Question 1

The purchasing power parity for different countries is adjusted (up or down) depending upon whether a country's cost of living is lower or higher than the cost of living in the United States.

Accepted Answer

To account for differences in the cost of living, one can adjust GNI per capita by purchasing power. The base for the adjustment is the cost of living in the United States. The PPP for different countries is then adjusted (up or down) depending upon whether the cost of living is lower or higher than in the United States.

Question 2

Many totalitarian regimes failed to deliver economic progress to the vast bulk of their populations.

Accepted Answer

Many totalitarian regimes failed to deliver economic progress to the vast bulk of their populations.

Question 3

Economists who argue that innovation and entrepreneurial activity are the engines of long-run economic growth, define innovation broadly to include not just new products but also new processes, new organizations, new management practices, and new strategies.

Accepted Answer

There is substantial agreement among economists that innovation and entrepreneurial activity are the engines of long-run economic growth. Those who make this argument define innovation broadly to include not just new products but also new processes, new organizations, new management practices, and new strategies.

Question 4

During the late 1980s and early 1990s, totalitarian governments collapsed and were replaced by democratically elected governments.

Accepted Answer

During the late 1980s and early 1990s, a wave of democratic revolutions swept the world. Totalitarian governments collapsed and were replaced by democratically elected governments that were typically more committed to free market capitalism than their predecessors had been.

Question 5

In Amartya Sen's view, development is solely an economic process, and not a political process.

Accepted Answer

In Amartya Sen's view, development is not just an economic process, but it is a political one too, and to succeed requires the "democratization" of political communities to give citizens a voice in the important decisions made for the community.

Question 6

In Samuel Huntington's thesis, global terrorism is a product of the tension between civilizations and the clash of value systems and ideology.

Accepted Answer

In Huntington's thesis, global terrorism is a product of the tension between civilizations and the clash of value systems and ideology.

Question 7

The Peruvian development economist Hernando de Soto has argued that much of the developing world will fail to reap the benefits of capitalism until they relax the property rights offered by their legal systems.

Accepted Answer

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 property rights are better defined and protected.

Question 8

Although countries such as China and India are currently relatively poor, their economies are already large in absolute terms and growing more rapidly than those of many advanced nations.

Accepted Answer

Although countries such as China and India are currently relatively poor, their economies are already large in absolute terms and growing more rapidly than those of many advanced nations.

Question 9

Strong legal protection of property rights is a requirement for a business environment to be conducive to innovation, entrepreneurial activity, and hence economic growth.

Accepted Answer

Without strong property rights protection, businesses and individuals run the risk that the profits from their innovative efforts will be expropriated, either by criminal elements or by the state.

Question 10

A strong belief that economic progress leads to adoption of a totalitarian regime underlies the fairly permissive attitude that many Western governments have adopted toward human rights violations in China.

Accepted Answer

A strong belief that economic progress leads to adoption of a democratic regime underlies the fairly permissive attitude that many Western governments have adopted toward human rights violations in China.

Question 11

If a country's economy is to sustain long-run economic growth, the business environment must be conducive to the consistent production of product and process innovations and to entrepreneurial activity.

Accepted Answer

If a country's economy is to sustain long-run economic growth, the business environment must be conducive to the consistent production of product and process innovations and to entrepreneurial activity.

Question 12

Entrepreneurial individuals have fewer economic incentives to develop valuable new innovations in market economies than in planned economies.

Accepted Answer

It has been argued that the economic freedom associated with a market economy creates greater incentives for innovation and entrepreneurship than either a planned or a mixed economy.

Question 13

Five of the fastest growing economies of the past 30 years-China, South Korea, Taiwan, Singapore, and Hong Kong-had one thing in common at the start of their economic growth: democratic governments.

Accepted Answer

Five of the fastest growing economies of the past 30 years-China, South Korea, Taiwan, Singapore, and Hong Kong-had one thing in common at the start of their economic growth: undemocratic governments.

Question 14

According to the influential economist Jeffrey Sachs, tropical regions have a more extensive division of labor than temperate regions.

