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Chapter
2 Outline
Critical Discussion Questions
- Free market economies stimulate greater economic growth,
whereas state-directed economies stifle growth! Discuss.
- A democratic political system is an essential condition
for sustained economic
progress. Discuss.
- During the late 1980s and early 1990s, China was routinely
cited by various international organizations such as Amnesty International
and Freedom Watch for major human rights violations, including torture,
beatings,
imprisonment, and executions of political dissidents. Despite this,
in the mid-1990s China received record levels of foreign direct investment,
mainly from firms based in democra tic societies such as the
United States, Japan, and Germany. Evaluate this trend from an ethical
perspective. If you were the CEO of a firm that had the option of making
a potentially very profitable investment in China, what would you do?
- You are the CEO of a company that has to choose between
making a $100 million investment in Russia or the Czech Republic. Both
investments promise the same long-run return, so your choice is driven
by risk considerations. Assess the various risks of doing business in
each of these nations. Which investment would you favor and why?
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