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| Question | Answer |
| Give definition of The rule of the game | - Entrepreneurs decision to start a business is highly dependent on: POSSIBILITIES, INCENTIVES, PROFITABILITY -Entrepreneurs can lead to: productive, unproductive and destructive |
| What effects result in changing the rules of the game? | The overall moral has a huge influence on the productivity! RotG specifies the relative pay offs to different entrepreneurial activities. (productive/unproductive) |
| Institutions and policy Name 5 elements that contribute to the possibility and incentives for innovation and productive entrepreneurship! | 1) Private Ownership 2) Availability of production factors 3) Economic freedom 4) Legal protection of property rights 5) political stability, rule of law and regulative quality 6) (Democracy) |
| Introducing China; Explain shortly China's history | - Qing Dinasty until 1911, Feudal slavery -Revolution 1912 (end of slavery) -After sino-japan war-Communist takeover -58-61 "Great leap forward" 30mln deaths -Cultural revolution 66-76 -Xiao Ping reforms starting 79 - start of rise |
| Explain Chinas "long march" to global competitiveness | 1)Mao Zedung: Great leap forward, 30mln deaths. Cultural revolution, Totalitarism 2)Economic liberalization under Xiaoping (create private sector, end of collect. agriculture, banks, stockmarket, FDI,Export) 3) Jiang Zemin, excellent growing 90's 4) Hu Jiantao skyrocketing 02-12, even more export. growing middle class 5) Jinping today |
| Socialism with Chinese Characteristics - Name three Pros and cons | + huge growth(10x GDP from 78-05) + Decline of poverty rate from 53% of population (1981) to 3% (2008). +Rise as major player in global economy - Large disparities (regions, social classes) -Growing corruption -Environmental damage |
| Explain the four common pattern of Chinese companies expansion! | 1) core technologies are imported 2) Absortion of technology, applied to own market 3)increase export, first developing countries then global market. 4) Consolidating domestic and global market position by pushing competition aside |
| What is the key financial institution in China? | China Development Bank -Traditionally supporting large-scale high quality domestic infrastructure projects New: financing infrastructure projects world wide (2x World Bank spendings) |
| Explain China's industrial masterplan | Made in China 2025; General aim: become a manufacturing superpower Specific aim: Become more productive and self sufficient in industries like Automotive, Machinery, robotics, IT, railway |
| What are the means for China's indutrial masterplan? | - Creation of innovation centers - More pivate and public research subsidies -Large/low-interest loans -Assistance in buying foreign competitors |
| What are the short term consequences of China's industrial masterplan? | Huge demand increase for smart manufacturing products like robots, smart sensors, chips --> great business opportunities for foreign companies |
| What are the long term consequences of industrial masterplan? | Challenge for the economic primacy of the current leading economies and international corporations. |
| Regarding Innovation and entrepreneurship, What has changed since Deng's "Socialism with Chinese Characteristics"? | During the communist era, there was very poor implementation of policies encouraging a spirit of enterprise and initiative, innovation and industrial competitiveness. Deng's introduction of "" has changed in favour of economic development! |
| Name the three groups in MENA classification! | Group 1-Oil exporters, high per capita income, small populat.(Kuwait, UAE, Qatar) Group2-Oil exporters , low per capita income, large pop. (Algeria, Egypt, Iran) Group 3-Non oil exporters, integrated in GCC economies(Jordan, Lebanon) Group 4-Non oil eporters, diversified and integrated with EU (Maroc, Tunisia) |
| Name 4 Arguments why resource rich/dependent countries empirically grow slowlier than resource poor economies | Argument 1: Volatile Oil prices Argument2:Danger,Mono cultural economy Argument 3: Oil strenthens autocratic GV Argument 4: Foreign intervention |
| Development trap natural resource abundance; Define Argument 1: Volatile prices | -huge volatility on oil, economic distress and social instability - higher vulnerability to shocks - poor management leads to: Misspent money and no mitigation of decreases; speculation crisis |
| Development trap natural resource abundance; Define Argument 2: Danger of Mono-Cultural Economy | - when countries dont invest in other sectors--> not creating business and jobs, Mena region has highest unemployment MENA had highes population growth, 60% of the population is under 29 |
| Development trap natural resource abundance; Define Argument 3: Oil strenghtens autocratic Governments | - financial freedom leads to bad governance Two developments of those countries: Back to the roots or Westernize |
| Autocratic governments and weak governance. Define Back to the roots Movement! | BACK TO THE ROOTS! Return to the faith and law of Islam. The creation of true Islamic order. Courage to be authentically themselves by purging state and society of foreign and infidel accretion. End of the corrupt and suppressive regimes and the vision of a new caliphate under an enlightened leadership. |
| Autocratic governments and weak governance. Define Westernize | WESTERNIZE! Free institutions at every level of public life, from the village to presidency. Liberation and equal rights for all, also for women. Freedom of speech. |
| Development trap natural resource abundance; Define Argument 4: Foreign Intervention | Increased danger of foreign intervention due to strategic importance of the country as a major oil supplier. Example Iran: coup d'etat |
| Give two reasons why institutions and policy contribute towards the desired productive effect for society. | 1) They provide the Infrastructure for production and productivity(Land, Labor, Capital and Human Resource) 2) They formulate the rule of the game which determines the relative payoffs of different entrepreneurial activites |
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