Chapter 3

Question 1

Political economy

Answer 1

Political, economic and legal systems of a country are interdependent: they interact with and influence each other, and in doing so, they affect the level economic well being.

Question 2

Political system

Answer 2

The system of government in a nation.

Question 3

Collectivism

Answer 3

A political system that stresses the primacy of collective goals over individual goals.

Question 4

Communist

Answer 4

They believe that socialism could be achieved only through violent revolution and totalitarian dictatorship.

Question 5

Social democrats

Answer 5

They have committed themselves to achieving socialism by democratic means, turning their backs in violent revolutions and dictatorship.

Question 6

Privatization

Answer 6

State-owned enterprises being sold to private enterprises.

Question 7

Individualism

Answer 7

This refers to the philosophy that an individual should have freedom in his or her economic and political pursuit.

Question 8

Democracy

Answer 8

This refers to a political system in which government is by the people, exercised either directly or through elected representatives.

Question 9

Totalitarianism

Answer 9

This is a form of government in which one person or political party exercises absolute control over all spheres of human life and prohibits opposing political parties.

Question 10

Representative democracy

Answer 10

Citizens periodically elect individuals to represent them.

Question 11

Theocratic totalitarianism

Answer 11

This is found in states where political power is monopolized by a party. (The highest power like the pope or Islamic principles)

Question 12

Tribal totalitarianism

Answer 12

This occurs when a political party that represents the interests of a particular tribe (not always the majority tribe) monopolizes power.

Question 13

Right-wing totalitarianism

Answer 13

This generally permits some individual economic freedom but restricts individual political freedom, frequently on the grounds that it would lead to the rise of communism.

Question 14

Market economy

Answer 14

All productive activities are privately owned, as opposed to being owned by the state. Production is determined by supply and demand.

Question 15

Command economy

Answer 15

The government plans the goods and services that the country produces, and the prices at which they are sold. All businesses are state-owned. Historically found in communist economies

Question 16

Legal system

Answer 16

This refers to the rules or laws that regulate behaviour along with the processed by which the laws are enforced and through which redress for grievances is obtained.

Question 17

Common law

Answer 17

This is based on traditions, precedents and customs ( For example Great Britain)

Question 18

Civil law system

Answer 18

This is based on a details set on laws organized into codes

Question 19

Theocratic law system

Answer 19

This based on religious teachings. ( Islamic laws id the most widely practised theoretical legal system in the most modern world)

Question 20

Contract

Answer 20

This is a document that specifies the conditions under the exchange that occurs and details the rights and obligations of the parties involved.

Question 21

Contract law

Answer 21

This is the body of law when one party feels the other has violated either the letter of the spirit of an agreement.

Question 22

United Nations Convention on Contract for the International Sale of Goods (CISG)

Answer 22

The CISG established a uniform set of rules governing certain aspects of the making and performance of everyday commercial contract between sellers and buyers who have their places of business in different nations.

Question 23

Property Rights

Answer 23

This refers to the legal right over the use to which a resource is put and over the use made of any income that may be derived from the resource.

Question 24

Private action

Answer 24

This refers to theft, piracy, blackmail and the like by private individuals or groups.

Question 25

Public action

Answer 25

To violate property rights occurs when public officials, such as politicians and government bureaucrats, extort income, resources, or the property itself from property holders.

Question 26

Foreign Corrupt Practices Act (FCPA)

Answer 26

Following the revelations that U.S companies bribed the government in foreign countries in an attempt to win lucrative contracts, the FCPA was passed. ( This law make this illegal to bribe a foreign government official to obtain or maintain business over which that foreign official has authority.