Political Economy

Question 1

Development of political and economical systems

Answer 1

more political systems are moving towards individualism, and more economic systems are moving towards market-based approaches.

Question 2

Economic system (3)

Answer 2

Market

• productive activities are privately owned
• supply and demand focused

Command
-goods and services, as well their prices, are controlled by governments

Mixed

• combination, reflective of most
• government takes some control if/as needed

Question 3

Legal system (3)

Answer 3

Systems

• Common law
• -> flexible and open for interpretation
• Civil law
• ->fix, not open for interpretation
• Theocratic law
• -> religious orientated

Question 4

Issues of legal systems (3)

Answer 4

Product safety and liabilities standards
Contracts
Property rights

Question 5

Contract law specifies: (2)

Answer 5

• Conditions under which an exchange will happen

- Rights/Obligations of parties

Question 6

Basic property rights (4)

Answer 6

Sell, rent, exclusive use, destroy.

Question 7

Violation on property rights

Answer 7

private actions
public actions:
-Legal mechanisms
-Illegal means: corruption

Question 8

Impacts of corruption

Answer 8

• reduce foreign direct investment

- rates of economic growth

Question 9

CISG (Convention on Contracts for the International Sale of Goods)

Answer 9

• Contract is automatically governed by the CISG unless the countries indicate otherwise
• UN countries

Question 10

FCPA Foreign Corrupt Practices Act

Answer 10

-Contains antibribery prohibitions and accounting requirements
- US issuers and domestic concerns must obey the FCPA
Even though no actions or bribes paid in the US

Question 11

What is Competitevness

Answer 11

“Competitiveness is defined as the set of institutions, policies and factors that determine the level of productivity of a country.”