Deck 5: Political and Legal Environment

Question 1

The government in each country determines which industries will receive:

A)protection in the country and which will face open competition.
B)benefits.
C)penalties.
D)monopolies.
E)special protection from the armed services.

Answer 1

A

Question 2

When marketing executives do business across national boundaries,where do they primarily face regulations and laws?

A)at home.
B)in the foreign country.
C)both at home and in the foreign country.
D)at the World Court in the Hague.
E)at the United Nations (which controls the oversight of international business).

Answer 2

C

Question 3

__________________ refers to an economic system in which free enterprise is permitted and encouraged along with private ownership.

A)Socialism
B)Communism
C)Fascism
D)Capitalism
E)Planned economics

Answer 3

D

Question 4

______________ Institutional Revolutionary Party had controlled the country for 70 years.

A)Italy's
B)Great Britain's
C)India's
D)Ireland's
E)Mexico's

Question 5

What type of political events are executives most concerned with in host countries?

A)major political upheavals.
B)day-to-day low-key events that produce a fairly significant change in policy.
C)property seizures.
D)terrorist strikes.
E)labor strikes.

Question 6

Governments often decide to block trade.All of the following are reasons EXCEPT:

A)national security.
B)to protect the stock market.
C)to develop new industry.
D)to protect declining industries.
E)none of the above.

Question 7

A(n)____________________ country refers to a country in which foreign companies are allowed to do business in accordance with its government policies and within its
Laws.

A)foreign trade zone
B)domestic
C)origin
D)home
E)host

Question 8

International marketers cannot afford to be __________________ as they interact with a multitude of political and legal systems,including their own at home.

A)geocentric
B)ethnocentric
C)polycentric
D)multicentric
E)none of the above

Question 9

One way to characterize the nature of a government is by its __________________.

A)political ideology
B)ethnic ideology
B)regional ideology
C)business ideology
D)social ideology

Question 10

Lack of political stability and continuity is usually a characteristic of which of the following systems?

A)single party
B)dual party
C)multiple party
D)bi-cameral system
E)communist

Question 11

An example of the dual-party system in operation is found in:

A)Mexico
B)Britain
C)India
D)Pakistan
E)Japan

Question 12

In the United States,ITA stands for:

A)International Training Administration.
B)International Testing Administration.
C)International Teaching Administration.
D)International Tourism Administration.
E)International Trade Administration.

Question 13

________________ is generally considered to be a system that falls in the middle between largely independent systems and controlled economic systems.

A)Socialism
B)Communism
C)Neo-fascism
D)Capitalism
E)Monarchies

Question 14

MITI stands for:

A)Ministry of International Travel & Industry.
B)Ministry of International Trade & Industry.
C)Ministry of International Tourism & Industry.
D)Ministry of International Testing & Industry.
E)Ministry of International Telegraph & Industry.

Question 15

In the United States,the __________________________ has a national network of district offices in every state,offering export promotion assistance to local businesses.

A)Ministry of International Trade and Industry (MITI)
B)EXIM Bank
C)National Industrial Council (NIC)
D)International Trade Administration (ITA)
E)United Nations,Division of Commerce

Question 16

As China continues to free its markets in response to global pressure,the _________________ is (are)undermining its censorship policies.

A)travel policies
B)Internet
C)education policies
D)manufacturing locations
E)outsourcing policies

Question 17

A(n)_____________ country refers to a country the parent company is based in and operates from.

A)origin
B)domestic
C)host
D)home
E)plural

Question 18

_______________ if unfettered,may result in excessive production and excessive consumption,thereby causing social problems of great magnitude.

A)Socialism
B)Communism
C)Protected economies
D)Monopolies
E)Capitalism

Question 19

The three main political ideologies are:

A)Communism,capitalism and globalism
B)Communism,capitalism and radicalism
C)Communism,capitalism and modernism
D)Communism,capitalism and Confucianism
E)Communism,capitalism and socialism

Question 20

A major objective of any state government wishing to support businesses that will be exporting or relocating to the United States (specifically,within their
State)is:

A)job creation.
B)increasing the defense industry in their state.
C)gaining control of multinational corporations.
D)accumulating wealth.
E)opening more hotels/motels.

Question 21

Which of the following countries has very few restrictions on foreign ownership of corporations within its borders (domestic businesses)?

