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</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</p> Signup and view all the answers

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

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

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

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

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

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

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

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

    How do private property rights impact entrepreneurship and innovation?

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

    How are property rights defined within democratic societies?

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

    What can distort free trade according to the text?

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

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

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

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