Week 3

Question 1

measures total annual income of residents

Answer 1

gross national income

Question 2

development of new products, processes, or strategies

Answer 2

innovation

Question 3

assessment of quality of human life in a country

Answer 3

human development index

Question 4

likelihood of drastic changes in a country’s business environment due to political forces

Answer 4

political risk

Question 5

tightly controlled political practices with denied basic freedoms

Answer 5

not free countries

Question 6

risk that a trading partner will break a contract

Answer 6

legal risk

Question 7

also important in driving economic development besides political and economic systems

Answer 7

geography

Question 8

relationship between economic progress and democracy

a. economic growth leads to the establishment of democratic regimes

b. democracy always leads to economic growth

Answer 8

a. economic growth leads to the establishment of democratic regimes

Question 9

important outcome of economic progress

Answer 9

rise of democracy

Question 10

advantages gained by being the first to enter the market

Answer 10

first mover advantage

Question 11

mismanagement of the economy affecting business environment

Answer 11

economic risk

Question 12

essential for fostering innovation and entrepreneurship

Answer 12

market economy

Question 13

major reason for the spread of market based systems worldwide

a. decline in global trade

b. failure of command and mixed economies

Answer 13

b. failure of command and mixed economies

Question 14

adjustment in gross domestic product per capita

Answer 14

purchasing power parity

Question 15

first commercialize innovations

Answer 15

entrepreneurs

Question 16

removing legal restrictions to the free play markets

Answer 16

deregulations