1) One of the components of the political economy is the economic system of a country. Discuss the differences between a market-based economy and a command economy. Include in your description
of each type of economy an indication of: Who determines production? What is the role of the government? How does each type of economy sustain itself (i.e. continue to develop)? (1 point)

2) What types of conditions in the political economy encourage economic growth? What is the role of strong property rights in economic growth? (1 point)

3) There are two types of violation of property rights: public actions and private actions. What do private action violations involve? What do public action violations involve? (1 point)

4) Describe (name and explain) the four (4) changes or developments which usually occur when a country undergoes economic transformation and moves toward a market-based economy. (hint: pay
attention to the Power points) (2 points)

5) Read the Closing Case “Revolution in Egypt” on pages 85-86. Applying the facts of the case, answer the following questions: (2 points)

a) What were the underlying causes, economic and political, of the collapse of the Mubarek regime?

b) What do you think the Egyptian government needs to do in order to get the economy growing again and to attract foreign capital? What are the risks to the government taking such actions?

c) What dangers do you see in the current trajectory of the Egyptian economy? What are the implications of these dangers for foreign companies considering doing business in Egypt? What do you
think it would take to encourage more foreigners to visit, invest,
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and do business in Egypt? Would such inward investment be good for the Egyptian economy?

6) Read the Country Focus “Corruption in Nigeria” on page 50 and Part 2 Case “Siemens Bribery Scandal” on page 150 and answer the following questions (2 points)
a) Describe the political, social, and economic conditions in Nigeria from the 1970’s to the year 1999?
b) How did Nigerian military dictator Sani Abacha violate the property rights of the people of Nigeria? What were some of the results of this public action violation?
c) What explains the high level of corruption at Siemens? How did managers engaged in corruption rationalize it?
d) What is the impact of corrupt behavior by Siemens on the business environment in countries where it does business? How does the kind of corruption Siemens engaged in distort competition?

7) Mini-Research on Corruption (1 point)
The level of corruption varies from country to country. Explore this topic further by doing research online. Go to the Transparency International website at www.transparency.org. At the top of
the home page, click on “What We Do” and look at the drop down menu. Select “Corruption by Country.” Choose a country to investigate by either using the drop down menu on the top right hand side
or by clicking on the map. The drop down menus in each country section can lead to more information. Research the level of corruption in the country you have chosen, the type of corruption that is
present in the country, etc. and write at least one paragraph (minimum five to six sentences) analyzing the state of corruption in the country and describing the types and level of corruption in
the country you have chosen.