The Tendency for Societies to Revert to Subsistence Economies When

question 21

Multiple Choice

The tendency for societies to revert to subsistence economies when the fabric of civilization breaks down is because:

• A)Shops cannot operate when there is a risk of looting
• B)Uncertainty reinforces the role of the family and family-based production
• C)Specialization and the division of labor require an exchange economy which depends upon mutual trust and the rule of law
• D)The modern economy requires money which requires a stable national government

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Definitions:

Parallel Importing

The importation of legally produced goods without the permission of the intellectual property owner, usually to exploit price differences between markets.

Currency Exchange Rate

The value of one currency for the purpose of conversion to another, determining how much one currency is worth in terms of another.

Licensing

A business arrangement in which one party allows another to use its trademark, patent, or technology in exchange for a fee or royalty.

Franchising

A method of doing business wherein a franchisor licenses trademarks and proven methods of doing business to a franchisee in exchange for a recurring payment, and usually a percentage of gross sales or gross profits as well as the annual fees.