Question

T/F .   plz provide correct answer with solutions key of textbook: Gregory and Stuart Comparing Economic System in the Twenty-First Century,7th edition.

46. Japan’s Ministry of international trade and industry was the pioneer of Asian industrial policy, which tends to be much more comprehensive than in the U.S.

47. The administrative-command economy was the mechanism for resource allocation in the former USSR between 1929 and the word war 2, but was abandoned in 1946.

48. Today, the U.S., with 5 percent of world population, produces 22 percent of world GDP, while Eastern Europe and the former Soviet Union, with 7 percent of world population, produce 6 percent of world GDP.

49. The economic planning agency in the USSR Was Gosbank.

50. In practice, the planning process in the Soviet Union was so effective that the optimal plan was always chosen from among the set of consistent plans.

51. In the Soviet model of centralized socialism, a principal-agent problem was created by the information asymmetry that existed between enterprise managers and their superiors.

52. In the USSR, prices were changed frequently to equate supply and demand.

53. Economist Steve Hancke has found that for every 10 percent increase in economic freedom, GDP per capita rises between 7 and 14 percent.

54. Whereas prices played little, if any role in the allocation of most inputs in the Soviet Union, wage differentials were the primary mechanism of allocating labor.

55. The two major institutions of Soviet agriculture after 1928 were the Kolkhoz and the Sovkhoz.

56. China is the world's most populous country, with about 1.3 billion citizens.

57. Although the Chinese economy resembled the administrative-command economy of the USSR prior to 1970, it now resembles market socialism.

58. The Great Leap Forward and the Cultural Revolution both caused interruption of economic growth in China.

59. The contract responsibility system introduced in China in the late 1970s effectively brought collectivization to an end.

60. During the past twenty years, privatization has been extended to small and Medium-scale industry in China, but large-scale enterprises remain under state ownership.

61. China was able to finance about 40% of its capital formation in The 1990s with foreign direct investment.

62 Since 1980, China's rate of economic growth has been among the highest in the world.

63. The high rate of economic growth in the world in the 1990s can be attributed, in part, to the expansion of economic freedom and property rights.

64. The major difference in the distribution of income in planned socialist and capitalist economies is due to the absence of private ownership of income-producing property under socialism.

65. Frederic Pryor found that economic fluctuations in planned socialist economies were significantly less pronounced than In capitalist economies.

66. Among the factors leading to the decline of the planned socialist economies are lack of technological progress, diminishing returns to capital, inefficiency, problems with incentives and the complexity of planning.

67. Liberalization is the reduction of state controls and the introduction of markets.

68. Privatization has received major emphasis both in Eastern transition economies and in Western market economies.

69 The "J" Curve" has been the dominant pattern of economic performance in transition economies

70. Economists believe that differences in initial conditions, policy measures, and environmental factors are important determinants of differences in economic performance among transition economies.

71. Other things being equal, transition economies with initial conditions more similar to market economies have had higher rates of economic growth during the transition.

72. Other things being equal, economic growth of transition economies is directly related to the degree of liberalization.

73. Poland used the ‘’gradualist approach’’ to economic transition.

74. The Washington consensus was the basis for the big push approach to economic transition.

75. In the study of economic transition, complementarities refers to the notion that some elements of transition must be implemented simultaneously.

76. The Most fundamental element in the identification of differing economic systems is property rights.

75. In the study of economic transition, complementarities refers to the notion that some elements of transition must be implemented simultaneously.

76 The most fundamental clement in the identification of differing economic systems is property rights

77 The replacement of state-owned firms by private firms did not begin until the transition era.

78. The role of government in the economy varied widely in capitalist countries, bat not in socialist countries.

79. Mass privatization began during the 1980s.

80. The first stage of privatization is to identify properties to privatize.

81. The last stage of privatization is to restructure enterprises.

82. In practice, privatization has proven easier to achieve in small scale establishments than in the largest enterprises.

83. The two major approaches to privatization have been direct sale and the use of vouchers.

84. By 2000, Ukraine had a larger percentage of output produced in the private sector than did by Hungary.

85. Restructuring means the changing of decision-making arrangements in privatized enterprises and organizations.

86. The absence of macroeconomic institutions and frameworks caused little, if any, difficulty for the transition economies

87 During the transition process, direct state control of the economy through an economic plan has to be replaced by a macroeconomic system of indirect influence.

88. The policy environment of transition economies is much more simple than that of established capitalist market economies.

89. Poorly developed or poorly functioning banking and financial systems contributed to the collapse of investment in the early stages of economic transition in Russia and Eastern Europe.

90. Typically, savings increased sharply in the early stages of transitions.

91. Macroeconomic balance requires that the sum of investment and private savings equals the sum of the government balance and the foreign balance.

92. In all of the transition economies, the government balance increased between 1990 and 2002.

93. The typical pattern of inflation in transition economies has been an increase in the early stages of transition, followed by a reduction in more recent years.

94. In nearly all transition economies, there have been large reductions in the Gini coefficient for income inequality.

95. Between 1991 and 1996. Ten transition countries became candidate members of the European Union, and all ten became members of the WT0 and GATT.

96. While a convertible currency is a goal for all transition economies, it isn't necessary in order for a country to engage in free trade with the rest of the world.

97. Aid to Transition economies from IMF has been primarily for domestic stabilization, whereas aid from te world bank have been long term economic development.

98. As a group, transition has fired poorly in attracting foreign direct investment.

99. Although private-sector employment as a percentage of total employment varied widely among transition economies in the early stages of transition, in later stages there has been among transition has been very little variation in relative private-sector employment.

Answer 1

46. True

By the end of World War II Japan was completely destroyed.Yet Japan's industrial policy has been so comprehensive that today many developing countries look to the Japanese industrial model and Japan in turn provides foreign aid to developing nations that follow it's model. Also another reason Asian countries are looking to Japan is that they're probably the only country to modernize without losing their culture and traditions. US trade deficit with China has been growing faster than ever. US is facing a confident Asia developed on the Japanese industrial policy.

47. False

The Soviet Union did follow the administrative-command economy from 1929 to the World War II and although the Soviet Union did eventually win World War II it suffered very heavy casualties. Nearly 27 million people died in the war and the country was in ruins. But unlike most other European countries where there was socio-political reforms which lead to economic growth, in the Soviet Union economic policy continued following an administrative-command economy, and all institutions became even more centralized and secretive than before World War II. Even then there was rapid economic recovery but this was largely because of the large amounts of unexploited potential available in the Soviet Union.

48. True

Many jobs were guaranteed to the people of the former Soviet Union but there was a high rate of disguised unemployment which led to an economic decline in many of these countries. Many of these countries were unable to meet their food requirements even. Also former Soviet Union countries are one of the most poorly documented countries so getting accurate economic data is also difficult.

49. False

The economic planning agency in the USSR was the State Planning Committee, also known as the Gosplan. Gosbank on the other hand was the central bank of USSR. In fact it was the only bank in USSR from the 1930s to 1987