Deck 3: Legal, Technological, and Political Environments

Question 1

In which of the following countries are interest-bearing transactions not allowed?

A) India
B) South Korea
C) Iran
D) Mexico

Answer 1

C

Question 2

________ operates under bureaucratic law.

A) England
B) Mexico
C) Iran
D) China

Answer 2

D

Question 3

Which of the following is a foundation for legal systems?

A) common law
B) the principles of comity
C) administrative law
D) regulatory law

Answer 3

A

Question 4

The U.S. Freedom of Information Act is an example of ________.

A) common law
B) civil law
C) statutory law
D) bureaucratic law

Question 5

The foundation of the legal system in China is ________.

A) common law
B) civil law
C) religious law
D) bureaucratic law

Question 6

In Iran, the religious law is based on the teachings of the ________.

A) Bible
B) Koran
C) Buddha
D) Napoleonic Code

Question 7

Civil law originated in biblical times with the ________.

A) French
B) Greeks
C) Jews
D) Romans

Question 8

Religious law is primarily based on ________.

A) legislative actions
B) judges' court decisions
C) codifications of permissible acts
D) officially established rules governing a faith

Question 9

________ is the foundation of the legal systems in the United Kingdom and its former colonies.

A) Common law
B) Civil law
C) Religious law
D) Bureaucratic law

Question 10

Civil law is primarily based on ________.

A) actions taken by local governments
B) the cumulative wisdom of judges' decisions on individual cases through history
C) a codification of what is and is not permissible
D) the officially established rules governing the faith and practice of a particular religion

Question 11

________ is based on the cumulative wisdom of judges' decisions on individual cases through history.

A) Common law
B) Civil law
C) Statutory law
D) Bureaucratic law

Question 12

Statutory law is primarily based on ________.

A) legislative actions
B) historic precedents
C) moral judgments
D) religious beliefs

Question 13

A legal system that lacks due process, lacks appeals procedures, and prohibits banks from charging interest on loans is most likely based on ________.

A) common law
B) civil law
C) religious law
D) bureaucratic law

Question 14

The foundation of the legal system in India is ________.

A) common law
B) civil law
C) religious law
D) bureaucratic law

Question 15

Dawson Enterprises, a U.S. firm, conducts business in Saudi Arabia. The MNE recently experienced a business dispute with a local firm and was forced to meet the demands of the local firm without going through due process. Dawson's experience most likely occurred because Saudi Arabia relies on ________.

A) civil law
B) common law
C) religious law
D) bureaucratic law

Question 16

________ is law enacted by legislative action.

A) Common law
B) Civil law
C) Statutory law
D) Bureaucratic law

Question 17

Under which type of legal system can contracts be broken at the whim of those in power?

A) religious law
B) common law
C) bureaucratic law
D) civil law

Question 18

Walton Enterprises, a U.S. firm, has a facility in China. Walton managers in China frequently complain about the arbitrary rules and decisions implemented by Chinese government authorities. Such legal unpredictability suggests that China has a system based on ________ law.

A) civil
B) common
C) theocratic
D) bureaucratic

Question 19

________ is based on a codification of what is and is not permissible.

A) Common law
B) Civil law
C) Statutory law
D) Religious law

Question 20

Common law is primarily based on ________.

A) actions taken by government legislatures
B) the cumulative wisdom of judges' decisions on individual cases through history
C) a codification of what is and is not permissible
D) the officially established rules governing the faith and practice of a particular religion

Question 21

Which of the following is not a sanction?

A) boycotts
B) embargoes
C) high-interest loans
D) removal of preferential tariffs

Question 22

Which of the following best explains why the telecommunications industry has been privatized in many countries?

A) shrinking ability to employ quality workers
B) international regulations regarding social media
C) citizen demands to separate government and business
D) inability of governments to pay for technological upgrades

Question 23

One country in which a lack of the rule of law appears to be affecting FDI is ________.

A) Russia
B) Canada
C) Singapore
D) New Zealand

Question 24

Hawkins Tire is an international chain of discount tire stores. The firm has recently opened a store in Frankfurt, Germany, where there are already a number of local tire stores. Which of the following is the most likely negative effect of Hawkins Tire on Frankfurt?

