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Chapter 02

National Diferences in Political Economy

True / False Questions

1. The term political economy is used to stress the act that the political,economic, and legal systems o a country are independent o each other.

True alse

2. Political systems that emphasi!e collecti"ism tend to #e democratic, $hilepolitical systems that place a high "alue on indi"idualism tend to #etotalitarian.

True alse

%. Plato did not e&uate collecti"ism $ith e&uality.

True alse

'. (arl )ar* ad"ocated state o$nership o the #asic means o production,distri#ution, and e*change +i.e., #usinesses.

True alse

-. The social democrats#elie"ed that socialism could #e achie"ed only through"iolent re"olution and totalitarian dictatorship.

True alse

. /y the mid10s, communism $as rising $orld$ide.

True alse

. 3ne o the tenets o collecti"ism is that the $elare o society is #est ser"ed #yletting people pursue their o$n economic selinterest.

True alse

4. 5n practical terms, indi"idualism translates into an ad"ocacy or democraticpolitical systems and mar6et economics.

True alse

. The Cold 7ar $as in many respects a $ar #et$een collecti"ism, championed#y the ormer 8o"iet 9nion, and indi"idualism, championed #y the 9nited8tates.

True alse

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10.5n practical terms, collecti"ism creates a more a"ora#le en"ironment orinternational #usinesses to operate in than indi"idualism.

True alse

11.5n a representati"e democracy, elected representati"es $ho ail to perorm

their :o# ade&uately cannot #e "oted out o o;ce at the ne*t election.

True alse

12.5n a totalitarian country, all the constitutional guarantees on $hichrepresentati"e democracies are #uilt

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21.7hen la$ courts interpret ci"il la$, they do so $ith regard to tradition,precedent, and custom.

True alse

22.Contracts drated under a common la$ rame$or6 tend to #e "ery detailed

$ith all contingencies spelled out.

True alse

2%.udges under a ci"il la$ system ha"e less e*i#ility than those under acommon la$ system.

True alse

2'.5slamic la$ is primarily a moral rather than a commercial la$ and is intendedto go"ern all aspects o lie.

True alse

2-.Compared to common la$ system, it is more e*pensi"e to dra$ up contracts in

a ci"il la$ :urisdiction.

True alse

2./y adopting the Contracts or the 5nternational 8ale o oods +C58, a nationsignals to other adopters that it $ill treat the con"ention=s rules as part o itsla$.

True alse

2.7hen >rms do not $ish to accept the Contracts or the 5nternational 8ale o

oods, they oten opt or ar#itration #y a recogni!ed ar#itration court to settlecontract disputes.

True alse

24.Pri"ate action to "iolate property rights occurs $hen pu#lic o;cials, such aspoliticians and go"ernment #ureaucrats, e*tort income, resources, or theproperty itsel rom property holders.

True alse

2./ri#es are legal payments meant to acilitate perormance o duties that therecipients are already o#ligated to perorm.

True alse

%0.5ntellectual property la$s stimulate inno"ation and creati"e $or6.

True alse

%1.The term Fpu#lic actionF reers to the e*clusi"e legal rights o authors,composers, play$rights, artists, and pu#lishers to pu#lish and disperse their$or6 as they see >t.

True alse

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%2.5nternational #usinesses lo##y their respecti"e go"ernments to push orinternational agreements to ensure that intellectual property rights areprotected and that the la$ is enorced.

True alse

%%.7hen intellectual property la$s are la*, >rms are at a greater ris6 o ha"ingtheir ideas stolen #y local entrepreneurs.

True alse

%'.@ia#ility la$s are typically least e*tensi"e in highly de"eloped nations.

True alse

%-.7hen product saety la$s are tougher in a >rm=s home country than in aoreign country, the ethical thing to do is to adhere to homecountrystandards.

True alse

%.The #ene>ts, costs, and ris6s associated $ith doing #usiness in a country areindependent o that country=s political, economic, and legal systems.

True alse

%.3ther things #eing e&ual, a nation $ith democratic political institutions, isclearly more attracti"e as a place in $hich to do #usiness than a nation thatlac6s democratic institutions.

True alse