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International Business
Q:
The Internet is a libel-free zone.
Q:
Charging what the market will bear is a suggested strategy for IP-rich firms to make money in China.
Q:
In the United States, a patent reverts to public domain if it is not manufactured and sold within a specified period.
Q:
The General Agreement on Tariffs and Trade is the most comprehensive multilateral agreement on intellectual property to date.
Q:
In many code-law countries, ownership of intellectual property rights is established by registration rather than by prior use.
Q:
The ownership of intellectual property rights in United States is established by prior use rather than registration.
Q:
Legal ownership in one country does not necessarily mean ownership in other countries.
Q:
A certain level of piracy may be beneficial for some companies as it provides an unplanned product trial.
Q:
One of the deterrents to litigation with respect to disputes in the international business arena is the fear of creating a poor image and damaging public relations.
Q:
The sole requirement of an arbitration clause is that the parties agree to abide by the awards resulting from the process of arbitration.
Q:
If conciliation is not used to settle a difference in an international business dispute or an agreement cannot be reached, the next step is litigation.
Q:
Statements made during conciliation may not be disclosed in subsequent litigation.
Q:
Disputes relating to commercial transactions must be settled in courts and cannot be settled informally.
Q:
When dealing with foreign countries, a marketer should refer to the laws of the home country for guidance.
Q:
The World Court can settle disputes between a company and a government.
Q:
In Marxistsocialist societies, law is strictly subordinate to prevailing economic conditions.
Q:
Code law prohibits the receipt and payment of interest on loans.
Q:
Common law prescribes specific patterns of social and economic behavior for everyone.
Q:
Steps are being taken in common-law countries to codify commercial law, even though the primary basis of commercial law is common law.
Q:
Code law is based on an all-inclusive system of written rules of law.
Q:
The form of law found in Germany, France, and Japan is called civil or code law.
Q:
The form of law found in the United States and England is classified as civil or code law.
Q:
Compare and contrast the government agencies that are involved in promoting foreign investment and international business.
Q:
Ranzan Inc. has invested in a country showing signs that it will use domestication in the near future to force foreign investors to share more of the profits with the government. Cite and describe a strategy to deal with this potential of domestication that Ranzan could follow to ensure that its business remains profitable.
Q:
What are the conditions under which relations between governments and MNCs are generally positive?
Q:
Discuss the threats posed by cyberterrorism or cyberattacks. Give an example of a recent occurrence of these.
Q:
Briefly discuss the role of PSAs and NGOs.
Q:
List and briefly discuss the various economic risks that international companies must face when they seek to market abroad.
Q:
Discuss the terms confiscation, expropriation, and domestication. Choose one of these concepts and describe a situation in which it might occur.
Q:
Describe the concept of nationalism and list some of the ways it manifests, particularly in today's political environment.
Q:
Discuss stability of governments and list the main political causes of instability in international markets.
Q:
You live in a nation that is considered to be a sovereign state. What does this mean?
Q:
Waldo's company was expanding into some underdeveloped countries, and needed to acquire risk insurance to cover potential fallout from political unrest that was occurring in those countries. What organization might be able to provide this for Waldo?
A) Commodity Futures Trading Commission (CFTC)
B) the Federal Trade Commission (FTC)
C) the Small Business Administration (SBA)
D) the United States International Trade Commission (USITC)
E) the Overseas Private Investment Corporation
Q:
Which agency underwrites trade and investments for U.S. firms?
A) Export-Import Bank
B) the Federal Trade Commission
C) the Agency for International Development
D) Social Security Advisory Board
E) the Overseas Private Investment Corporation
Q:
What is the most important reason for a country to encourage foreign investment?
A) to improve the global image of a country
B) to accelerate the development of an economy
C) to evade political tensions between countries
D) to minimize negative political fallouts within the domestic economy
E) to improve ties between the investing country and the host country
Q:
Within the same country, some foreign businesses may fall prey to politically induced harassment, while others may be placed under a government umbrella of protection and preferential treatment. What factor explains this difference?
A) the level of domestication achieved
B) the differences in level of technology between the two countries
C) the cultural differences between the host nation and the business's home country
D) the import tariffs set by the host country
E) the evaluation of a company's contribution to the nation's interest
Q:
What principle U.S. agency supports U.S. businesses abroad?
A) State Department of Entrepreneurship
B) Better Business Bureau
C) Department of Commerce
D) Department of Foreign Relations
E) Department of Defense
Q:
What is the U.S. government's policy toward multinational corporations that are confronted with situations where bribery is an issue?
A) A bribe may be paid as long as it is not a domestic situation.
B) Bribery is justified if it is a documented traditional practice in a country.
C) A bribe can be paid in a foreign country if it is tied to national security.
D) It is illegal for a U.S. citizen to pay a bribe.
E) The issue revolves around the customs of the country and each issue is decided separately.
Q:
An attempt to lessen political risks by paying those in power to intervene on behalf of the multinational company is referred to as a
A) subornation.
B) protectionism.
