Deck 4: The Political and Legal Environment

Question 1

The political system of a country is made up of political parties and government agencies.

Answer 1

False

Question 2

The legal system helps a country maintain its peace and order.

Answer 2

True

Question 3

Stable political systems result in stable governments.

Answer 3

True

Question 4

Democracy is a political system in which the society is ruled by a few individuals.

Question 5

A country's political policies are established through a continuous interaction of people, philosophies and institutions.

Question 6

Political ideology is a set of ideas, and goals that constitute a sociopolitical program.

Question 7

Democracy implies that it is the rule of the people, by the people, for the people.

Question 8

Under democracy, people are not allowed to complain against police brutality.

Question 9

Communism proposes to allow citizens to own property and manage them in the best possible way they can.

Question 10

A government is considered stable if it is able to maintain power and sustain uniform rules and regulations.

Question 11

Terrorism consists of strikes by workers that cause undue delays in production of goods and services.

Question 12

Low literacy levels are one of the main causes of corruption.

Question 13

Legal codes are the basis of civil law.

Question 14

Theocratic law is based on traditions and precedents.

Question 15

A country's legal system affects many aspects of businesses, including ownership and currency controls.

Question 16

The most common types of taxes levied by countries are educational tax, export tax, and remittance tax.

Question 17

Tax treaties are agreements between governments that agree to share information about taxpayers and to avoid double taxation.

Question 18

Tax incentives are bonuses given to tax collectors to expedite the tax collection process.

Question 19

Countries enact labor laws to protect workers' rights.

Question 20

Expatriates are foreign workers employed by the government to gather information on foreign companies.

Question 21

Political systems are a set of institutions that

A) Set standards
B) Establish policies
C) Govern a society
D) All of the above

Question 22

The political system of a country integrates the society into

A) A viable functioning unit
B) Different social classes
C) Forming one single government
D) All of the above

Question 23

The three basic and commonly found political systems are

A) Presidential, parliamentary, and federalist
B) Congressional, senatorial, and judicial
C) Democracy, one-party state, and theocracy
D) Federal, state, and local

Question 24

Democracy is a political system in which

A) Democrats always win
B) Republicans always win
C) Independents always win
D) Elections by a country's citizens form the basis for the formation of a government.

Question 25

Direct democracy implies that

A) Government officials are elected by the people
B) Government is formed by popular vote
C) Primaries lead to election of the president of a country
D) The parliament elects the government officials

Question 26

Countries with one-party states are

A) Kuwait, Saudi Arabia, and United Arab Emirates
B) France, Germany, and Italy
C) China, Cuba, and North Korea
D) Denmark, Norway, and Sweden

Question 27

Theocracy is a form of government in which

A) Socialistic principles are followed
B) Religion plays a key role
C) Democratic principles are followed
D) President of the country plays a key role

Question 28

A models to analyze international companies' relationship with host governments is

A) Sovereignty at bay model
B) Keynesian economic model
C) Political Risk Services model
D) Corruption perception index model

Question 29

Political ideology is

A) Set of ideas
B) Set of theories
C) A sociopolitical program
D) All of the above

Question 30

The difference between capitalism and socialism is in

A) How each system elects its officials?
B) Who controls the production and distribution of goods and services?
C) Whether the country is industrialized or still developing
D) Whether it is a presidential or parliamentary system?

Question 31

The rights of people under democracy are

A) Freedom of expression and opinion
B) People elect the government
C) The judiciary is independent of the other branches of the government
D) All of the above

Question 32

Communism proposes

A) Classless society
B) Equal power to the president and the legislature
C) Freedom of the press
D) Private ownership of property

Question 33

The United Nations defines corruption as

A) The exorbitant profits made by private sector companies
B) The excessive privileges of the wealthy
C) The unilateral powers of some of the dictators ruling the poorer countries of Africa
D) The commission or omission of an act in the performance of one's duties in response to gifts, promises, or incentives.

Question 34

The key concern for international executives in dealing with political uncertainty is

A) Loss of image and pride
B) Loss of assets
C) Loss of entry into the country
D) Loss of diplomatic privileges

Question 35

One approach to deal with political risk is

A) Bribing the political leaders
B) Offering free education to the members of the family in control of the country
C) Identifying the specific political actions facing the company, analyzing the issues, and then formulating a viable strategy based on company's goals and resources.
D) Do nothing

Question 36

The three major legal structures are

A) Lower court, Appeals court, and the Supreme Court
B) The defense, the prosecution, and the judge
C) Civil law, common law, and the theocratic law
D) The American law, the English law, and the German law

Question 37

The legal systems practiced in some of the African countries are based on

A) Application of law to the given facts
B) Interpretations of preset codes by the elders of the tribe
C) What is acceptable within the religious precepts?
D) Traditions and long-standing cultural influences

Question 38

Disputes between international companies and host governments is difficult to resolve because

A) They speak different languages
B) There is no single body of codes or laws that applies across all countries
C) They have different forms of government
D) They come from different cultures

Question 39

The International Court of Justice is established to settle

A) Corruption cases
B) Product liability cases
C) Disputes between countries
D) Differences between competing companies

Question 40

Currency controls are established by countries

A) To control excessive outflow of foreign currencies
B) To manage inflation
C) To manage interest rates
D) To manage economic growth

Question 41

What is the purpose of a political system?

Question 42

Define political system.

Question 43

What are the key influencers of a country's political environment?

Question 44

Identify and explain the three major judicial systems.