QUESTION The collapse of which of the following in eastern Europe was precipitated by the growing gulf between the vibrant and wealthy economies of the West and the stagnant economies of the East? A. Democracy B. Communism C. Free economy D. Capitalism E. Individualism ANSWER B The collapse of communism in eastern Europe was […]
QUESTION Which of the following statements is true about innovations and entrepreneurship? A. A command economy creates greater incentives for innovation and entrepreneurship than a market economy. B. If a country’s economy is to sustain long-run economic growth, the business environment must restrict entrepreneurial activity. C. A high level of entrepreneurial activity leads to a […]
QUESTION “Not all democracies are free, as some still restrict certain political and civil liberties.” Which of the following countries best fits this argument? A. Australia B. United States C. Great Britain D. Russia E. Canada ANSWER D Not all democracies are free, according to Freedom House, because some democracies still restrict certain political […]
QUESTION Which of the following creates an unfavorable environment for innovations and entrepreneurship? A. Market economy B. Economic freedom C. State monopoly in production D. Privatization E. Strong legal protection of property rights ANSWER C In a planned economy, the state owns all means of production. Consequently, entrepreneurial individuals have few economic incentives to […]
QUESTION According to the author Francis Fukuyama, the world is most likely witnessing the end of: A. free market economies. B. capitalism. C. liberal democracies. D. privatization. E. humanity’s ideological evolution. ANSWER E Author Francis Fukuyama has argued, “We may be witnessing . . . the end of history as such: that is, the […]
QUESTION Which of the following creates an environment that is conducive to product and process innovations and to entrepreneurial activity? A. Communism B. Centrally planned economy C. Privatization D. Command economy E. Lack of strong property rights ANSWER C Economic stagnation occurred in many mixed economies in those sectors where the state had a […]
QUESTION The collapse of communism will result in the new world order that will be dominated by a universal civilization characterized by democratic regimes and free market capitalism, according to: A. Amartya Sen. B. Samuel Huntington. C. Jeffrey Sachs. D. Francis Fukuyama. E. Adam Smith. ANSWER D Author Francis Fukuyama has envisioned a more […]
QUESTION In the context of political economy, the past three decades have seen a general move toward: A. autocratic forms of government. B. command-based economic reforms. C. adoption of legal systems that better enforce property rights. D. an environment which is unfavorable for international business. E. military parties monopolizing political power worldwide. ANSWER C […]
QUESTION One common measure of economic development is a country’s: A. gender ratio. B. gross national income. C. infant mortality rate. D. population density. E. total geographical area. ANSWER B One common measure of economic development is a country’s gross national income (GNI) per head of population.
QUESTION Which of the following measures the total annual income received by residents of a country and is regarded as a yardstick for the economic activity of a country? A. Income elasticity of demand B. Cash reserve ratio C. Net cash flow ratio D. Gross national income E. Income equity ratio ANSWER D GNI […]
