1. The purchasing power parity for different countries is adjusted (up or down) depending
upon whether the cost of living is lower or higher than in the United States.
2. 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.
3. In Amartya Sen’s view, development is solely an economic process, and not a political
process.
4. 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).
5. 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.
6. 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.
7. Entrepreneurial individuals have fewer economic incentives to develop valuable new
innovations in market economies than in planned economies.
8. Strong legal protection of property rights is a requirement for a business environment to
be conducive to innovation, entrepreneurial activity, and hence economic growth.
9. 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.
10. 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.
11. Totalitarian states that limit human freedom are highly conducive to progress in terms
of innovation, entrepreneurship, and economic growth.
12. 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.
13. According to the influential economist Jeffrey Sachs, tropical regions have a more
extensive division of labor than temperate regions.
14. During the late 1980s and early 1990s, totalitarian governments collapsed and were
replaced by democratically elected governments.
15. According to Freedom House, all democracies are free countries in terms of political and
civil liberties.
16. New information and communication technologies have increased a state’s ability to
control access to uncensored information.
17. Many totalitarian regimes failed to deliver economic progress to the vast bulk of their
populations.
18. The late Influential political scientist Samuel Huntington predicted that the
universalization of Western liberal democracy will be the final form of human government.
19. Author Francis Fukuyama envisioned a world split into different civilizations, each of
which has its own value systems and ideology.
20. In Samuel Huntington’s thesis, global terrorism is a product of the tension between
civilizations and the clash of value systems and ideology.
21. When a nation shifts away from a market-based economy, the state-owned businesses
are sold to private investors.
22. In general, command and mixed economies failed to deliver the kind of sustained
economic performance that was achieved by countries adopting market-based systems.
23. Economic freedom does not necessarily equate with political freedom.
24. The shift toward deregulation has been easier for former command economies than for
mixed economies.
25. In China, state-owned companies still dominate the banking, energy, telecom, health
care, and technology sectors.
26. If newly privatized firms are protected from foreign competition by barriers to
international trade and foreign direct investment, they continue to act like state monopolies.
27. A well-functioning market economy does not require laws to protect private property
rights and mechanisms for contract enforcement.
28. Without a legal system that protects property rights, and without the machinery to
enforce that system, the incentive to engage in economic activity can be reduced substantially by
private and public entities.
29. In most eastern European nations, the title to urban and agricultural property is often
uncertain because of incomplete and inaccurate records, multiple pledges on the same property,
and unsettled claims resulting from demands for restitution from owners in the pre-Communist
era.
30. Although free markets and democracy can still be found around the world, the tide has
been running in favor of command economies and totalitarian dictatorships.
31. By identifying and investing early in a potential future economic star, international firms
build brand loyalty and gain experience in that country’s business practices.
32. A country’s economic system and property rights regime do not influence the
attractiveness of the country as a market or investment site.
33. In both China and India, the shift toward a command-based economic system has
produced large gains despite weak property rights and endemic corruption.
34. It is more costly to do business in relatively primitive or undeveloped economies because
of the lack of infrastructure and supporting businesses.
35. Social unrest and disorder are less likely to be found in countries that contain more than
one ethnic nationality.
36. In the context of political economy, the past three decades have seen a general move
toward:
37. One common measure of economic development is a country’s: