Test Bank for Global Business Today 7th
Edition by Hill
Chapter 02
National Differences in Political Economy
True / False Questions
1. The term political economy is used to stress the fact that the political, economic, and legal
systems of a country are interdependent.
True False
2. Largely, political systems that emphasize collectivism tend to be democratic, while political
systems that place a high value on individualism tend to be totalitarian.
True False
3. Plato did not equate collectivism with equality.
True False
4. In the early twentieth century, the socialist ideology split into two broad camps:
communists and capitalists.
True False
5. Social democrats believed that socialism could be achieved only through violent revolution
and totalitarian dictatorship.
True False
6. The American Declaration of Independence embodies the ideals of collectivism.
True False
7. One of the tenets of collectivism is that the welfare of society is best served by letting
people pursue their own economic self-interest.
True False
2-1
, Test Bank for Global Business Today 7th
Edition by Hill
8. In practical terms, individualism translates into an advocacy for democratic political
systems and free market economics.
True False
9. The United States practices pure democracy.
True False
10. China, Vietnam, Laos, North Korea, and Cuba are no longer totalitarian states.
True False
11. The most common form of theocratic totalitarianism is based on Islam and is exemplified
by states such as Iran and Saudi Arabia.
True False
12. Tribal totalitarianism is found in states where political power is monopolized by a party,
group, or individual that governs according to religious principles.
True False
13. Right-wing totalitarianism generally permits some individual economic freedom but
restricts individual political freedom.
True False
14. The fascist regimes that ruled Germany and Italy in the 1930s and 1940s are examples of
theocratic totalitarianism.
True False
2-2
, Test Bank for Global Business Today 7th
Edition by Hill
15. Most right-wing dictatorships display an affinity for socialist or communist ideas.
True False
16. In a pure market economy, all productive activities are privately owned, as opposed to
being owned by the state.
True False
17. In a pure command economy, the goods and services that a country produces, the quantity
in which they are produced, and the prices at which they are sold are all dictated by the
interaction of demand and supply.
True False
18. Command economies are dynamic economic systems that encourage innovation.
True False
19. Judges in a common law system have the power to interpret the law so that it applies to
the unique circumstances of an individual case.
True False
20. A common law system tends to be less adversarial than a civil law system.
True False
21. Many Muslim countries have legal systems that are a blend of Islamic law and a common
or civil law system.
True False
2-3
, Test Bank for Global Business Today 7th
Edition by Hill
22. Contracts drafted under a common law framework tend to be very detailed with all
contingencies spelled out.
True False
23. It is more expensive to draw up contracts in a civil law jurisdiction.
True False
24. Property refers to a resource over which an individual or business holds a legal title.
True False
25. In the context of property rights, public action refers to theft, piracy, blackmail, and the
like by private individuals or groups.
True False
26. Public action to violate property rights can be done through legal and illegal mechanisms.
True False
27. Economic evidence suggests that high levels of corruption indirectly have a positive effect
on foreign direct investment, level of international trade, and economic growth rate in a
country.
True False
28. According to the Foreign Corrupt Practices Act, it is illegal to make grease payments to
expedite or secure the performance of a routine governmental action.
True False
2-4
Edition by Hill
Chapter 02
National Differences in Political Economy
True / False Questions
1. The term political economy is used to stress the fact that the political, economic, and legal
systems of a country are interdependent.
True False
2. Largely, political systems that emphasize collectivism tend to be democratic, while political
systems that place a high value on individualism tend to be totalitarian.
True False
3. Plato did not equate collectivism with equality.
True False
4. In the early twentieth century, the socialist ideology split into two broad camps:
communists and capitalists.
True False
5. Social democrats believed that socialism could be achieved only through violent revolution
and totalitarian dictatorship.
True False
6. The American Declaration of Independence embodies the ideals of collectivism.
True False
7. One of the tenets of collectivism is that the welfare of society is best served by letting
people pursue their own economic self-interest.
True False
2-1
, Test Bank for Global Business Today 7th
Edition by Hill
8. In practical terms, individualism translates into an advocacy for democratic political
systems and free market economics.
True False
9. The United States practices pure democracy.
True False
10. China, Vietnam, Laos, North Korea, and Cuba are no longer totalitarian states.
True False
11. The most common form of theocratic totalitarianism is based on Islam and is exemplified
by states such as Iran and Saudi Arabia.
True False
12. Tribal totalitarianism is found in states where political power is monopolized by a party,
group, or individual that governs according to religious principles.
True False
13. Right-wing totalitarianism generally permits some individual economic freedom but
restricts individual political freedom.
True False
14. The fascist regimes that ruled Germany and Italy in the 1930s and 1940s are examples of
theocratic totalitarianism.
True False
2-2
, Test Bank for Global Business Today 7th
Edition by Hill
15. Most right-wing dictatorships display an affinity for socialist or communist ideas.
True False
16. In a pure market economy, all productive activities are privately owned, as opposed to
being owned by the state.
True False
17. In a pure command economy, the goods and services that a country produces, the quantity
in which they are produced, and the prices at which they are sold are all dictated by the
interaction of demand and supply.
True False
18. Command economies are dynamic economic systems that encourage innovation.
True False
19. Judges in a common law system have the power to interpret the law so that it applies to
the unique circumstances of an individual case.
True False
20. A common law system tends to be less adversarial than a civil law system.
True False
21. Many Muslim countries have legal systems that are a blend of Islamic law and a common
or civil law system.
True False
2-3
, Test Bank for Global Business Today 7th
Edition by Hill
22. Contracts drafted under a common law framework tend to be very detailed with all
contingencies spelled out.
True False
23. It is more expensive to draw up contracts in a civil law jurisdiction.
True False
24. Property refers to a resource over which an individual or business holds a legal title.
True False
25. In the context of property rights, public action refers to theft, piracy, blackmail, and the
like by private individuals or groups.
True False
26. Public action to violate property rights can be done through legal and illegal mechanisms.
True False
27. Economic evidence suggests that high levels of corruption indirectly have a positive effect
on foreign direct investment, level of international trade, and economic growth rate in a
country.
True False
28. According to the Foreign Corrupt Practices Act, it is illegal to make grease payments to
expedite or secure the performance of a routine governmental action.
True False
2-4
