MGCR 382 FINAL EXAM REVIEW/ACTUAL EXAM QUESTIONS
WITH ALL PASSED SOLUTIONS/NEWEST UPDATE
Political Economy - (ANSWERS)term that stresses the political, economic and!@#$%%%%%
legal systems of
a country are interdependent %%%%%%
- they interact with and influence each other
- they affect the level of economic well-being
Political System - (ANSWERS)the system of government in a nation
Can be assessed according to 2 dimensions
1. The degree to which they emphasize collectivism as opposed to individualism
2. The degree to which they are democratic or totalitarian
Dimensions are interrelated
Systems that emphasize collectivism tend to lean toward totalitarianism
Those that place a high value on individualism tend to be democratic
Large gray area exists in the middle - it is possible to have democratic societies that emphasize
a mix of collectivism and individualism
Also, possible to have totalitarian societies that are not collectivist
Collectivism - (ANSWERS)refers to a political system that stresses the primacy of collective
goals over individual goals
When emphasized, the needs of society as a whole are generally viewed as being more
important than individual freedoms
Plato's argument for collectivism
Argued that individual rights should be sacrificed for the good of the majority and that property
should be owned in common
Socialism - (ANSWERS)roots in Karl Marx who argued that the few benefit at the expense of the
many in a capitalist society where individuals freedoms are not restricted
Postulated that the wages earned by the majority of workers in a capitalist society would be
forced down to subsistence levels
Argued that capitalists expropriate for their own use the value created by workers, while paying
workers only subsistence wages in return
The pay of workers does not reflect the full value of their labour
- Socialists believe that sharing ownership of the means of production equally among society
would increase people's quality of life
- advocates that the means of production, distribution, and exchange should be owned or
regulated by the community as a whole
Communists - (ANSWERS)believed that socialism could be achieved only through violent
revolution and totalitarian dictatorship
Social Democrats - (ANSWERS)committed themselves to achieving socialism by democratic
means, turning their backs on violent revolution and dictatorship
,MGCR 382 FINAL EXAM REVIEW/ACTUAL EXAM QUESTIONS
WITH ALL PASSED SOLUTIONS/NEWEST UPDATE
!@#$%%%%%
Social Democracy - (ANSWERS)had the greatest influence in a number of democratic western
%%%%%%
nation ex. Australia, Denmark, Finland, Germany, Great Britain etc. Where social democratic
parties have often held political power
Privatization - (ANSWERS)selling of state-owned enterprises to private investors
Individualism - (ANSWERS)the opposite of collectivism
Refers to a philosophy that an individual should have freedom in their economic and political
pursuits
Stresses that the interests of the individual should take precedence over the interests of the
state
Individual economic and political freedoms are the ground rules on which a society should be
based
Can be traced to an ancient Greek philosopher, Aristotle
Aristotle on Individualism - (ANSWERS)argued that individual diversity and private ownership
are desirable
Argued that private property is more highly productive than communal property and will
stimulate progress
Individualism is built on 2 central tenets
Emphasis on the importance of guaranteeing individual freedom and self-expression
The welfare of society is best served by letting people pursue their own economic self-interest,
as opposed to some collective body ex. Government dictating what is in society's best interest
Democracy - (ANSWERS)refers to a political system in which government is by the people,
exercised either directly or through elected representatives
Totalitarianism
A form of government in which one person or political party exercises absolute control over all
spheres of human life and prohibits opposing political parties
** democracy and individualism go hand in hand, as do the communist version of collectivism
and totalitarianism
Representative Democracy - (ANSWERS)ex. The U.S is a constitutional republic
Citizens periodically elect individuals to represent them
Elected representatives then form a government whose function is to make decisions on behalf
of the electorate
