HTM 2314 Chapter 3 Exam Questions
and Answers All Correct
What two factors are the engines of growth? - Answer-Innovation and entrepreneurship
Innovation broadly includes - Answer-New products, new processes, new organizations,
new management practices, and new strategies
Entrepreneurs - Answer-The first to commercialize innovative new products and
processes
Innovation and entrepreneurial activity help increase economic activity by - Answer-
Creating new products and markets that did not previously exist
Innovations in production and business processes lead to - Answer-An increase in the
productivity of labor and capital, which further boosts economic growth rates
If a country's economy is to sustain long-run economic growth, the business
environment must - Answer-Be conducive to the consistent production of product and
process innovations and to entrepreneurial activity
Economic freedom associated with a market economy creates - Answer-Greater
incentives for innovation and entrepreneurship than either a planned or mixed economy
In a planned economy the _______ own _________ - Answer-State, all means of
production
In planned economies, entrepreneurial individuals have few economic incentives to
develop new innovations - Answer-True
Innovation and entrepreneurship require - Answer-- A market economy
- Strong property rights
Without strong property rights protection - Answer-Businesses and individuals run the
risk that the profits from their innovative efforts will be expropriated
States can expropriate profits from innovation through - Answer-Legal means like
excessive taxation or illegal means
, Inadequately enforced property rights reduce - Answer-The incentives for innovation
and entrepreneurial activity
Top 5 fastest growing economies of the past 40 years with undemocratic governments -
Answer-- China
- South Korea
- Taiwan
- Singapore
- Hong Kong
Only a totalitarian regime that is committed to _____________ is capable of promoting
economic growth - Answer-A market system and strong protection of property rights
Economic progress begets - Answer-Democracy
Democracy is often a consequence of - Answer-Economic growth
Adam Smith - Answer-Believed that geography can influence economic policy and
hence economic growth rates
________ is another important determinant of economic development - Answer-
Education
3 trends of the political economy - Answer-1. 80s-90s, a wave of democratic revolutions
swept the world
2. 80s-90s, there has been a move away from centrally planned and mixed economies
to a more free market model
3. Since 2005, there has been a shift back toward greater authoritarianism in some
nation
Common measure of economic development - Answer-A country's gross national
income per head of population
The world has a general movement toward - Answer-- Democratic forms of govt
- Market based economic reforms
- Adoption of legal systems that better enforce property rights
A country's GNI is regarded as - Answer-A yardstick for the economic activity of a
country; it measures the total annual income received by residents of a nation
GNI per person figures can be misleading because - Answer-They don't consider
differences in the cost of living
Purchasing power parity adjustment - Answer-Allows one to adjust GNI per capita to
account for differences in the cost of living. Creates a more direct comparison on living
standards in different countries
and Answers All Correct
What two factors are the engines of growth? - Answer-Innovation and entrepreneurship
Innovation broadly includes - Answer-New products, new processes, new organizations,
new management practices, and new strategies
Entrepreneurs - Answer-The first to commercialize innovative new products and
processes
Innovation and entrepreneurial activity help increase economic activity by - Answer-
Creating new products and markets that did not previously exist
Innovations in production and business processes lead to - Answer-An increase in the
productivity of labor and capital, which further boosts economic growth rates
If a country's economy is to sustain long-run economic growth, the business
environment must - Answer-Be conducive to the consistent production of product and
process innovations and to entrepreneurial activity
Economic freedom associated with a market economy creates - Answer-Greater
incentives for innovation and entrepreneurship than either a planned or mixed economy
In a planned economy the _______ own _________ - Answer-State, all means of
production
In planned economies, entrepreneurial individuals have few economic incentives to
develop new innovations - Answer-True
Innovation and entrepreneurship require - Answer-- A market economy
- Strong property rights
Without strong property rights protection - Answer-Businesses and individuals run the
risk that the profits from their innovative efforts will be expropriated
States can expropriate profits from innovation through - Answer-Legal means like
excessive taxation or illegal means
, Inadequately enforced property rights reduce - Answer-The incentives for innovation
and entrepreneurial activity
Top 5 fastest growing economies of the past 40 years with undemocratic governments -
Answer-- China
- South Korea
- Taiwan
- Singapore
- Hong Kong
Only a totalitarian regime that is committed to _____________ is capable of promoting
economic growth - Answer-A market system and strong protection of property rights
Economic progress begets - Answer-Democracy
Democracy is often a consequence of - Answer-Economic growth
Adam Smith - Answer-Believed that geography can influence economic policy and
hence economic growth rates
________ is another important determinant of economic development - Answer-
Education
3 trends of the political economy - Answer-1. 80s-90s, a wave of democratic revolutions
swept the world
2. 80s-90s, there has been a move away from centrally planned and mixed economies
to a more free market model
3. Since 2005, there has been a shift back toward greater authoritarianism in some
nation
Common measure of economic development - Answer-A country's gross national
income per head of population
The world has a general movement toward - Answer-- Democratic forms of govt
- Market based economic reforms
- Adoption of legal systems that better enforce property rights
A country's GNI is regarded as - Answer-A yardstick for the economic activity of a
country; it measures the total annual income received by residents of a nation
GNI per person figures can be misleading because - Answer-They don't consider
differences in the cost of living
Purchasing power parity adjustment - Answer-Allows one to adjust GNI per capita to
account for differences in the cost of living. Creates a more direct comparison on living
standards in different countries
