Exam 3: Political Economy and Economic Development

Which of the following helps in adjusting GNI such that it accounts for the differences in the cost of living?

Privatization reduces the incentive of business owners to increase productivity, enter new markets, and to exit losing ones.

By identifying and investing early in a potential future economic star, international firms can build brand loyalty and gain experience in that country's business practices.

Peruvian development economist Hernando de Soto has argued that the chronic inability of property owners to establish legal title to the property they own is a key problem for innovation, and entrepreneurial activity in developing nations.

Privatization refers to the process of hiring private management consultancy firms to manage state-owned enterprises.

GNI per person figures can be misleading because ____.

Why does education lead to economic development?

Which of the following factors is NOT likely to make a country a more attractive location for international business?

Economic freedom necessarily equates with political freedom.

Studies of privatization in central Europe have shown that the process often fails to deliver predicted benefits if the newly privatized firms continue to receive subsidies from the state and if they are protected from foreign competition.

_____ involves removing legal restrictions to the free play of markets, the establishment of private enterprises, and the manner in which private enterprises operate.

Many states in Asia, Latin America, and Western Europe have shifted away from a mixed economy to a market-based economy. Which of the following measures is most likely to be promoted by such states?

In Sen's view, development is an economic process that should be assessed by material output measures such as GNI per capita.

What are the conditions required to encourage innovation and entrepreneurship?

First-mover advantages are the advantages that accrue to early entrants into a market.

Since the late 1980s, there has been a spread of democracy. This is because ____.

The HDI is based on all of the following measures EXCEPT:

A country's economic system and property rights regime are reasonably good predictors of economic prospects.

How does the ownership structure of newly privatized firms affect its functioning?

Democracy is one of the consequences of economic growth and progress.