To guarantee the elected representatives can be held accountable for their actions by the
electorate, an ideal representative democracy has a number of safeguards that are typically
enshrined in constitutional law... - (ANSWERS)· an individual's right to freedom of expression,
opinion, and organization
· a free media
,MGCR 382 FINAL EXAM REVIEW/ACTUAL EXAM QUESTIONS
WITH ALL PASSED SOLUTIONS/NEWEST UPDATE
· regular elections in which all eligible citizens are allowed to vote !@#$%%%%%
· universal adult suffrage %%%%%%
· limited terms for elected representatives
· a fair court system that is independent from the political system
· a nonpolitical state bureaucracy
· a nonpolitical police force and armed ser- vice
· relatively free access to state information
**all constitutional guarantees are denied to the citizens in totalitarian countries
Totalitarianism - (ANSWERS)a form of government that attempts to assert total control over the
lives of its citizens
4 major forms of Totalitarianism - (ANSWERS)· Communist the most widespread until recently
· Theocratic found in states where political power is monopolized by a party, group, or individual
that governs according to religious principles
· Tribal arisen from time to time in African countries ex. Zimbabwe, occurs when a political party
that represents the interests of a particular tribe monopolizes power
· Right-wing generally permits some individual economic freedom but restricts individual
political freedom, frequently on the grounds that it would lead to the rise of communism
Pseudo-Democracies - (ANSWERS)world nations that lie between pure democracies and
complete totalitarian system of government
Where authoritarian elements have captured some or much of the machinery of state and use
this in an attempt to deny basic political and civil liberties
Market Economy - (ANSWERS)all productive activities are privately owned, as opposed to being
owned by the state.
The goods and services that a country produces are not planned by anyone
Production is determined by the interaction of supply and demand and signaled to producers
through the price system
If demand for a product exceeds supply, prices will rise, signaling producers to produce more
If supply exceeds demand, prices will fall, signaling producers to produce less
Consumers are sovereign
The purchasing patterns of consumers, as signaled to producers through the mechanism of
the price system, determine what is produced and in what quantity.
Command Economy - (ANSWERS)the government plans the goods and services that a country
produces, the quantity in which they are produced, and the prices at which they are sold
Consistent with the collectivist ideology, the objective of a command economy is for
government to allocate resources for "the good of society."
, MGCR 382 FINAL EXAM REVIEW/ACTUAL EXAM QUESTIONS
WITH ALL PASSED SOLUTIONS/NEWEST UPDATE
!@#$%%%%%
All businesses are state owned, the rationale being that the government can then direct them
%%%%%%
to make investments that are in the best interests of the nation as a whole rather than in the
interests of private individuals
Mixed Economy - (ANSWERS)can be found between market and command economies
Certain sectors of the economy are left to private ownership and free market mechanisms,
whereas other sectors have significant state ownership and government planning
Governments also tend to take into state ownership troubled firms whose continued operation
is thought to be vital to national interests
In some mixed economies, such as China, the state uses its control of state-owned enterprises
to further its industrial policy, promoting the development of public and private sectors it
believes to be important for the future economic development of the nation
Legal Systems - (ANSWERS)refers to the rules, or laws, that regulate behavior along with the
processes by which the laws are enforced and through which redress for grievances is obtained
Of immense importance to international business. A country's laws regulate business practice,
define the manner in which business transactions are to be executed, and set down the rights
and obligations of those involved in business transactions
Influenced by the prevailing political system (although it is also strongly influenced by
historical tradition)
Common Law - (ANSWERS)system evolved in England over hundreds of years
Now found in most of Great Britain's former colonies, including the United States.