A)United States.
B)Russia.
C)Japan.
D)China.
E)Saudi Arabia.

Question 22

The United States government accounts for ____________ of the total U.S. consumption.

A)a tenth
B)a third
C)a quarter
D)nearly sixty percent
E)nearly seventy percent

Question 23

Weapons that might be used as economic trade controls to protect locally produced goods against imports would be:

A)embargoes.
B)sanctions.
C)asset freezes.
D)tariffs and nontariff barriers.
E)confiscation.

Question 24

Embargoes and sanctions are ______________________ political trade controls.

A)locally-based
B)regionally-based
C)country-based
D)company-based
E)party-based

Question 25

__________________ refers to a foreign government's takeover of company assets such as land and goods with compensation that tend to fall short of their market value.

A)Expropriation
B)Confiscation
C)Domestication
D)Nationalization
E)non of the above

Question 26

In Europe,Airbus Industries was established with joint government subsidies from the governments of __________________________________________________.

A)Britain,France,Germany,and Spain
B)Britain,France,Germany,and Sweden
C)Britain,France,Norway,and Spain
D)Britain,Finland,Germany,and Spain
E)Iceland,France,Germany,and Spain

Question 27

An example of an economic trade control would be a trade restraint instituted to:

A)protect local jobs.
B)embargo goods.
C)sanction trading in certain goods.
D)refrain from trading with communist Cuba.
E)freeze the assets of Iraq.

Question 28

__________________ is an outright takeover of assets without compensation.

A)Expropriation
B)Confiscation
C)Domestication
D)Nationalization
E)None of the above

Question 29

Trade controls can be broken into two categories---economic trade controls and:

A)covert trade controls.
B)political trade controls.
C)geophysical trade controls.
D)maritime trade controls.
E)most favored nation trade controls.

Question 30

______________________ are country-based political trade controls.

A)Embargoes and sanctions
B)Nontariff barriers
C)Taxing imports
D)Taxing exports
E)Tariffs

Question 31

To reduce the risk of expropriation or confiscation of company assets overseas,many companies use __________________ with local companies.

A)joint ventures
B)strategic alliances
C)contract manufacturing
D)licensing
E)none of the above

Question 32

__________________ refers to a foreign government's takeover for the purpose of making the industry a government-run industry.

A)Expropriation
B)Confiscation
C)Domestication
D)Nationalization
E)None of the above

Question 33

The United States maintains an economic embargo on __________________.

A)Nicaragua
B)Mongolia
C)Hungary
D)Cuba
E)none of the above.

Question 34

Trade laws that harm other countries are likely to invoke _______________.

A)war
B)retaliation
C)domestication attempts
D)covert action
E)United Nations sanction

Question 35

Profit remittances and differential taxation and interest rates are illustrations of which of the following types of control?

A)ownership control
B)incentive control
C)industry control
D)financial control
E)political control

Question 36

All of the following are considered forms of nontariff barriers EXCEPT:

A)government participation in trade.
B)customs and entry procedures.
C)product requirements.
D)countervailing duties.
E)quotas.

Question 37

An example of a product-based trade control would be the:

A)quota.
B)countervailing duty.
C)export license requirement.
D)ownership control.
E)asset freezing.

Question 38

An example of a direct government subsidy by the United States to meet foreign competition would be:

A)Microsoft.
B)COMECON.
C)The Tennessee Valley Authority.
D)BART in California.
E)SEMATECH (Semiconductor Manufacturing Technology).

Question 39

The ultimate government involvement in trade is when the government:

A)gives tax breaks to businesses.
B)itself is the customer.
C)prevents competition.
D)controls the foreign competition with tariffs.
E)allows domestic businesses to bribe in foreign countries so they can remain competitive.

Question 40

According to the textbook,government policies drive the following economic factors EXCEPT:

A)the cost of capital.
B)level of economic growth.
C)companies' outsourcing strategies.
D)rates of inflation.
E)international exchange rates.

Question 41

_________________________ provides the U.S.President a free hand and the power to negotiate trade deals with other governments.

A)Fast-track reciprocal authority
B)Fast-track senate authority
C)Fast-track business authority
D)Fast-track trade authority
E)Slow-track trade authority

Question 42

Recently the Russian subsidiary of PepsiCo needed to import bottling equipment from the United States.However,the Russian government did not allow the
Company to exchange rubles for dollars,so it exported Russian vodka to the
United States to earn enough dollars to import the needed equipment.This would be
An example of _____________________.

