Test 1- chapter 2

Question 0

Rostow modernization model

Answer 0

• Each stage is a function of productivity, economic exchange, technological improvements and income
• Growth requires advancing from one stage to the next
• Traditional Society,->Transitional Society->Take Off-> Drive to maturity-> High mass consumption

Question 1

Economic development disparity

Answer 1

• Firms from industrialized countries dominate the world economy, allocating resources based on market potential, rather than based on local needs
• Developing countries maintain control over own resources (raw materials, Labor) and access to local consumers

Question 2

National difference in political economy

Answer 2

Different systems:
-Market economy- What is produced in what quantity is determined by supply/demand and signaled to producers through a price system

• Command Economy- planned by government
• Mixed Economy- A balance of both of the above

Question 3

Nature of economic transformation

Answer 3

-Deregulation: legal changes (allows private enterprise)
-Privatization: transfer of state property/ industries to private individuals
-Evolution of legal systems
The road to transformation is rocky

Question 4

Lvls of dev.- Developed Countries (GNP per capita of US $9,266 and above)

Answer 4

Well developed industrial and service sectors, Markets in maturity stage, Consumers with established preferences, Intense competition

Question 5

Lvls of dev.- Emerging countries (GNP per capita of US $ 766-9,265)

Answer 5

Developing rapidly, Great potential

Question 6

Lvls of dev.- Developing Countries (GNP per capita of less than US $755)

Answer 6

Primarily agrarian
Located in different regions in Asia and Sub Sahran Africa
Often neglected of under served by large multinationals
Represent potential niche markets

Question 7

Economic development indexes

Answer 7

• GNP Per capita; does not factor cost of living differences
• Static picture: focus on growth rates
• Purchasing power parity index:
• Human development index: life expectancy, literacy, opportunities that people enjoy

Question 8

Characteristics of emerging markets

Answer 8

• Sound Currency, low inflation
• Pro business, fiscally conservative, transparent government policies
• Guarantees for the repatriation of dividend and capital
• Sound corporate law
• Liquid securities market reflecting fair prices
• Work ethics and a culture

Question 9

Examples of Emerging Markets

Answer 9

• Asia- china, india,
• Africa and Middle East- South Africa and israel
• Former Soviet Union- Russia, ukraine
• Latin America- Argentina, Brazil
• East Europe- Czech Rep

Question 10

Political Risk and Minimizing Political risk

Answer 10

• Poor economic performance
• Repression of ethnic groups and/or general repression of the elite
• Internal diversity and incongruent interests
• radically changing government structures
• Fierce nationalist sentiment

Question 11

Types of intellectual property- Patent

Answer 11

Protection of the rights of the inventor or of the firm to use and sell the invention for a specified period of time

Question 12

Int Property types- Copyright

Answer 12

Rights of owner of original work of art to reproduce, sell, perform or film the work

Question 13

Types of Int Protection- Trademark

Answer 13

Brand name, mark, symbol, motto, or slogan that identifies a brand and distinguishes it from competitors/ brands

Question 14

Types of int protection- Trade secret

Answer 14

Know how, formulas, and special blends that are not registered and are thus not protected by law

Question 15

Minimizing Politcal risks

Answer 15

• Understand both rulling and opposition parties
• Be exemplary coroporate citizens
• Sell a quality product or service that is essential for local development
• Partner with local companies and create local expertise
• Use local suppliers
• Obtain insurance coverage against expropriation, nationalization, confiscation, and terrorism