative advantage trade theories fail to consider according to the text?

<p>Branding and differentiating features of products (A)</p> Signup and view all the answers

What is the main objective of a Differentiation strategy?

<p>To obtain a competitive advantage by offering unique products or services (B)</p> Signup and view all the answers

Which of the following is NOT an example of a tax incentive mentioned in the text?

<p>Import tariffs reduction on raw materials (A)</p> Signup and view all the answers

What type of policies are mentioned as part of a national industrial policy?

<p>Monetary and fiscal policies (B)</p> Signup and view all the answers

How did European governments support Airbus in the aviation industry?

<p>By providing subsidies for job creation and technology advancement (D)</p> Signup and view all the answers

What effect did devaluating the national currency have according to the text?

<p>Promote exports (C)</p> Signup and view all the answers

How did the Differentiation strategy contribute to Airbus's success compared to Boeing?

<p>By offering distinguishable products through government support (A)</p> Signup and view all the answers

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