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FIB Test 2
Terms in this set (32)
______ measures the total annual income received by residents of a nation.
Gross National Income
If GNI adjusted for the cost of living in China is about $13,000, while GNI adjusted for the cost of living is about $56,000 in the United States, then......
Americans enjoy a higher standard of living
The standard of the living in the United States is _____ compared to China.
If gross national income per capita adjusted for the differences in the cost of living is about $13,000 in China, a developing country, and is about $56,000 in the United States, a developed country, then.....
on average, Americans can afford more goods and services than their Chinese counterparts
GNI figures are helpful in understanding an economy because they....
tell us how poor a country is relative to another
One common measure of economic development is a country's.....
Which of the following measures the total annual income received by residents of a country and is regarded as a yard stick for the economic activity of a country?
You can adjust GNI per capita by purchasing power to account for differences in the.....
cost of living
As a result of _____, large amounts of economic activity in India are unrecorded and the official GDP figures of the country fail to tell the entire story of the economy.
A black economy is most likely to be prevalent when.....
people engage in barter agreements to avoid paying taxes
Which of the following is broadly defined as the development of new products, processes, organizations, management practices, and strategies?
When the industry practice was to charge a fee for each DVD rented by the customer, Netflix pioneered the subscription method, a new way to rent DVDs that was cheaper. This is an example of:
Which of the following best exemplifies an entrepreneur?
Javier purchased an invention made by his friend to start a company that processes plastic bags into synthetic cloth
Which of the following creates an unfavorable environment for innovations and entrepreneurship?
state monopoly in production
Which of the following creates an environment that is conducive to product and process innovations and to entrepreneurial activity?
Due to strong legal protection of property rights, businesses and individuals will:
invest more in innovations
Economic advances in many countries have led to the:
emergence of increasingly prosperous middle and working classes
In the context of global economy, which of the following has been widely accepted since the late 1980s?
deregulation of economies
Which of the following movements started in Great Britain in the early 1980s when the prime minister Margaret Thatcher started to sell state-owned assets such as the Britain telephone company?
How does privatization help stimulate gains in economic efficiency?
It provides incentives to new private owners to search for increases in productivity and to enter new markets
The absence of a legal system that protects property rights and the lack of machinery to enforce that system in a market economy usually results in....
the lack of incentive to engage in economic activity
Which of the following of the Cold War era has vanished?
Although China and India are very large markets when measured by number of consumers, their _____ makes them a relatively small market when measured in economic terms.
limited purchasing power
In economic terms, the long-run monetary benefits of doing business in a country are most likely to be a function of the.....
present wealth (purchasing power) of consumers of the country
Both China and India have achieved high growth rates despite relatively weak property rights regimes and high levels of corruption, because of:
the shift toward a market-based economic system
Star Volans Inc. is planning on expanding its business globally. In terms of the costs involved in conducting business in a country, it will be most economical for the company if it chooses a country:
where politicians are held accountable by the electorate
The cost of doing business is most likely to be the lowest in:
open democratic societies
In the context of cost, which of the following can be considered as the most attractive market or investment site?
a country that has a well-developed body of business contract law
When social unrest and disorder in a country causes drastic changes in its business environment that adversely affect the profit and other goals of a business enterprise, the business enterprise is said to be facing a(n) _____ risk.
What type of risk can be defined as the likelihood that a trading partner will opportunistically break a contract or expropriate property rights?
MedPlus Incorporated, based in the United States, hesitates to enter into a joint venture with Azpak Limited, a Sri Lankan company, due to inadequate protection of intellectual property rights. MedPlus is trying to avoid what type of risk?
Generally, the costs and risks associated with doing business in a foreign country are typically lower in:
economically advanced countries
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