A) failure of local tire stores
B) higher prices for tires
C) lower tire selection
D) poor tire quality

Question 25

A country that attempts to regulate business activities that are conducted outside its borders is using ________.

A) extraterritoriality
B) embargoes
C) sanctions
D) boycotts

Question 26

The ________ is directed against international firms that traffic in the assets of U.S. companies that were confiscated by the Cuban government in 1959.

A) Bay of Pigs Declaration
B) Anti-Castro Act
C) Helms-Burton Act
D) Freeport McMoRan Doctrine

Question 27

Extraterritoriality refers to ________.

A) the transfer of ownership of resources from the private to the public sector
B) a government's attempt to regulate business activities outside its borders
C) nationalization of a corporation without fair and appropriate compensation
D) restrictions on the ability of a company to return profits to its headquarters

Question 28

Many countries enforced embargoes against ________ during the 1980s to protest its apartheid policies.

A) Cuba
B) South Africa
C) China
D) Afghanistan

Question 29

________ refers to the transfer of ownership of resources from the private to the public sector.

A) Nationalization
B) Expropriation
C) Federalization
D) Conversion

Question 30

Privatization frequently creates opportunities for international businesses because most state-owned entities are ________.

A) untaxed
B) well funded
C) unprofitable
D) well staffed

Question 31

Dual-use products are those that can be used for both ________ and ________ purposes.

A) civilian; military
B) domestic; business
C) wholesale; retail
D) profit; nonprofit

Question 32

Expropriation is best defined as the ________.

A) transference of ownership of resources from private to public sector with no compensation
B) transference of ownership from private to public sector with compensation to private owners for their losses
C) conversion of state-owned property to privately owned property
D) conversion of state-owned property to privately owned property with no compensation

Question 33

The United States restricts all trade with Cuba. This is an example of a(n) ________.

A) boycott
B) tariff
C) embargo
D) ban

Question 34

The ________ provides that a country will honor and enforce within its own territory the judgments and decisions of foreign courts with certain limitations.

A) Helms-Burton Act
B) principle of comity
C) arbitration agreement
D) principle of fairness

Question 35

Randall's Groceries, an international supermarket chain, recently opened a new store in the Taiwanese market. Which of the following will Taiwanese consumers most likely experience?

A) a decrease in the selection of products
B) more mom-and-pop stores
C) higher standards of quality
D) the loss of local jobs

Question 36

Privatization is ________.

A) the transfer of ownership of resources from the public to the private sector
B) a government's regulation of business activities outside its borders
C) nationalization without compensation
D) nationalization with compensation

Question 37

In which industry does Mexico restrict foreign ownership?

A) energy
B) broadcasting
C) transportation
D) telecommunications

Question 38

Laws regarding ________ are the primary reason the manufacturers in Germany and France compete on quality rather than price.

A) embargoes
B) trade limits
C) sanctions
D) extraterritoriality

Question 39

A country restricting access to high-technology goods or withdrawing preferential tariff treatments is using ________.

A) embargoes
B) trade limits
C) sanctions
D) extraterritoriality

Question 40

Of the laws that may form the basis for a country's legal system, which one is considered the riskiest for international businesses?

A) common law
B) religious law
C) bureaucratic law
D) statutory law

Question 41

In which country are monetary awards in legal disputes usually the highest?

A) United States
B) France
C) United Kingdom
D) Canada

Question 42

APO Manufacturing is a U.S. based firm that manufactures electronic equipment. The firm conducts business with a Japanese electronics firm, and a dispute has arisen between the two firms regarding intellectual property rights. APO management plans to use arbitration to resolve the problem. Which of the following best supports this decision?

A) APO's legal department is knowledgeable in global patent laws.
B) APO's legal department expects the principle of comity to apply.
C) APO needs to settle the dispute quickly and inexpensively.
D) APO expects to have record profits during the next year.

Question 43

Common law has evolved differently in each common law country. Thus, laws affecting business practices vary somewhat among these countries, creating potential problems for the uninformed international businessperson.

Question 44

________ is the process by which both parties in a conflict agree to submit their cases to a private individual or body whose decision they will honor.

