Deck 3: Political System

Question 1

Shankland, a country in South America, has a political orientation that focuses on improving the welfare of all members of society. The government believes that people should prioritize the good of society above the advancement of the individual. Given this information, it can be said that Shankland has a(n) _____ political orientation.

A) anarchist
B) individualist
C) collectivist
D) fascist

Answer 1

C

Question 2

Giomeria, a country in Eastern Europe, has a culture that values individualism. Every citizen of the country has the right to vote on almost every political issue in the country. Given this information, it can be said that Giomeria is a(n) _____.

A) autocracy
B) monarchy
C) democracy
D) anarchy

Answer 2

C

Question 3

Belsik is a country in South Asia with a government that allocates goods and services to workers according to their needs. The workers in the country have collective ownership of the factors of production. The government uses revolutionary means to establish society. Given this information, it can be said that Belsik is a(n) _____ state.

A) theocratic
B) anarchic
C) communist
D) socialist

Answer 3

C

Question 4

NAD is a political group with extreme religious views. It is on the U.S. Department of State's watch list. It is notorious for its acts of violence. It has been involved in suicide bombings and public executions in various places around the world. Given this information, it can be said that NAD is a(n) _____.

A) anarchic organization
B) theocratic group
C) atheist group
D) terrorist organization

Question 5

Nibellia is a country in South America in which the government regulates every aspect of public and private life. The government maintains complete control over military, law, media, social organizations, education, religion, and the economy. It often uses a combination of terror tactics and propaganda to control the ways people think and feel. Given this information, it can be said that Nibellia is a(n) _____ state.

A) republic
B) anarchic
C) totalitarian
D) democratic

Question 6

Tigeria, a country in East Africa, has an authoritarian government. Given this information, it can be said that:

A) workers in Tigeria have the collective ownership of the factors of production and goods and services are allocated to them according to their needs.
B) power is concentrated in the hands of a leader or a small group of leaders in Tigeria who are not constitutionally responsible to citizens for their actions.
C) the government of Tigeria focuses on promoting egalitarianism and regulating opportunistic individual behavior, rather than protecting individual property.
D) the government of Tigeria provides an opportunity to each eligible citizen to influence policy through a direct voting process.

Question 7

In Lithuria, a country in Eastern Europe, personal liberties and rights are highly valued. The citizens of Lithuria have the right to own property and decide how to use the property. In Lithuria, the goals of the citizens and society are often congruent. The government believes that a person pursuing his or her own self-interest most effectively promotes the good of society as well. Given this information, it can be said that Lithuria is governed by _____ philosophy.

A) collectivistic
B) individualistic
C) fascist
D) communalist

Question 8

David belongs to a faction of individualists who believe that individuals should be free from any system of control. This faction believes that individuals should have the right to govern themselves without the need of any system of government. Given this information, it can be said that this faction is most likely a group of _____.

A) anarchists
B) fascists
C) capitalists
D) modernists

Question 9

In Bilghistan, a country in West Asia, Christian doctrines form the basis of the government. It can be said that Bilghistan has a(n) _____ government.

A) anarchic
B) theocratic
C) republic
D) democratic

Question 10

A(n) _____ consists of the principles, laws, and procedures relating to a particular form of government.

A) cultural system
B) economic system
C) social system
D) political system

Question 11

Kolebia is a republican country in South Asia. It is a presidential democracy. It can be said that:

A) Kolebia's constitution outlines the separation of political power into branches, such as executive, judicial, and legislative.
B) Kolebia's parliament or the legislative branch chooses ministers who run the government.
C) Kolebia's citizens elect representatives to public office, and those representatives hold ultimate sovereignty.
D) Kolebia's government focuses on promoting egalitarianism and regulating opportunistic individual behavior.

Question 12

_____ seeks to liberate individuals from any system of control.

A) Monarchy
B) Anarchy
C) Democracy
D) Autocracy

Question 13

Charesiak, a country in North Africa, has a collective form of government in which the community as a whole owns the means of production and the distribution of production. The government uses peaceful means to establish a communal society. Given this information, it can be said that Charesiak is a(n) _____ state.

A) theocratic
B) anarchic
C) communist
D) socialist

Question 14

PIOL is a terrorist organization that has radical political views. It has gained followers worldwide by radicalizing their political outlook through online media. This scenario illustrates the concept of _____.

