Exam 3: Political Economy and Economic Development

Sony was a pioneer in the portable music market segment. Sony's Walkman was an innovative product which created a new category altogether and made Sony a technological leader. This gave the company an edge over other consumer electronics brands that introduced portable music players for a very long time. In this example, Sony had the:

Which of the following statement pertaining to innovation and entrepreneurship is NOT true?

Gross national income per-capita data take into account differences in the cost of living.

In a planned economy, the means of production are owned by private individuals.

The government of a country takes over the airport security industries following a major terrorist attack, to improve airport security. This is an example of privatization.

____, a Nobel Prize-winning economist, has argued that development is not just an economic process, but it is a political one as well.

The finance minister of a country considers several large, state-owned iron manufacturing units to be inefficient and a source of corruption. To generate resources for public expenditure and promote economic growth, the government decides to auction an entire iron manufacturing plant to sell it to a strategic investor. This process exemplifies ____.

A market economy encourages innovation because ____.

Which of the following is a characteristic of a command economy?

In mixed economies, in certain sectors the state set prices, owned businesses, limited private enterprise, restricted investment by foreigners, and restricted international trade.

Most property in poor countries is owned legally by investors.

Countries with free market economies in which property rights are protected tend to achieve lower economic growth rates than command economies where property rights are poorly protected.

_____ is required for a business environment to be conducive to innovation and entrepreneurial activity.

According to political scientist Samuel Huntington's thesis, global terrorism is a product of the tension between civilizations and the clash of value systems and ideology.

Economic risks are independent of political risk.

Since the 1980s, there has been a transformation from centrally planned command economies to market-based economies. What is the rationale for this transformation?

According to political scientist Samuel Huntington, the rise of Islamic fundamentalism is a response to ____.

Discuss the three main reasons for the spread of democracy.

In a command economy, the prices are determined by the free interplay of demand and supply.

The economic freedom associated with a market economy creates greater incentives for innovation and entrepreneurship than either a planned or a mixed economy.