Chapter 02
National Differences in Political Economy

True / False Questions

1. A country's political economy and culture are independent of each other.
True False

2. It is not possible to have democratic societies that emphasize a mix of collectivism and individualism.
True False

3. The communists believed that socialism could be achieved by democratic means, and turned their backs on violent revolution and dictatorship.
True False

4. In an individualist society, the welfare of society is best served by letting people pursue their own economic self-interest.
True False

5. The central message of collectivism is that individual economic and political freedoms are the ground rules on which a society should be based.
True False

6. There is a global trend of societies shifting from individualism toward collectivism.
True False

7. It is possible to have a democratic state where collective values predominate.
True False

8. It is possible to have a totalitarian state that is hostile to collectivism and where some degree of individualism is encouraged.
True False

9. The most practical form of democracy is direct democracy.
True False

10. Most modern democratic states practice representative democracy.
True False

11. In a market economy, if demand for a product exceeds supply, prices will rise, signaling to producers to produce more.
True False

12. The number of command economies has fallen dramatically since the demise of communism in the late 1980s.
True False

13. Because international businesses are headquartered in different countries, a nation's legal system is usually of very little interest to international business managers.
True False

14. A country's legal system can affect the