MGCR 382 Final Exam UPDATED ACTUAL
QUESTIONS AND CORRECT ANSWERS
Political System - CORRECT ANSWER Collectivism vs Individualism
Democratic vs Totalitarianism
Collectivism - CORRECT ANSWER Collective goals over individual goals
- Does not believe individual rights is for "the good of society" or "common good"
- Society should be stratified into classes
- YES by the soviet union in the cold war
Capitalist Society - CORRECT ANSWER Benefit from workers but does not pay
workers what they are worth
Socialism - CORRECT ANSWER Everything is state owned so they can focus on
community rather than individual profit
- If it's public they have to treat workers well and ensure they are well compensated
Communism - CORRECT ANSWER Socialism can be achieved through violent
revolution and totalitarian dictatorship
Social democrats - CORRECT ANSWER Socialism can be achieved by democratic
means, not violence and dictatorship
Privatization - CORRECT ANSWER Parties sold state-owned enterprises to private
investors
- State ownership was not wanted because companies would perform poorly (paid higher
prices and taxes)
Individualism - CORRECT ANSWER - Guarantee freedom and self-expression
- Letting people pursue their own economic self-interest
- Individual diversity and private ownership are desirable
- Private property is more productive than communal it has more care (think about
bathrooms)
- YES by the US in the cold war
Democracy - CORRECT ANSWER Government is by the people either directly or
through elected representatives
- Representative democracy: Citizens periodically elect representatives
,Totalitarianism - CORRECT ANSWER One person or political party has total control
(freedom of expression, free media, regular election are denied)
1. Communist totalitarianism: Socialism (China, North Korea)
2. Theocratic totalitarianism: Monopolized by a party, group, or individual that governs
according to religious principles (Islam in Iran and Saudi Arabia: limits people from religious
expression
3. Tribal totalitarianism: Political party represents a particular tribe not a majority tribe
monopolizes power (Africa)
4. Right-wing totalitarianism: Some individual economic freedom but restricts individual
political freedom (fear of communism - backed by Military, Asia)
Pseudo Democracies - CORRECT ANSWER Nations are in between pure democracies
or complete totalitarianism systems
- People with authority deny basic political and civil liberties
(Putin is elected but he puts restrictions on opposing campaigns)
Economic Systems - CORRECT ANSWER - Market Economy
- Command Economy
- Mixed Economy
Market Economy - CORRECT ANSWER Activities are privately owned
- Production is determined by supply and demand (product exceeds supply, price will rise,
supply exceeds demand, price falls)
- Single firm cannot monopolize a market - monopolist is inefficient, high priced and low
quality
- Government should encourage fair and free competition between private producers
Command Economy - CORRECT ANSWER Government controls everything (they
can direct to make investments in the interest of the nation than individuals)
- State-owned enterprise have little incentive to control cost, innovate and be efficient since
they don't go out of business
- Found in communist countries with collectivism
Mixed Economy - CORRECT ANSWER Mix between market and command
economies
- Government will help troubled state owned first from collapsing if they are important to
national interests (will further industries - China being a major provider for information
technology by making loans below-market interest rates)
- Pro market-based argue that politicians cannot make good decisions on industrial
investments
Legal Systems - CORRECT ANSWER - Common Law
,- Civil Law
- Theocratic Law
Common Law - CORRECT ANSWER Based on tradition (legal history), precedent
(cases from courts in the past), custom (ways laws are applied)
- Most amount of flexibility (up to the judges)
- Power to interpret law
- Very detailed so it is more expensive
Civil law - CORRECT ANSWER Based on details of laws organized into codes
- Less conflict because it is on legal codes not interpretation
- Power to apply law
- Contract law is less specific and shorter since a lot of it was already covered
Theocratic Law - CORRECT ANSWER Based on religious teachings (Islamic Law)
United Nations Convention on Contracts for the International Sale of Goods - CORRECT
ANSWER Establishes set of rules for everyday selling and purchasing
Foreign Corrupt Practices Act - CORRECT ANSWER Illegal to bribe a foreign
government
- Corruption can be in form of demanding bribes, levying excessive taxation
- Facilitates or expedites payments (grease payments or speed money: payment made to an
official to expedite/secure performance)
