Carlos Yaque

9/14/22

QUIZ 2

1. Please relate the factors that democracy strives to provide to its citicens to your country
of origin. Explain to what extent your country meets those "factors" or concepts for its
citizens... (For example, Freedom of expression)

The main goals of a democracy are to establish basic rights and representation for all
citizens and give them the option of control on all matters relating to their country. In the
Spanish constitution, like the US one, has a set of essential rights stated towards the
beginning of the document. Things such as freedom of speech, the right to a just court
system and to be legally represented, freedom of religion and press and so much more.
Spain itself, after the dictatorship under Franco decided to create a constitution and a
democratic system in order to grant its people more freedom and choice in matters relating
to their government.

2. Please explain the features of a market economy and the government´s role in a market
economy. Give examples. 

The main aspect of a market economy is that the resources of the nation are privately
owned, things like land, factories, etc. This type of market considers the supply and
demand and how it determines the market economy. In a market economy, the government
has little power and involvement in business. They oversee and manage laws and
restrictions to prevent monopolies over certain market goods and to preserver the rights of
all people working in the company itself. In addition, their job is to maintain a stable
political and economic environment for these companies to flourish. The most obvious
example of a market economy is the USA. Almost everything is privately owned, even
healthcare. The United States as it stands has a “free market” where consumers and
producers control production and pricing depending on buying habits among other things.
Because of this, companies have the ability to change prices and manufacturing practices
depending on the supply and demand of a certain market. The contrary would be an
economy like Chinas, were everything, including the people’s homes are owned by the
state. This in tern means that the government controls, regulates, and manages the market,
and it does not fluctuate or change naturally.
 3. How does corruption affect business? (Take into consideration short-term vs long-term,
and different main regions in the world)

In the short term, corrupt economies can be said to “aid” companies in getting things done
and faster. But this is a relative by paying someone money to give you the license or permit
to do something can expedite projects. In the long term this can also lead to less safety
supervision and safety measures causing hazardous environments and also lead to
companies losing reputation and other companies being hesitant to do business with these
companies and countries.

4. Define with your own words the concept of "Purchasing Power Parity". Do you think it
yields accurate information in order to compare economic wealthness of the citicens of a
country? Explain your answer and give some representative examples. 

Purchasing power parity is how 2 countries money can buy the same product. For example,
in the US a wheel of cheese could cost 50$ but with Venezuelan bolívars it could cost 150$. I
think it can represent large amounts of inflation in the country but does not necessarily the
fault of the people, but bad practices and economic decisions by the government itself. A
very famous and real life example is “The Big Mac Index” were The Economist used a
McDonald’s Big Mac to measure how many units of currency are needed to purchase one
depending on where you were. Recently we saw huge inflation and economic issues around
the world caused the Euro to lose value and the USD to reach a point of absolute parity
with the Euro. This of course is good for Americans who come to Europe as technically
things are now “cheaper” for them and more expensive in the US for us as they were a year
ago.