Based on tradition, precedent, and custom
Tradition - (ANSWERS)refers to a country's legal history, precedent to cases that have come
before the courts in the past, and custom to the ways in which laws are applied in specific
situations
Civil Law - (ANSWERS)based on a detailed set of laws organized into codes
Tends to be less adversarial than a common law system because the judges rely on detailed
legal codes rather than interpreting tradition, precedent, and custom
Theocratic Law - (ANSWERS)one in which the law is based on religious teachings. Islamic law
is the most widely practiced theocratic legal system in the modern world, although usage of
both Hindu and Jewish law persisted into the twentieth century
Contract - (ANSWERS)a document that specifies the conditions under which an exchange is to
occur and details the rights and obligations of the parties involved
Some form of contract regulates many business transactions
Contract Law - (ANSWERS)the body of law that governs contract enforcement
WITH ALL PASSED SOLUTIONS/NEWEST UPDATE
Political Economy - (ANSWERS)term that stresses the political, economic and!@#$%%%%%
legal systems of
a country are interdependent %%%%%%
- they interact with and influence each other
- they affect the level of economic well-being
Political System - (ANSWERS)the system of government in a nation
Can be assessed according to 2 dimensions
1. The degree to which they emphasize collectivism as opposed to individualism
2. The degree to which they are democratic or totalitarian
Dimensions are interrelated
Systems that emphasize collectivism tend to lean toward totalitarianism
Those that place a high value on individualism tend to be democratic
Large gray area exists in the middle - it is possible to have democratic societies that emphasize
a mix of collectivism and individualism
Also, possible to have totalitarian societies that are not collectivist
Collectivism - (ANSWERS)refers to a political system that stresses the primacy of collective
goals over individual goals
When emphasized, the needs of society as a whole are generally viewed as being more
important than individual freedoms
Plato's argument for collectivism
Argued that individual rights should be sacrificed for the good of the majority and that property
should be owned in common
Socialism - (ANSWERS)roots in Karl Marx who argued that the few benefit at the expense of the
many in a capitalist society where individuals freedoms are not restricted
Postulated that the wages earned by the majority of workers in a capitalist society would be
forced down to subsistence levels
Argued that capitalists expropriate for their own use the value created by workers, while paying
workers only subsistence wages in return
The pay of workers does not reflect the full value of their labour
- Socialists believe that sharing ownership of the means of production equally among society
would increase people's quality of life
- advocates that the means of production, distribution, and exchange should be owned or
regulated by the community as a whole
Communists - (ANSWERS)believed that socialism could be achieved only through violent
revolution and totalitarian dictatorship
Social Democrats - (ANSWERS)committed themselves to achieving socialism by democratic
means, turning their backs on violent revolution and dictatorship
,MGCR 382 FINAL EXAM REVIEW/ACTUAL EXAM QUESTIONS
WITH ALL PASSED SOLUTIONS/NEWEST UPDATE
!@#$%%%%%
Social Democracy - (ANSWERS)had the greatest influence in a number of democratic western
%%%%%%
nation ex. Australia, Denmark, Finland, Germany, Great Britain etc. Where social democratic
parties have often held political power
Privatization - (ANSWERS)selling of state-owned enterprises to private investors
Individualism - (ANSWERS)the opposite of collectivism
Refers to a philosophy that an individual should have freedom in their economic and political
pursuits
Stresses that the interests of the individual should take precedence over the interests of the
state
Individual economic and political freedoms are the ground rules on which a society should be
based
Can be traced to an ancient Greek philosopher, Aristotle
Aristotle on Individualism - (ANSWERS)argued that individual diversity and private ownership
are desirable
Argued that private property is more highly productive than communal property and will
stimulate progress
Individualism is built on 2 central tenets
Emphasis on the importance of guaranteeing individual freedom and self-expression
The welfare of society is best served by letting people pursue their own economic self-interest,
as opposed to some collective body ex. Government dictating what is in society's best interest
Democracy - (ANSWERS)refers to a political system in which government is by the people,
exercised either directly or through elected representatives
Totalitarianism
A form of government in which one person or political party exercises absolute control over all
spheres of human life and prohibits opposing political parties
** democracy and individualism go hand in hand, as do the communist version of collectivism
and totalitarianism
Representative Democracy - (ANSWERS)ex. The U.S is a constitutional republic
Citizens periodically elect individuals to represent them
Elected representatives then form a government whose function is to make decisions on behalf
of the electorate
To guarantee the elected representatives can be held accountable for their actions by the
