IBM CHAP 3B

Stagnation can occur in planned economies because

• entrepreneurial individuals have few economic incentives for innovation.

• private ownership of means of production leads to exploitation of workers.

• prices of goods and services are fixed by market forces.

• lack of barriers to trade results in increased competition for domestic producers.

________ is required for a business environment to be conducive to innovation and entrepreneurial activity.

• State ownership of means of production

• Strong legal protection of property rights

• Barriers to foreign trade and investment

• Government regulation of the market

The influential Peruvian development economist Hernando de Soto has argued that much of the developing world will fail to reap the benefits of capitalism until they

• have political stability.

• invest in infrastructural development.

• have better defined and secure property rights.

• have adequate market regulation.

According to Hernando de Soto, which of the following factors is essential for the developing world to be able to reap the benefits of innovation and entrepreneurship?

• detailed state planning

• restricting direct investment by foreign enterprises

• strong property rights

• market regulation

A free market economy in which property rights are protected leads to subsequent economic growth that often leads to the establishment of

• a democratic regime

• a planned economy

• government-owned enterprises

• a socialist economy

The political economy of many of the world's nation-states has changed radically since the late 1980s. Which of the following is a trend that has been evident?

• A wave of democratic revolutions has swept the world

• Totalitarian governments have arisen, replacing democratically elected governments

• There has been a strong move toward centrally planned economies

• Mixed economies are fast replacing market economies

Political scientist ________ predicts that there will be a world that is split into different civilizations, each of which has its own value systems and ideology.

• Samuel Huntington

• Amartya Sen

• Francis Fukuyama

• Hernando de Soto

Which of the following is one of the three main reasons for the spread of democracy?

• New information and communication technologies have broken down the ability of the state to control access to uncensored information

• Totalitarian regimes delivered economic progress to the bulk of their populations

• Democratic regimes failed to deliver economic progress to the vast bulk of their populations

• Economic advances in the past quarter-century have led to the emergence of a class of ruling elite

According to what political scientist's thesis is global terrorism a product of the tension between civilizations and the clash of value systems and ideology?

• Amartya Sen

• Samuel Huntington

• Francis Fukuyama

• Hernando de Soto

One of the reasons for the spread of democracy is the emergence of ________ who have pushed for democratic reforms.

• a more vocal working poor

• better educated lower classes

• a desperate urban poor

• increasingly prosperous middle and working classes