Culture - CORRECT ANSWER System of values and norms shared among a group of
people
Values - CORRECT ANSWER Ideas about what a group believes to be good, right and
desirable
Norms - CORRECT ANSWER Social rules and guidelines that make appropriate
behaviours appropriate
Folkways - CORRECT ANSWER Routine conventions of everyday life - actions of
moral significance (dress code, social manners, the right utensils, shaking someone's hand)
- Rituals and symbols
- Perceptions of time (important in x country but not as much in another)
Mores - CORRECT ANSWER Norms widely observed (US drinking age everybody
cares while nobody does in Saudi Arabia)
- Greater moral significance than folkways
, - Often enacted to law
Social Structure - CORRECT ANSWER How a company organizes values, norms, and
relationships
1. Degree to which the basic unit of a social organization is the individual
2. Degree to which a society is stratified into classes or castes
Social Strata - CORRECT ANSWER Socioeconomic characteristics such as family
background, occupation, and income
1. Trait of society not reflection of individual differences
2. Carries over a generation to the next
3. Generally universal but variable
4. Involves not just inequality but also beliefs
Social Mobility - CORRECT ANSWER Extent which they can move out of the strata
they are born in
Caste system: Most rigid, social position is determined by what you are born in
Class system: Less rigid and possible to change
Class consciousness - CORRECT ANSWER How you perceive yourself in terms of
class background and how it shapes your relationships with others
Ethical Systems - CORRECT ANSWER Set of moral principles or values used to
guide and shape behaviour
- Christianity
- Islam
- Hinduism
- Buddhism
Economic Implications of Islam - CORRECT ANSWER - Property holders are trustees
not owners
- Fine to earn a profit but can't exploit others
Islamic Banks have two ways to make money - CORRECT ANSWER - Mudarabah:
Rather than charging interest, banks take a share in the profits that are derived from an
investment
- Murabaha: Firm agrees for a bank to purchase what they need and then sell it with a markup
Hinduism - CORRECT ANSWER Believes in reincarnation, karma, nirvana and
supports the caste system
- Judged not by material achievements but by spiritual ones
- Less likely to engage in entrepreneurial activity than Christians
QUESTIONS AND CORRECT ANSWERS
Political System - CORRECT ANSWER Collectivism vs Individualism
Democratic vs Totalitarianism
Collectivism - CORRECT ANSWER Collective goals over individual goals
- Does not believe individual rights is for "the good of society" or "common good"
- Society should be stratified into classes
- YES by the soviet union in the cold war
Capitalist Society - CORRECT ANSWER Benefit from workers but does not pay
workers what they are worth
Socialism - CORRECT ANSWER Everything is state owned so they can focus on
community rather than individual profit
- If it's public they have to treat workers well and ensure they are well compensated
Communism - CORRECT ANSWER Socialism can be achieved through violent
revolution and totalitarian dictatorship
Social democrats - CORRECT ANSWER Socialism can be achieved by democratic
means, not violence and dictatorship
Privatization - CORRECT ANSWER Parties sold state-owned enterprises to private
investors
- State ownership was not wanted because companies would perform poorly (paid higher
prices and taxes)
Individualism - CORRECT ANSWER - Guarantee freedom and self-expression
- Letting people pursue their own economic self-interest
- Individual diversity and private ownership are desirable
- Private property is more productive than communal it has more care (think about
bathrooms)
- YES by the US in the cold war
Democracy - CORRECT ANSWER Government is by the people either directly or
through elected representatives
- Representative democracy: Citizens periodically elect representatives
,Totalitarianism - CORRECT ANSWER One person or political party has total control
(freedom of expression, free media, regular election are denied)
1. Communist totalitarianism: Socialism (China, North Korea)
2. Theocratic totalitarianism: Monopolized by a party, group, or individual that governs
according to religious principles (Islam in Iran and Saudi Arabia: limits people from religious
expression
3. Tribal totalitarianism: Political party represents a particular tribe not a majority tribe
monopolizes power (Africa)
4. Right-wing totalitarianism: Some individual economic freedom but restricts individual
political freedom (fear of communism - backed by Military, Asia)
Pseudo Democracies - CORRECT ANSWER Nations are in between pure democracies
or complete totalitarianism systems
