Lecture 9 Flashcards
What are the four major economic systems?
Planned economy
Liberal market economy
Social market economy
Mixed economy
What are the main characteristics of a planned economy?
State control
Collectivist ideology
What are the main characteristics of a liberal market economy?
Capitalist free market
Individualist
Democratic values
Minimum government intervention
What are the main characteristics of a social market economy?
Markets tempered by social values
Democratic values
Government welfare role
What are the characteristics of a mixed economy?
Capitalist elements
Elements of state control
Weak individualism
Which countries have a planned economy?
Cuba and North Korea
Which countries have a liberal market economy?
US
UK
Which countries have a social market economy?
Scandinavia
Northern Europe
Which countries have a mixed economy?
China
India
Where is 75% of the world’s FDI market?
In 9 developed countries
Which country has accounted for 1/3 of the world’s FDI since 2000?
China
What percentage of the world’s FDI flow does Africa receive?
7%
What are the four critical dimensions that determine the attractiveness of a host country to a MNC?
Macroeconomic risk factors (market size+growth, openness, balanced trade)
Political risk factors (rule of law, legal transparency, stability, conflict)
Business risk factors (labour productivity, tax policy, bureaucratic inefficiency)
Transport and communication infrastructure
What are the four things that MNCs really dislike?
Nationalism
Socialism
Discriminatory policies (ownership and transfer restrictions, performance requirements)
Governmental disorganisation and inefficiency