A) extremism
B) socialism
C) individualism
D) communism

Question 15

Argarzia, a country in West Africa, is a social democracy. It holds democratic elections to determine who should govern. It can be said that:

A) the focus of the government of Argarzia is promoting egalitarianism and regulating opportunistic individual behavior.
B) Argarzia's constitution outlines the separation of political power into branches, such as executive, judicial, and legislative.
C) the president of Argarzia is elected directly in a presidential vote.
D) Argarzia's citizens elect representatives to public office, and those representatives hold ultimate sovereignty.

Question 16

The government of Kuseria, a country in West Asia, has formulated a set of principles, ideas, and doctrines to establish and control social order in the country. Given this information, it can be said that the government of Kuseria has created a(n) _____.

A) political ideology
B) cultural ideology
C) economic ideology
D) nationalist ideology

Question 17

Identify a true statement about political systems.

A) They influence the economic, sociocultural, and technological climate in a given country.
B) They include the principles, laws, and procedures relating to a particular industry.
C) They do not influence the opportunities available to international businesses.
D) They are solely shaped by the political ideologies that support the system.

Question 18

Which of the following is true of political systems?

A) They include the principles, laws, and procedures relating to a particular industry.
B) They are solely shaped by the political ideologies that support the system.
C) They directly affect the opportunities available to international businesses.
D) They are independent of the cultural and religious values of a country.

Question 19

In contrast to anarchists, individualists believe that:

A) individuals should strive to liberate themselves from any system of control.
B) all government or organization of society should exist only on a voluntary basis.
C) the goals of individuals and society are often unaligned.
D) a person pursuing his or her own self-interest most effectively promotes the good of society as well.

Question 20

Like presidential democracies, in parliamentary democracies, _____.

A) executive officers are elected through a common vote
B) the focus of government is promoting egalitarianism
C) the legislative branch chooses ministers who run the government
D) a constitution outlines the separation of political power into branches

Question 21

The government of Omeria, a country in West Asia, has imposed restrictions on the volume of aluminum scrap that can be exported out of the country. This scenario is an example of _____.

A) extremism
B) trade control
C) currency control
D) deregulation

Question 22

The government of Chiresia, a country in South America, maintains a fixed exchange rate. This scenario is an example of _____.

A) extremism
B) trade control
C) currency control
D) deregulation

Question 23

In Tenatia, a country in Eastern Europe, companies and people can own land and equipment. They have the liberty to decide how to utilize these resources and reap the returns or losses of business activities. Given this information, it can be said that the companies and the people in Tenatia have _____.

A) political rights
B) suffrage rights
C) property rights
D) riparian rights

Question 24

The government of Hillsank, a country in South America, transferred the ownership of the mining industry to the nongovernment sector, renouncing its own control. This is an example of _____.

A) commodification
B) subsidization
C) privatization
D) globalization

Question 25

_____ is a nongovernmental, U.S.-based watchdog and advocacy organization for democracy founded in 1941.

A) Freedom House
B) The Heritage Foundation
C) The Red Cross
D) Orange One

Question 26

A government's seizure of assets as a result of political action is known as _____.

A) expropriation
B) repatriation
C) immigration
D) deportation

Question 27

In comparison to direct effects, the indirect effects of political risk:

A) are the most apparent.
B) are easy to predict and prepare for.
C) result from political actions that target a specific entity.
D) are similar to collateral damage.

Question 28

Carmine Inc. is an American mining company operating in Keharus, a country in Eastern Europe. Recently, the government of Keharus has passed a policy that restricts foreign direct investment. Consequently, the operations of Carmine Inc. is adversely affected. Given this information, it can be said that Carmine Inc. is subjected to _____ in Keharus.

A) reputational risk
B) valuation risk
C) political risk
D) settlement risk

Question 29

Tungsten Inc., an American mining company, carried out mining in Kijeslin, a country in East Africa. However, because of large-scale protests by local environmental groups, the company had to cease its mining activities. In this scenario, Tungsten Inc. faced a _____ in Kijeslin.

