Deck 3: Politics, Law, and Business Ethics

Question 1

Pluralism is the belief that only individuals and private groups should control a nation's political activities.

Answer 1

False

Question 2

A political system can be characterized by who participates in it and to what extent they participate.

Answer 2

True

Question 3

When a country's religious leaders are also its political leaders, its political system is called a theocracy.

Answer 3

True

Question 4

In a totalitarian system, individuals govern without the support of the people, tightly control people's lives, and do not tolerate opposing viewpoints.

Question 5

A country's political system derives from the history and culture of its people.

Question 6

Totalitarian regimes require the near-total centralization of political power.

Question 7

A totalitarian system is marked by narrow participation.

Question 8

Wide participation in a political system occurs when people who are capable of influencing the political system make an effort to do so.

Question 9

Internet companies can avoid adapting to local politics and laws.

Question 10

Communists are socialists, but socialists are not necessarily communists.

Question 11

A political system that is under the control of totalitarian religious leaders is called secular totalitarianism.

Question 12

Totalitarian leaders attempt to silence those with opposing political views.

Question 13

Totalitarian political systems include authoritarian regimes such as communism and fascism.

Question 14

As a U.S. company, Yahoo! needs only to comply with U.S. law despite the fact that it reaches markets across the world.

Question 15

A "pure" form of totalitarianism is entirely possible.

Question 16

Secular totalitarianism takes three forms: communist, capitalist, and left-wing.

Question 17

Totalitarian governments tend to share three features: imposed authority, constitutional guarantees for citizens, and total participation.

Question 18

Understanding the nature of politics and laws in other nations increases the risks of conducting international business.

Question 19

Anarchism is the belief that every aspect of people's lives must be controlled in order for a nation's political system to be effective.

Question 20

A political system includes the structures, processes, and activities by which a nation governs itself.

Question 21

The likelihood that a society will undergo political changes that negatively affect local business activity is called tribal totalitarianism.

Question 22

Conflict among races, religions, and ethnic groups is a source of political risk.

Question 23

China's political system is currently a mix of communist and right-wing totalitarianism.

Question 24

Pure democracy is a relatively new concept that arose following the breakup of Eastern Europe.

Question 25

A democracy is a political system in which government leaders are elected directly by the wide participation of the people or their representatives.

Question 26

A participative democracy combined with free markets and property rights guarantees strong economic growth.

Question 27

The "four tigers" of Asia Hong Kong, Singapore, South Korea, and Taiwan built strong market economies in the absence of truly democratic practices.

Question 28

In every country, the rate of economic growth is primarily determined by its political and civil liberties.

Question 29

Bureaucracy is the part of the government that implements the rules and laws passed by elected representatives.

Question 30

For practical reasons, most nations have resorted to "pure" democracy in which citizens elect individuals from their groups to represent their political needs and views.

Question 31

Macro political risk threatens companies within a particular industry or even smaller groups.

Question 32

Civil rights include freedom of speech, freedom to organize political parties, and the right to a fair trial.

Question 33

Most democracies have resorted to "representative" democracies in which citizens elect individuals from their groups to represent their political needs and views.

Question 34

In politicized bureaucracies, bureaucrats tend to implement decisions according to their own political views rather than those of the people's representatives.

Question 35

Freedom of expression ideally grants the right to voice opinions freely and without fear of punishment.

Question 36

Because a country's business environment is independent of its political environment, a nation's business environment remains stable when it is in the midst of political change.

Question 37

Socialism is an economic system in which the government owns and controls all types of economic activity without a Communist Party.

Question 38

In reality, there is very little difference between a pure democracy and a representative democracy.

Question 39

A democracy guarantees high rates of economic growth and totalitarianism dooms a nation to slow economic growth.

Question 40

Democracies maintain stable business environments primarily through laws protecting individual property rights.

Question 41

Civil law can be more adversarial than common law because civil law relies more on the need to interpret laws according to tradition, precedent, and usage.

Question 42

Localization entails modifying operations, the product mix, or some other business element to suit local tastes and culture.

Question 43

Latin American countries have some of the world's lowest kidnapping rates.