A)retaliation.
B)countertrade.
C)sanction.
D)domestication.
E)profit sharing.

Question 43

International law comes from customs,national and international court decisions, and:

A)tradition.
B)joint ventures.
C)strategic alliances.
D)cabals.
E)international treaties.

Question 44

Legal issues facing a company affect:

A)pricing decisions.
B)packaging decisions.
C)product decisions.
D)all of the above.
E)none of the above.

Question 45

Another name for domestication is _______________________.

A)repatriation policy
B)phase-out policy
C)phase-in policy
D)upward-bound policy
E)equity policy

Question 46

According to the PRS Group's 2005 International Country Risk Rating,which of the following countries has the HIGHEST risk rating?

A)Norway
B)Switzerland
C)Singapore
D)Finland
E)Iraq

Question 47

The Middle East crisis and the September 11 terrorist attacks on the United States have caused tremendous concern about the future ____________________?

A)aluminum supply
B)oil supply
C)copper supply
D)food supply
E)none of the above

Question 48

________________ systems base the interpretation of law on prior court rulings (that is,legal precedents and customs of time).

A)Common law
B)Code law
C)Written law
D)Islamic law
E)Napoleonic law

Question 49

A country that follows common law as its primary system is:

A)France.
B)the United States.
C)Iraq.
D)Egypt.
E)Mexico.

Question 50

All of the following are members of the G-7 (Group of Seven)EXCEPT:

A)Canada
B)Ireland
C)Germany
D)United States
E)Italy

Question 51

To overcome the problems of expropriation,confiscation,and even nationalization, many companies are now adopting a policy of ___________________ where the
Company gradually turns over management and operational responsibilities as well as
Ownership to local companies over time.

A)retaliation
B)boycott
C)sanction
D)domestication
E)profit sharing

Question 52

__________________ involve(s)trading of products without involving direct monetary payments.

A)Joint ventures
B)Strategic alliances
C)Contract manufacturing
D)Countertrade
E)Outsourcing

Question 53

According to the PRS Group's 2005 International Country Risk Ratings,which of the following country has the LOWEST risk rating?

A)Norway
B)Switzerland
C)Singapore
D)Finland
E)Somalia

Question 54

International law represents __________________ among countries.

A)very loose arrangements
B)contractually binding agreements
C)gentlemen's agreements
D)almost no control of law
E)the best and most recognized legal standards

Question 55

G-7 began during the economic crisis of the mid-____________.

A)1950s.
B)1960s.
C)1970s.
D)1980s.
E)1990s.

Question 56

The International Court of Justice was established by the ____________________ to settle international conflicts between nations,not between individual parties and
Companies.

A)United Nations
B)Asian Development Bank
C)International Labor Organization
D)International Monetary Fund
E)World Bank

Question 57

_________________ was founded in 1949 to stop the flow of Western technology to the Soviet Union.Australia,Japan,and the NATO countries (except Ireland)are
Members.

A)The NATO alliance
B)The Western bloc
C)The Eastern bloc
D)The G-7 (Group of Seven)
E)COCOM (The Coordinating Committee for Multilateral Controls)

Question 58

_____________________ may be defined as that body of rules or laws that is binding on states and other international persons in their mutual relations.

A)Legal systems
B)International law (or the "law of nations")
C)Local law
D)Napoleonic code law
E)Civil law

Question 59

The group consisting of the original G-7 and _________________ is known as G-8.

A)Singapore
B)Ireland
C)Russia
D)China
E)New Zealand

Question 60

____________________ laws primarily govern behavior within a country and also govern the resolution of international contractual disputes since foreign
Subsidiaries and expatriate employees live within the legal bounds of their host
Countries' legal systems.

A)Global
B)Transnational
C)Multinational
D)Local and municipal
E)Bi-national

Question 61

A _______________ country is a country in which foreign companies are allowed
to do business in accordance with its government's policies and its laws.

Question 62

The ____________________ is the oldest and most comprehensive international copyright treaty.

A)Berne Convention.
B)London Convention.
C)Paris Convention.
D)New York Convention.
E)Rome Convention.