C) political payoff.
D) buyout.
E) rake-off.
Q:
While expanding the investment base of a company, what can be used as a powerful ally in dealing with threats of government takeovers or harassment?
A) banks that have lent money to the host government
B) the World Trade Organization
C) the International Labor Organization
D) regional trade blocs
E) opposing political parties
Q:
The most effective long-range solution to a situation where a foreign government is demanding local participation in a multinational corporation's business activities in the host country is
A) joint ventures.
B) licensing.
C) expanding the investment base.
D) planned domestication.
E) political payoffs.
Q:
Which strategy is most effective in minimizing political risks for a multinational corporation in situations in which the technology is unique and the risk is high?
A) trade embargo
B) licensing
C) expanding the investment base
D) planned confiscation
E) expropriation
Q:
Which strategy to minimize political vulnerability and risk has the advantage of engaging the power of several investors and banks in the host country whenever any kind of government takeover or harassment is threatened?
A) joint ventures
B) licensing
C) expanding the investment base
D) sole proprietorship
E) political bargaining
Q:
Which strategy can be effective in forestalling or minimizing the effect of a total takeover of a multinational corporation's holdings by a foreign government?
A) confiscation
B) sole proprietorship
C) expanding the investment base
D) advertising
E) leasing
Q:
What strategy is used by multinational corporations to minimize political vulnerability and risk?
A) expropriation
B) sanctions
C) buyouts
D) confiscation
E) licensing
Q:
Juliet is concerned with the potential for political harassment when her company enters a new international market. To reduce the risk of political harassment, she is most likely to consider using ________ to enter the market.
A) externally produced products
B) a smaller investment base
C) foreign technology
D) a joint venture
E) the threat of sanctions
Q:
Meteora Inc. is planning to enter the Kenyan market by establishing a mobile phone manufacturing operation in Kenya. Meteora is most likely to have a positive relationship with Kenyan government through its investment if it
A) uses locally produced resources.
B) imports phone components from China.
C) establishes an R&D center in California and has all its technology patented there.
D) ensures that its middle and upper management are expatriates.
E) bargains for a tax holiday for the next five financial years.
Q:
Relations between governments and MNCs are generally positive if the investment
A) increases the volume of imports.
B) uses globally produced resources.
C) transfers capital, technology, and skills.
D) brings in a higher number of foreign nationals.
E) decreases the volume of exports.
Q:
In terms of political risk, what poses the greatest threat to international marketers?
A) newer environmental regulations approved by global trade bodies
B) change of economic policies
C) exchange rate fluctuations affecting margins
D) the possibility of the government actually failing
E) membership or withdrawal of membership of the government in trade blocs
Q:
Bao is attempting to forecast political instability and help his company's management identify and evaluate political events and their potential influence on current and future international business decisions. Bao is engaged in
A) political risk assessment.
B) political confiscation.
C) democratization.
D) arbitration.
E) risk expropriation.
Q:
As the FBI investigates security breaches, the analyses are more often pointing to ________ as the most serious threat.
A) Russian government supported hackers
B) religious extremists
C) white supremacists
D) American rogue hackers
E) the Chinese government
Q:
Which form of terrorism is most likely to use the Internet to inflict damage?
A) Germterrorism
B) Bioterrorism
C) Cyberterrorism
D) Ecoterrorism
E) Narcoterrorism
Q:
Why do terrorism experts predict multinational businesses will be targeted by terrorists more frequently?
A) They impose export controls on the underdeveloped nations.
B) They are the major cause for political sanctions against Arab nations.
C) They are less well defended than government targets.
D) They destroy and pollute the environment.
E) They are subterfuge for espionage agents.
Q:
Which of these organizations is an NGO (nongovernmental organization)?
A) Central Intelligence Agency
B) Peace Corps
C) Millennium Challenge Corporation
D) Oxfam
E) FedEx
Q:
What are effective tools that political and social activists (PSAs) use to spread word about their causes?
A) political sanctions
B) monetary barriers and trade embargoes
C) the Internet and cellphones
D) local-content laws and questionnaires
E) export controls
Q:
What is true of political sanctions?
A) Political sanctions normally control and rectify situations within a nation.
B) Political sanctions are generally unsuccessful.
C) Political sanctions are illegal.
D) The United Nations encourages boycotts as a means of settling political disputes.
E) The use of political sanctions is the most effective way to increase world trade.
Q:
Stopping or refusing to trade with another nation for political reasons is called
A) monopolizing.
B) boycotting.
C) confiscation.
D) democratization.
E) expropriation.
Q:
Which of these items is most likely to be subjected to price control?
A) leather garments
B) mobile phone accessories
C) aspirin and antacids
D) camcorders and lenses
E) ceramic tiles
Q:
In North Korea, foreign investors or producers are required to sell products at prices stated by the North Korean government rather than letting market value and demand determine the prices. This implies that there is application of
A) exchange controls.
B) local-content laws.
C) import restrictions.
D) tax controls.
E) price controls.