A) Negotiation
B) Repatriation
C) Arbitration
D) Resolution

Question 45

Statutory laws are those enacted by legislative action.

Question 46

The United States frequently has patent flooding disputes with ________.

A) China
B) Japan
C) Germany
D) Hong Kong

Question 47

The Unites States limits foreigners to ________ ownership of U.S. television and radio stations.

A) 25 percent
B) 49 percent
C) 67 percent
D) 99 percent

Question 48

________ provides that the actions of foreign governments against U.S. firms are generally beyond the jurisdiction of U.S. courts.

A) Arbitration
B) The Helms-Burton Act
C) The principle of comity
D) The Foreign Sovereign Immunities Act of 1976

Question 49

Canada's legal system is based on bureaucratic law.

Question 50

Forum shopping places U.S. manufacturers at a disadvantage in international markets.

Question 51

The civil law system is based on a detailed listing of what is or is not permissible.

Question 52

When a company seeks to have a dispute heard in the court system most favorable to its own interests, the company is ________.

A) forum shopping
B) adopting the principle of comity
C) rejecting the principle of comity
D) engaging in arbitration

Question 53

Britain's legal system is based on religious law.

Question 54

Which of the following is not one of the conditions required for the principle of comity to apply?

A) Reciprocity is extended between the countries.
B) The defendant is given improper notice.
C) The foreign court judgment violates domestic statutes or treaty obligations.
D) The foreign court has less stringent punitive damages for corporations.

Question 55

What was the key to the transition from communism to capitalism for Hungary and Poland?

A) technology transfer from FDI
B) investment in infrastructure
C) the adoption of the euro
D) low-cost labor forces

Question 56

The IT department at World Airlines has recently improved the airlines' Website to help facilitate transactions. Now, when repeat customers log on to the Website, their seating preferences and billing addresses are automatically accessed. For World Airlines customers located in the European Union, the company will most likely have to ________.

A) obtain customer permission before using cookies
B) register the domain name of all clients
C) block all pop-ups on the Website
D) provide a secure Web portal

Question 57

The United States uses a legal system based on common law.

Question 58

Which of the following questions is most relevant when resolving an international business dispute?

A) Which country's law applies?
B) Is the defendant financially solvent?
C) How long should litigation occur?
D) Where does the plaintiff prefer to file the dispute?

Question 59

The Koran is the foundation for religious law in Iran.

Question 60

Bureaucratic law is common in dictatorships.

Question 61

Under civil law, judges take on many tasks that lawyers would handle under common law.

Question 62

Under Margaret Thatcher, the United Kingdom implemented a policy of privatization.

Question 63

Countries that attempt to regulate business activities conducted outside their borders are practicing expropriation.

Question 64

Bureaucratic law is preferred by companies because it never varies, laws are laws.

Question 65

The United States has enforced an embargo against Cuba since the early 1960s.

Question 66

Religious law is common in countries that are heavily populated by Muslims, such as Iran and Pakistan.

Question 67

What are cybersquatters? How do firms resolve problems with cybersquatters?

Question 68

What are dual-use products? Why are the sales of these products monitored?

Question 69

Foreign companies doing business in Saudi Arabia must be cautious because of the country's lack of an independent judiciary to protect the foreign company's rights.

Question 70

Explain the meaning of extraterritoriality.

Question 71

An embargo is a type of comprehensive sanction.

Question 72

Under the Helms-Burton Act, the United States can take legal action against corporations that buy assets from Cuba if those assets were previously taken from U.S. owners.

Question 73

What is the difference between a common law system and a civil law system?

Question 74

Civil law is found primarily among the former colonies of the United Kingdom.

Question 75

Industries that are most vulnerable to nationalization are those that lack mobility, such as mining and oil refining.

Question 76

The Helms-Burton Act is among the most controversial applications of extraterritoriality affecting international business today.

Question 77

What are some reasons that one country might impose sanctions on another country? Illustrate your answer with an example.

Question 78

Sophisticated machine tools that can be used to build both civilian aircraft and ballistic and cruise missiles are an example of a dual-use product.

Question 79

When the British government sold its interests in British Airways to an outside investor, the government was practicing privatization.

Question 80

Why do manufacturers in France, Germany, and Belgium tend to stress their product's quality over price?