Test 2

Question 1

Study of how a country manages its affairs by using its political, economic, and legal systems

Answer 1

Political Economy

Question 2

Structures, processes, and activities by which a nation governs itself

Answer 2

Political System

Question 3

Political system in which individuals govern without the support of people, tightly control peoples lives, and do not tolerate opposing viewpoints

Answer 3

Totalitarian System

Question 4

Political system in which a country’s religious leaders are also its political leaders

Answer 4

Theocracy

Question 5

Belief that social and economic equality is obtained through government ownership and regulation of the means of production

Answer 5

Socialism

Question 6

Political system in which government leaders are elected directly by the wide participation of the people or by their representatives

Answer 6

Democracy

Question 7

Belief that ownership of the means of production belongs in the hands of individuals and private businesses

Answer 7

Capitalism

Question 8

Devotion of a people to their nations interests and advancement

Answer 8

Nationalism

Question 9

Legal rights to resources and any income they generate

Answer 9

Property Rights

Question 10

Patents and trademarks

Answer 10

Industrial Property

Question 11

International treaty that protects copyrights

Answer 11

Berne Convention

Question 12

Increase in the economic well being, quality of life, and general welfare of a nations people

Answer 12

Economic Development

Question 13

County that is highly industrialized and highly efficient, and whose people enjoy a high quality of life

Answer 13

Developed Country

Question 14

Newly industrialized countries plus those with the potential to become newly industrialized

Answer 14

Emerging Markets

Question 15

Relative ability of two countries currencies to buy the same “basket” of goods in those two countries

Answer 15

Purchasing power parity (PPP)

Question 16

Likelihood that a society will undergo political change that negatively affects local business activity

Answer 16

Political Risk

Question 17

Government takeover of an entire industry

Answer 17

Nationalization

Question 18

Policy of hiring people to represent a company’s views on political matters

Answer 18

Lobbying

Question 19

Purchase, sale, or exchange of goods and services across national borders

Answer 19

International Trade

Question 20

Condition that results when the value of a nations exports is greater than the value of its imports

Answer 20

Trade Surplus

Question 21

Condition that results when the value of a country’s imports is greater than the value of its exports

Answer 21

Trade deficit

Question 22

Ability of a nation to produce a good more efficiently than any other nation

Answer 22

Absolute Advantage

Question 23

Inability of a nation to produce a good more efficiently than other nations but an ability to produce that good more efficiently than it does any other good

Answer 23

Comparative Advantage

Question 24

Theory stating that a company begins by exploring its product and then later undertakes foreign direct investment as the product moves through its life cycle

Answer 24

International Product Life Cycle

Question 25

Economic and strategic advantage gained by being the first company to enter an industry

Answer 25

First Mover Advantage