electorate, an ideal representative democracy has a number of safeguards that are typically
enshrined in constitutional law... - (ANSWERS)· an individual's right to freedom of expression,
opinion, and organization
· a free media
,MGCR 382 FINAL EXAM REVIEW/ACTUAL EXAM QUESTIONS
WITH ALL PASSED SOLUTIONS/NEWEST UPDATE
· regular elections in which all eligible citizens are allowed to vote !@#$%%%%%
· universal adult suffrage %%%%%%
· limited terms for elected representatives
· a fair court system that is independent from the political system
· a nonpolitical state bureaucracy
· a nonpolitical police force and armed ser- vice
· relatively free access to state information
**all constitutional guarantees are denied to the citizens in totalitarian countries
Totalitarianism - (ANSWERS)a form of government that attempts to assert total control over the
lives of its citizens
4 major forms of Totalitarianism - (ANSWERS)· Communist the most widespread until recently
· Theocratic found in states where political power is monopolized by a party, group, or individual
that governs according to religious principles
· Tribal arisen from time to time in African countries ex. Zimbabwe, occurs when a political party
that represents the interests of a particular tribe monopolizes power
· Right-wing generally permits some individual economic freedom but restricts individual
political freedom, frequently on the grounds that it would lead to the rise of communism
Pseudo-Democracies - (ANSWERS)world nations that lie between pure democracies and
complete totalitarian system of government
Where authoritarian elements have captured some or much of the machinery of state and use
this in an attempt to deny basic political and civil liberties
Market Economy - (ANSWERS)all productive activities are privately owned, as opposed to being
owned by the state.
The goods and services that a country produces are not planned by anyone
Production is determined by the interaction of supply and demand and signaled to producers
through the price system
If demand for a product exceeds supply, prices will rise, signaling producers to produce more
If supply exceeds demand, prices will fall, signaling producers to produce less
Consumers are sovereign
The purchasing patterns of consumers, as signaled to producers through the mechanism of
the price system, determine what is produced and in what quantity.
Command Economy - (ANSWERS)the government plans the goods and services that a country
produces, the quantity in which they are produced, and the prices at which they are sold
Consistent with the collectivist ideology, the objective of a command economy is for
government to allocate resources for "the good of society."
, MGCR 382 FINAL EXAM REVIEW/ACTUAL EXAM QUESTIONS
WITH ALL PASSED SOLUTIONS/NEWEST UPDATE
!@#$%%%%%
All businesses are state owned, the rationale being that the government can then direct them
%%%%%%
to make investments that are in the best interests of the nation as a whole rather than in the
interests of private individuals
Mixed Economy - (ANSWERS)can be found between market and command economies
Certain sectors of the economy are left to private ownership and free market mechanisms,
whereas other sectors have significant state ownership and government planning
Governments also tend to take into state ownership troubled firms whose continued operation
is thought to be vital to national interests
In some mixed economies, such as China, the state uses its control of state-owned enterprises
to further its industrial policy, promoting the development of public and private sectors it
believes to be important for the future economic development of the nation
Legal Systems - (ANSWERS)refers to the rules, or laws, that regulate behavior along with the
processes by which the laws are enforced and through which redress for grievances is obtained
Of immense importance to international business. A country's laws regulate business practice,
define the manner in which business transactions are to be executed, and set down the rights
and obligations of those involved in business transactions
Influenced by the prevailing political system (although it is also strongly influenced by
historical tradition)
Common Law - (ANSWERS)system evolved in England over hundreds of years
Now found in most of Great Britain's former colonies, including the United States.
Based on tradition, precedent, and custom
Tradition - (ANSWERS)refers to a country's legal history, precedent to cases that have come
before the courts in the past, and custom to the ways in which laws are applied in specific
situations
Civil Law - (ANSWERS)based on a detailed set of laws organized into codes
Tends to be less adversarial than a common law system because the judges rely on detailed
legal codes rather than interpreting tradition, precedent, and custom
Theocratic Law - (ANSWERS)one in which the law is based on religious teachings. Islamic law
is the most widely practiced theocratic legal system in the modern world, although usage of
both Hindu and Jewish law persisted into the twentieth century
Contract - (ANSWERS)a document that specifies the conditions under which an exchange is to
occur and details the rights and obligations of the parties involved
Some form of contract regulates many business transactions
Contract Law - (ANSWERS)the body of law that governs contract enforcement