Q:
Price controls applied during inflationary periods may have the effect of
A) controlling the cost of living.
B) restricting exports to foreign countries.
C) negotiating trade contracts favoring the host country.
D) encouraging imports.
E) collecting taxes on foreign investments.
Q:
The government of Namibia is strapped for cash, and it has decided to tax all foreign investments (such as food packaged in the country) by up to 40 percent of the appraised value. The Namibian government has found that this is the handiest and quickest means of finding operating funds. The economic risk in discussion here is
A) exchange controls.
B) local-content laws.
C) tax restrictions.
D) tax controls.
E) price controls.
Q:
Taxes must be classified as a(n) ________ risk when used as a means of controlling foreign investments.
A) political
B) social
C) ignorable
D) environmental
E) harmless
Q:
The United States requires that 50 percent of all parts used to construct an automobile in the United States be manufactured in the United States. As a result of this, when Toyota Motor Company builds automobile manufacturing plants in Tennessee and Ohio, it faces economic risks associated with
A) exchange controls.
B) local-content laws.
C) export restrictions.
D) tax controls.
E) price controls.
Q:
In Thailand, it is required that any milk product sold in the country by a foreign company must use the milk that is at least 50 percent produced by Thai dairy farmers. What economic risk is faced by the international producers of milk products in this situation?
A) exchange controls
B) local-content laws
C) export restrictions
D) tax controls
E) price controls
Q:
If there is a substantial amount of capital leaving a country, what is a country most likely to implement to control the situation?
A) exchange controls
B) local-content laws
C) import restrictions
D) tax controls
E) price controls
Q:
Marziland found that a large amount of capital was leaving the country due to foreign corporate ownership, so it instituted controls over all movements of capital to conserve the supply of foreign exchange. These are called ________ controls.
A) exchange
B) local-content
C) price
D) tax
E) production
Q:
Which statement about domestication is correct?
A) The ultimate goal of domestication is to force domestic investors to share more of the profits with the government.
B) The risk of domestication appears to have decreased over the last two decades.
C) Domestication has always led to more technologically advanced and competitive businesses.
D) Countries often require companies to become domesticated as a condition for investment.
E) Domestication refers to the seizing of a company's assets without payment.
Q:
The government in Chile recently informed Mario's company that his retail grocery chain in Chile would have to be gradually turned over to the people of Chile by the year 2050 as it is a foreign company in Chile. Additionally, starting the following year, 50 percent of the board of directors of the Chilean operation of the company must be Chileans. What political risk action is Mario's company facing in Chile?
A) confiscation
B) expropriation
C) domestication
D) patronization
E) nationalization
Q:
________ occurs when host countries gradually cause the transfer of foreign investment to national control and ownership through a series of government decrees.
A) Confiscation
B) Expropriation
C) Domestication
D) Democratization
E) Socialization
Q:
When an expropriated investment becomes a government-run entity, it is
A) democratized.
B) domesticated.
C) nationalized.
D) prioritized.
E) socialized.
Q:
When a government seizes an investment of a foreign investor but some reimbursement for the assets is made, the government follows a process called
A) confiscation.
B) expropriation.
C) domestication.
D) exchange controls.
E) local-content laws.
Q:
The seizing of a company's assets without payment is called
A) confiscation.
B) expropriation.
C) domestication.
D) exchange controls.
E) local-content laws.
Q:
With respect to the political risk that can be faced by a company seeking to invest abroad, which action is most severe?
A) confiscation
B) expropriation
C) domestication
D) exchange controls
E) local-content laws
Q:
What is true of nationalism?
A) The more a country feels threatened by some outside force the less nationalistic the country becomes.
B) A call to "buy our country's products only" is one form of manifestation of national feelings.
C) Nationalist feelings lead to loss of control over foreign investment.
D) The more a country's domestic economy declines, the less nationalistic it becomes.
E) Nationalistic feelings are not prevalent in economically prosperous countries.
Q:
With which term would the phrase "Buy American" be most closely associated?
A) socialism
B) communism
C) nationalism
D) abstractionism
E) polarism
Q:
Which action is most likely a manifestation of nationalism?
A) membership in bilateral trade treaties
B) a call to buy a global counterpart's products
C) restrictions on imports
D) removal of tariffs and quotas
E) a focus on global security
Q:
________ is an intense feeling of state pride and unity, an awakening of a country's people to pride in their country.
A) Nepotism
B) Absolutism
C) Fascism
D) Nationalism
E) Polarism
Q:
What event caused a drop in "economic freedom" in the United States, according to the Heritage Foundation?
A) Hurricane Katrina
B) the war in Iran
C) Obamacare
D) the bombing of the World Trade Towers
E) the economic stimulus of 20082009
Q:
What country recently allowed women the right to vote for the first time?
A) Croatia
B) Iran
C) Bolivia
D) Saudi Arabia
E) Venezuela
Q:
What is a common term for a form of government in use today?
A) protectionism
B) duopoly
C) oligopoly
D) capitalism
E) oligarchy