- People with authority deny basic political and civil liberties
(Putin is elected but he puts restrictions on opposing campaigns)
Economic Systems - CORRECT ANSWER - Market Economy
- Command Economy
- Mixed Economy
Market Economy - CORRECT ANSWER Activities are privately owned
- Production is determined by supply and demand (product exceeds supply, price will rise,
supply exceeds demand, price falls)
- Single firm cannot monopolize a market - monopolist is inefficient, high priced and low
quality
- Government should encourage fair and free competition between private producers
Command Economy - CORRECT ANSWER Government controls everything (they
can direct to make investments in the interest of the nation than individuals)
- State-owned enterprise have little incentive to control cost, innovate and be efficient since
they don't go out of business
- Found in communist countries with collectivism
Mixed Economy - CORRECT ANSWER Mix between market and command
economies
- Government will help troubled state owned first from collapsing if they are important to
national interests (will further industries - China being a major provider for information
technology by making loans below-market interest rates)
- Pro market-based argue that politicians cannot make good decisions on industrial
investments
Legal Systems - CORRECT ANSWER - Common Law
,- Civil Law
- Theocratic Law
Common Law - CORRECT ANSWER Based on tradition (legal history), precedent
(cases from courts in the past), custom (ways laws are applied)
- Most amount of flexibility (up to the judges)
- Power to interpret law
- Very detailed so it is more expensive
Civil law - CORRECT ANSWER Based on details of laws organized into codes
- Less conflict because it is on legal codes not interpretation
- Power to apply law
- Contract law is less specific and shorter since a lot of it was already covered
Theocratic Law - CORRECT ANSWER Based on religious teachings (Islamic Law)
United Nations Convention on Contracts for the International Sale of Goods - CORRECT
ANSWER Establishes set of rules for everyday selling and purchasing
Foreign Corrupt Practices Act - CORRECT ANSWER Illegal to bribe a foreign
government
- Corruption can be in form of demanding bribes, levying excessive taxation
- Facilitates or expedites payments (grease payments or speed money: payment made to an
official to expedite/secure performance)
Culture - CORRECT ANSWER System of values and norms shared among a group of
people
Values - CORRECT ANSWER Ideas about what a group believes to be good, right and
desirable
Norms - CORRECT ANSWER Social rules and guidelines that make appropriate
behaviours appropriate
Folkways - CORRECT ANSWER Routine conventions of everyday life - actions of
moral significance (dress code, social manners, the right utensils, shaking someone's hand)
- Rituals and symbols
- Perceptions of time (important in x country but not as much in another)
Mores - CORRECT ANSWER Norms widely observed (US drinking age everybody
cares while nobody does in Saudi Arabia)
- Greater moral significance than folkways
, - Often enacted to law
Social Structure - CORRECT ANSWER How a company organizes values, norms, and
relationships
1. Degree to which the basic unit of a social organization is the individual
2. Degree to which a society is stratified into classes or castes
Social Strata - CORRECT ANSWER Socioeconomic characteristics such as family
background, occupation, and income
1. Trait of society not reflection of individual differences
2. Carries over a generation to the next
3. Generally universal but variable
4. Involves not just inequality but also beliefs
Social Mobility - CORRECT ANSWER Extent which they can move out of the strata
they are born in
Caste system: Most rigid, social position is determined by what you are born in
Class system: Less rigid and possible to change
Class consciousness - CORRECT ANSWER How you perceive yourself in terms of
class background and how it shapes your relationships with others
Ethical Systems - CORRECT ANSWER Set of moral principles or values used to
guide and shape behaviour
- Christianity
- Islam
- Hinduism
- Buddhism
Economic Implications of Islam - CORRECT ANSWER - Property holders are trustees
not owners
- Fine to earn a profit but can't exploit others
Islamic Banks have two ways to make money - CORRECT ANSWER - Mudarabah:
Rather than charging interest, banks take a share in the profits that are derived from an
investment
- Murabaha: Firm agrees for a bank to purchase what they need and then sell it with a markup
Hinduism - CORRECT ANSWER Believes in reincarnation, karma, nirvana and
supports the caste system
- Judged not by material achievements but by spiritual ones
- Less likely to engage in entrepreneurial activity than Christians