Question 44

Totalitarian governments tend to favor public ownership of economic resources, whereas democracies tend to encourage entrepreneurial activity and protect small businesses with strong property-rights laws.

Question 45

Under common law, the justice system decides cases by interpreting the law on the basis of tradition, precedent, and usage.

Question 46

One common government policy tool restricts ownership to only domestic companies or limits ownership by nondomestic firms to a minority stake.

Question 47

Lobbying is the policy of hiring people to represent a company's views on political matters.

Question 48

A nation's legal system is influenced by a wide variety of variables except cultural variables such as class and religion.

Question 49

Local content requirements are one form of political risk.

Question 50

Nationalism typically involves intense national loyalty and cultural pride, but is rarely associated with drives toward national independence.

Question 51

Asset seizures fall into three categories: confiscation, expropriation, and nationalization.

Question 52

Conflict can arise from a people's resentment toward their government or from territorial disputes between countries.

Question 53

No government agency insures internationally active U.S. companies against the effects of political risk.

Question 54

When a firm contributes money for building schools and hospitals in a country or a region, it is using the development assistance strategy to adapt to and incorporate risk.

Question 55

While bribery is a serious crime in some countries, it is an expected way of doing business in other countries.

Question 56

Terrorism always has silent approval from the local population.

Question 57

A theocratic law system is based on a detailed set of written rules and statutes that constitute a legal code.

Question 58

Expropriation involves the forced transfer of assets from a company to the government without compensation.

Question 59

Experts agree that the best investment a company can make against kidnapping is to buy kidnap, ransom, and extortion insurance.

Question 60

Nationalization is more common than confiscation and expropriation.

Question 61

Which of the following includes the structures, processes, and activities by which a nation governs itself?

A) Political system
B) Legal system
C) Cultural system
D) Judicial system

Question 62

Political relations among countries tend to have little impact on international business.

Question 63

Laws designed to prevent companies from fixing prices, sharing markets, and gaining unfair monopoly advantages are called antitrust (antimonopoly) laws.

Question 64

Trademark protection typically lasts indefinitely, provided the word or symbol continues to be distinctive.

Question 65

Pure Internet companies ________.

A) can avoid local laws and politics since they do not have a physical presence in other countries
B) must adapt to local politics and law
C) are exempt from most local regulations because of their unique intangible nature
D) should act according to their own corporate culture, not the local environment

Question 66

The 20-year term granted for patents by the World Trade Organizations begins when a patent is finally granted, not when its application is filed with a country's patent office.

Question 67

Hindu law is the most widely practiced theocratic legal system today.

Question 68

A value-added tax is a tax levied on each party that adds value to a product throughout its production and distribution.

Question 69

Product liability laws hold only manufacturers, and not company officers, responsible for damage, injury, or death cased by defective products.

Question 70

Ethical dilemmas are similar to legal questions in that there are clear-cut right and wrong behaviors in every international business situation.

Question 71

________ occurs when people who are capable of influencing the political system make an effort to do so.

A) Narrow participation
B) Wide participation
C) Normal participation
D) Ordinary participation

Question 72

No legal system can anticipate nor address every conceivable situation in which a person or firm may find themselves.

Question 73

Which of the following influence a country's political system?

A) Current population
B) Age and race composition
C) Per capita income
D) All of the above

Question 74

In ________, citizens vote directly on many national issues.

A) Switzerland
B) Canada
C) Austria
D) Norway

Question 75

The Swiss system of public referendums works because ________.

A) of extensive training provided to Swiss citizens
B) Switzerland consists of a relatively small population in a small geographic area
C) Swiss culture has little trust in representative democracy
D) politicians generally rig the results prior to the referendum

Question 76

Treaties concluded among several nations are called multilateral agreements.

Question 77

Copyrights are protected under the Geneva Convention and the 2004 Universal Copyright Convention.

Question 78

The United Nations does not concern itself with issues such as international trade and economic development.

Question 79

Intellectual property can be broadly classified as either industrial property or copyrights.

Question 80

In a legal sense, standardization refers to uniformity in interpreting and applying laws in more than one country, not to the standardizing of entire legal systems.