Accepted Answer

The influential economist Jeffrey Sachs argues that temperate climes have generally supported higher densities of population and thus a more extensive division of labor than tropical regions.

Question 15

According to Freedom House, all democracies are free countries in terms of political and civil liberties.

Accepted Answer

Not all democracies are free, according to Freedom House, because some democracies still restrict certain political and civil liberties. For example, Russia was rated "not free."

Question 16

New information and communication technologies have increased a state's ability to control access to uncensored information.

Accepted Answer

New information and communication technologies, including satellite television, fax machines, desktop publishing, and, most important, the Internet, have reduced a state's ability to control access to uncensored information.

Question 17

Author Francis Fukuyama envisioned a world split into different civilizations, each of which has its own value systems and ideology.

Accepted Answer

The late influential political scientist Samuel Huntington envisioned a world split into different civilizations, each of which has its own value systems and ideology. Fukuyama has said that the war of ideas may be at an end and that liberal democracy has triumphed.

Question 18

The gross national income (GNI) per capita comes much closer to Amartya Sen's conception of how development should be measured than narrow economic measures such as Human Development Index (HDI).

Accepted Answer

The HDI comes much closer to Sen's conception of how development should be measured than narrow economic measures such as GNI per capita.

Question 19

Totalitarian states, by limiting human freedom, are highly conducive to progress in terms of innovation, entrepreneurship, and economic growth.

Accepted Answer

Totalitarian states, by limiting human freedom, also suppress human development and therefore are detrimental to progress.

Question 20

The late Influential political scientist Samuel Huntington predicted that the universalization of Western liberal democracy will be the final form of human government.

Accepted Answer

The late influential political scientist Samuel Huntington argued there is no "universal" civilization based on widespread acceptance of Western liberal democratic ideals.

Quiz 3: National Differences in Economic Development

The purchasing power parity for different countries is adjusted (up or down) depending upon whether a country's cost of living is lower or higher than the cost of living in the United States.

Many totalitarian regimes failed to deliver economic progress to the vast bulk of their populations.

Economists who argue that innovation and entrepreneurial activity are the engines of long-run economic growth, define innovation broadly to include not just new products but also new processes, new organizations, new management practices, and new strategies.

During the late 1980s and early 1990s, totalitarian governments collapsed and were replaced by democratically elected governments.

In Amartya Sen's view, development is solely an economic process, and not a political process.

In Samuel Huntington's thesis, global terrorism is a product of the tension between civilizations and the clash of value systems and ideology.

The Peruvian development economist Hernando de Soto has argued that much of the developing world will fail to reap the benefits of capitalism until they relax the property rights offered by their legal systems.

Although countries such as China and India are currently relatively poor, their economies are already large in absolute terms and growing more rapidly than those of many advanced nations.

Strong legal protection of property rights is a requirement for a business environment to be conducive to innovation, entrepreneurial activity, and hence economic growth.

A strong belief that economic progress leads to adoption of a totalitarian regime underlies the fairly permissive attitude that many Western governments have adopted toward human rights violations in China.

If a country's economy is to sustain long-run economic growth, the business environment must be conducive to the consistent production of product and process innovations and to entrepreneurial activity.

Entrepreneurial individuals have fewer economic incentives to develop valuable new innovations in market economies than in planned economies.

Five of the fastest growing economies of the past 30 years-China, South Korea, Taiwan, Singapore, and Hong Kong-had one thing in common at the start of their economic growth: democratic governments.

According to the influential economist Jeffrey Sachs, tropical regions have a more extensive division of labor than temperate regions.

According to Freedom House, all democracies are free countries in terms of political and civil liberties.

New information and communication technologies have increased a state's ability to control access to uncensored information.

Author Francis Fukuyama envisioned a world split into different civilizations, each of which has its own value systems and ideology.

The gross national income (GNI) per capita comes much closer to Amartya Sen's conception of how development should be measured than narrow economic measures such as Human Development Index (HDI).

Totalitarian states, by limiting human freedom, are highly conducive to progress in terms of innovation, entrepreneurship, and economic growth.

The late Influential political scientist Samuel Huntington predicted that the universalization of Western liberal democracy will be the final form of human government.