Chapter 2: Country Differences in Political Economy

Question 1

What are the 2 political systems?

Answer 1

1. Collectivism
2. Socialism

Question 2

Collectivism

Answer 2

A political system that stressed the primacy of collective goals over individual’s goals.

Question 3

What are the 2 forms
of Socialism?

Answer 3

1. Communism
2. Socialism

Question 4

Communism

Answer 4

revolution and totalitarian dictatorships: North Korea, Cuba, Laos,
Vietnam & (China - State Capitalism)

Question 5

Socialism

Answer 5

socialism by democratic means: Australia, Britain, France,
Germany, Scandinavia, Canada

Question 6

Individualism

Answer 6

Political system that focuses on the interests of the individual over the interests of the
state.

Question 7

Individualism has 2 central tenets:

Answer 7

1. Individual Freedom and self-expression – John Stuart Mill
2. Let people pursue their economic self-interest – Adam Smith

Question 8

Democracy

Answer 8

Political system in which the people elect representatives to form the government.

Question 9

What are the 6 Democracy demands:

Answer 9

1. Freedom of expression
2. Free media
3. Regular elections
4. Limited terms for representatives
5. Fair court system
6. Non-political – police and army

Question 10

Totalitarianism

Answer 10

All the constitutional guarantees such as an individual’s right to
freedom of expression and organization, free media, and regular
elections—are denied to the citizens.

Question 11

What are the 4 types of Totalitarianism:

Answer 11

1. Communist Totalitarianism
2. Theocratic Totalitarianism
3. Tribal Totalitarianism
4. Right-wing Totalitarianism

Question 12

What are the 3 economic systems:

Answer 12

1. Market Economy
2. Command Economy
3. Mixed Economy

Question 13

Market Economy

Answer 13

• All productive activities are privately owned;
• Supply and demand determine price and production

Question 14

Command Economy

Answer 14

• The government determines the allocation of resources, including the
  determination of production and prices.
• France, Argentina and India have experimented with this in the last century

Question 15

Mixed Economy

Answer 15

• Some sectors are left to private ownership and free market mechanisms;
• Others have significant government ownership and government planning.
• Britain, France, Sweden

Question 16

Legal System

Answer 16

A system of rules that regulates behavior and the processes by which
the laws of a country are enforced and through which redress of
grievances is obtained.

Question 17

3 Different Legal Systems:

Answer 17

1. Common Law
2. Civil Law
3. Theocratic Law

Question 18

Common

Answer 18

(most Commonwealth states)
System of law based on tradition, precedent, and custom.

Question 19

Civil Law

Answer 19

(>80 countries)
Law is based on a very detailed set of written laws and codes.
Less flexible as it only allows judges the power to apply the law
Germany, France, Japan, Quebec (Canada), Russia.

Question 20

Theocratic

Answer 20

System of law based on religious teachings: Islamic (Sharia) Hindu (Dharamsastras), Jewish (Halakha),
previously Christian (Canon law)

Question 21

Property rights can be violated in two ways:

Answer 21

1. Private Action
2. Public Action

Question 22

Determinants of Economic Development

Answer 22

1. Gross National Income
2. Purchasing Power Parity (PPP)
3. Human Development Index (HDI)

Question 23

Innovation

Answer 23

new products, new processes, new organizations,
new management practices, and new strategies.