WEEK 2

Question 1

political economy

Answer 1

Refers to how the political, economic, and legal systems of a country are interconnected and collectively influence its economic well-being

Question 2

Political System

Answer 2

The system of government in a nation, which influences both its economic and legal systems

Question 3

What is collectivism in political systems?

Answer 3

A belief that group goals are more important than individual rights or freedoms.

Question 4

What is individualism in political systems?

Answer 4

A belief that individual freedom and self-interest are more important than the needs of the group

Question 5

How do collectivism and totalitarianism relate?

Answer 5

Collectivist systems often lean toward totalitarian rule

Question 6

What does collectivism say about property ownership?

Answer 6

Property should be owned collectively, not privately

Question 7

How do individualism and democracy relate?

Answer 7

Individualist systems usually support democracy and personal freedom

Question 8

Who is a key thinker behind collectivist ideas?

Answer 8

Karl Marx — he believed capitalism unfairly benefits a few people.

Question 9

What happened to most communist states by the 1990s?

Answer 9

They collapsed or moved away from totalitarianism (e.g., Soviet Union).

Question 10

What are the two types of socialists?

Answer 10

Communists – support revolution and totalitarianism.

Social Democrats – support democratic, peaceful change.

Question 11

What shift did social democracies in the West make in the late 20th century?

Answer 11

They moved toward privatization and free markets.

Question 12

What does individualism promote?

Answer 12

Freedom of expression, self-reliance, personal responsibility, and private ownership.

Question 13

Which thinker supported individualism in economics?

Answer 13

Adam Smith — known for the “invisible hand” theory.

Question 14

What are two main rules in individualism? (expression and when does society benefit?)

Answer 14

Freedom of expression.
Society benefits when individuals pursue their own goals.

Question 15

What is a democracy?

Answer 15

A system where power belongs to the people, directly or through elected leaders.

Question 16

What are 3 key features of a democracy?

Answer 16

1. Free speech and media
2. Regular elections with voting rights
3. Fair and independent courts
4. Term limits for leaders
5. Neutral government workers
6. Independent police and military

Question 17

What is totalitarianism?

Answer 17

A system where one person or party controls all aspects of life and suppresses opposition.

Question 18

What are common features of totalitarian regimes?

Answer 18

No free elections, media censorship, and punishment of political opponents.

Question 19

What is Communist Totalitarianism?

Answer 19

A system where one party rules and aims to create a socialist state.
Examples: China, North Korea, Cuba.

Question 19

What is Theocratic Totalitarianism?

Answer 19

Religious leaders hold power, and laws are based on religion.
Examples: Iran, Saudi Arabia.

Question 20

What is Tribal Totalitarianism?

Answer 20

One tribal group holds power, common in parts of Africa with colonial history.

Question 21

What is Right-Wing Totalitarianism?

Answer 21

Political freedom is limited, but economic freedom is allowed.
Examples: Nazi Germany, Fascist Italy.

Question 22

What is a pseudo-democracy?

Answer 22

A country that holds elections but lacks real political freedom or fairness.

Question 23

What are the three main types of economic systems?

Answer 23

Market economy, command economy, and mixed economy.

Question 24

What is a market economy?

Answer 24

An economy where all businesses are privately owned and prices are set by supply and demand.

Question 25

What is a key feature of a market economy?

Answer 25

Consumers "vote" with their money — buying what they want, which shapes what businesses produce

Question 26

What is a command economy?

Answer 26

The government owns all production and decides what to produce, how much, and at what price

Question 27

What ideology is a command economy based on?

Answer 27

Collectivism — doing what’s best for society over individuals

Question 28

What is a mixed economy?

Answer 28

A system with both private and state-owned sectors, combining market and command economy features.

Question 29

Where are mixed economies most common?

Answer 29

In most developed countries today

Question 30

What are the three main types of legal systems?

Answer 30

Common law, civil law, and theocratic law.

Question 31

What is common law?

Answer 31

A legal system based on tradition, precedent, and past cases, judges can interpret the law

Question 32

Which countries use common law?

Answer 32

UK, United States, Canada, and others.

Question 33

What is civil law?

Answer 33

A system based on written legal codes that judges follow strictly.

Question 34

What is theocratic law?

Answer 34

Law based on religious teachings — mainly Islamic law.

Question 35

What is a contract?

Answer 35

A legal agreement between two or more parties.

Question 36

What is CISG?

Answer 36

The United Nations Convention on Contracts for the International Sale of Goods — a set of rules for global contracts.

Question 37

What if CISG is not used or accepted in a deal?

Answer 37

Businesses can use arbitration to settle disputes.

Question 38

What are property rights?

Answer 38

Legal rights to use, control, and benefit from resources like land, ideas, or money.

Question 39

Why are strong property rights important?

Answer 39

They create a secure environment for businesses and investors.

Question 40

What are two ways property rights can be violated?

Answer 40

Private action Public action (often involving corruption)

Question 41

What is private action?

Answer 41

Crimes like theft, blackmail, or extortion by individuals or criminal groups.

Question 42

What is public action?

Answer 42

When government officials abuse power — e.g., unfairly seizing property, demanding bribes, or using extreme taxes.

Question 43

How does public action affect business?

Answer 43

It weakens property rights and discourages foreign investment.

Question 44

What happens when a country has high corruption?

Answer 44

Less foreign investment, slower economic growth, and reduced international trade

Question 45

What is the Foreign Corrupt Practices Act (FCPA)?

Answer 45

A U.S. law that makes it illegal for American businesses to bribe foreign officials.

Question 46

When was the FCPA passed, and who does it apply to?

Answer 46

Passed in the 1970s; applies to all U.S. publicly traded companies.

Question 47

What does the FCPA require from companies?

Answer 47

Accurate records to prove they are not paying bribes.

Question 48

What is intellectual property?

Answer 48

Creations of the mind like software, music, inventions, or designs.

Question 49

What is a patent?

Answer 49

Legal protection for inventions — gives exclusive rights to make or sell them.

Question 50

What is a copyright?

Answer 50

Protection for creative works like books, music, or films.

Question 51

What is a trademark?

Answer 51

Protection for brand names, logos, or product identifiers.

Question 52

Does intellectual property protection vary by country?

Answer 52

Yes — protection laws differ across nations.

Question 53

What are two global organizations/treaties that support IP protection?

Answer 53

World Intellectual Property Organization (WIPO) Paris Convention for the Protection of Industrial Property

Question 54

What are product safety laws?

Answer 54

Laws that require products to meet safety standards before being sold.

Question 55

What is product liability?

Answer 55

The legal responsibility if a product causes harm or damage.

Question 56

What’s the difference between civil and criminal product liability?

Answer 56

Civil law = fines or compensation. Criminal law = fines or prison for the company or responsible individuals.

Question 57

What are two big concerns when entering a new international market?

Answer 57

Ethical concerns (e.g., human rights, bribery) Investment attractiveness (e.g., risks, costs, benefits)

Question 58

What makes a country more attractive for international business?

Answer 58

Stable politics, democracy, strong legal systems, low corruption.

Question 60

What makes a country riskier for investors?

Answer 60

High corruption, weak laws, and totalitarian governments.