Question 63

______________________ refers to ideas that are translated into tangible products, writings,and so on,and that are protected by the state for a limited period of time
From unauthorized commercial exploitation.

A)A copyright
B)A trademark
C)A trade secret
D)Intellectual property
E)A patent

Question 64

Civil laws regulating business contracts and transactions are usually called:

A)business law.
B)code law.
C)confederation law.
D)commercial law.
E)contract law.

Question 65

The international treaty (convention)established in 1883 that explains international protection rights of intellectual property (such as how long one has to file for
Property protection in foreign countries)is called:

A)the Berne Convention.
B)the London Convention.
C)the Paris Convention.
D)the New York Convention.
E)the Rome Convention.

Question 66

The _______________ strengthened the U.S.antitrust arsenal by prohibiting trade practices that were not covered in previous legislation.It outlawed exclusive
Dealing and price discrimination.

A)Sherman Act
B)Clayton Act
C)Federal Trade Commission Act
D)Foreign Corrupt Practices Act
E)Export Trading Company Act

Question 67

The ____________________ antitrust laws are applied not only to _______________ -member country companies but also to foreign companies as long as their corporate
Action has antitrust implications within the _____________.

A)MERCOSUR.
B)European Union (EU).
C)European Free Trade Association (EFTA).
D)NAFTA
E)None of the above.

Question 68

Which of the following countries follows the rule of "first-to-invent" with respect to patent awards?

A)United States
B)Japan
C)Britain
D)Germany
E)Canada

Question 69

The legal system that holds that law was established by God and a "natural law" embodies all justice is represented by:

A)Common law.
B)Code (written)law.
C)Islamic law.
D)Germanic Confederation law.
E)Napoleonic law.

Question 70

_________________ systems rely on statutes and codes for the interpretation of the law.There is very little interpretation in this form of law.

A)Common law
B)Code (written)law
C)United Nation's law
D)Germanic Confederation law
E)Spanish Constitutional law

Question 71

A host country refers to a country the parent company is based in and
operates from.

Question 72

The ___________________________________ of 1977 was designed to prohibit the payment of any money or anything of value to foreign officials,foreign political
Parties,or any candidate for foreign political office for purposes of obtaining,
Retaining,or directing business.

A)Foreign Illegal Practices Act
B)Foreign Corruption Issues Act
C)Foreign Corruption Law Act
D)Foreign Bribery Practices Act
E)Foreign Corrupt Practices Act

Question 73

The ____________________ (based in Geneva,Switzerland)has instituted a set of process standards that has been subscribed to by the European Union.

A)International Standards Organization
B)International Production Standards Organization
C)Quality Council
D)Demming Committee
E)Baldridge Foundation

Question 74

The ____________________ was designed to prohibit the payment of any money or anything of value to foreign officials,foreign political parties,or any candidate for
Foreign political office for purposes of obtaining,retaining,or directing business.

A)Sherman Act
B)Clayton Act
C)Federal Trade Commission Act
D)Foreign Corrupt Practices Act
E)Export Trading Company Act

Question 75

Under strict socialism,the government owns and manages all businesses and no
private ownership is allowed.

Question 76

The _____________________ specifically forbade every contract,combination,or conspiracy to restrain free and open trade.

A)Sherman Act
B)Clayton Act
C)Federal Trade Commission Act
D)Foreign Corrupt Practices Act
E)Export Trading Company Act

Question 77

The __________________ encourages firms to join forces to improve their export performance by exempting them from antitrust laws.This act was patterned
After similar legislation in Japan and Germany.

A)Sherman Act
B)Clayton Act
C)Federal Trade Commission Act
D)Foreign Corrupt Practices Act
E)Export Trading Company Act

Question 78

The ISO 9000 standards served as a model for the _____________ series.

A)ISO 10000
B)ISO 11000
C)ISO 12000
D)ISO 14000
E)ISO 15000

Question 79

All of the following countries believe that most disputes can be solved outside the litigation system EXCEPT:

A)Brazil.
B)Japan.
C)China.
D)United States.
E)Taiwan.

Question 80

With the growing adoption of the __________ standards by firms worldwide,an __________ certification has become an essential marketing tool for firms.

A)ISO 6000
B)ISO 7000
C)ISO 8000
D)ISO 9000
E)ISO 10000