A) micro political risk
B) macro political risk
C) reputational risk
D) valuation risk

Question 30

The government of Calgoris, a country in Eastern Europe, has created a legal organization to carry out business activities on behalf of the government with the sole aim to make profits. Given this information, it can be said that the legal organization is a _____.

A) limited liability company
B) state-owned enterprise
C) private corporation
D) sole proprietorship company

Question 31

Argon Inc., an American automobile company, is planning to expand its operations globally. To make an informed decision regarding which countries to enter and which countries to avoid, Argon Inc. should conduct a _____.

A) gap analysis
B) risk analysis
C) portfolio analysis
D) root cause analysis

Question 32

Despite restricted foreign investment in Nikopia, a country in Eastern Europe, Phoenix Inc., an American mining company, wants to operate in Nikopia because of its vast mineral deposits. In such a case, Phoenix Inc. can attempt to prepare for potential problems by:

A) removing the involvement of the government of Nikopia from the mining industry.
B) aligning its operations strategies with trade and economic policies of Nikopia.
C) negotiating some form of contract with Nikopia to establish an avenue of recourse in case something happens to disrupt the company's operations.
D) transferring the ownership of the company to the government of Nikopia and operating as a state-owned enterprise.

Question 33

Despite political unrest in Pusalk, a country in South Asia, Azure Inc., a Spanish footwear company, wants to open a manufacturing plant in Pusalk, because of the availability of cheap labor in the country. Azure Inc. can safeguard its interests in Pusalk by:

A) purchasing risk insurance.
B) deregulating the footwear industry.
C) transferring its ownership to the government of Pusalk.
D) centralizing its operations.

Question 34

Which of the following variables of economic freedom index in the Heritage Foundation determines the extent to which the government of a country may interfere in business processes?

A) Labor freedom
B) Fiscal freedom
C) Investment freedom
D) Trade freedom

Question 35

The government of Azmeria, a country in West Asia, has placed a 55 percent tariff on all imports from Kumeris, a country in East Africa. This move by the government is likely to increase _____ for the firms from Kumeris operating in Azmeria.

A) macro political risk
B) micro political risk
C) reputational risk
D) valuation risk

Question 36

Which of the following variables of economic freedom index in the Heritage Foundation determines the degree of regulatory efficiency in a country?

A) Labor freedom
B) Trade freedom
C) Investment freedom
D) Financial freedom

Question 37

Omeria, a country in West Asia, has an unstable government. Carmine Inc., a Canadian mining company, wants to purchase risk insurance to safeguard its interests while operating in Omeria. Nate, a manager at Carmine Inc., believes that Carmine Inc. should not purchase risk insurance. Which of the following statements supports Nate's beliefs?

A) Risk insurance is usually ineffective in safeguarding the interests of companies in politically at-risk countries.
B) Risk insurance often fails to protect companies against adverse events in the host country.
C) The cost of buying risk insurance is high for all degrees of political risks in a given country or industry.
D) There is no guarantee that Carmine Inc. will receive immediate compensation following an adverse event.

Question 38

Magenta Inc., an Australian footwear company, is planning to open its stores in Sri Lanka. Before starting its operations in Sri Lanka, Magenta Inc. wants to assess the level of economic freedom in the country. It wants to collect data on the rule of law, limitations on government, the degree of regulatory efficiency, and the openness of the Sri Lankan market to domestic and international competition. Which of the following organizations can provide the required data to Magenta Inc.?

A) Freedom House
B) The Heritage Foundation
C) Orange One
D) The United Nations

Question 39

Argon Inc. is an Australian telecommunications company operating in Kimeria, a country in West Asia. Recently, the government of Kimeria passed a legislation that ordered the confiscation of all telecommunications companies in Kimeria. This scenario is an example of _____.

A) expropriation
B) repatriation
C) immigration
D) deportation

Question 40

Prism Inc., a German athletic footwear company, had to close its manufacturing plant in Nibellus, a country in East Asia, after a war broke between ethnic groups in Nibellus. Given this information, it can be said that Prism Inc. was subjected to _____.

A) valuation risk
B) reputational risk
C) micro political risk
D) macro political risk

Question 41

Do you think Great Britain's exit from the European Union will significantly affect international businesses? Give reasons to support your answer.

Question 42

Harold, an economist, asserts that international businesses are likely to be significantly affected by Great Britain's exit from the European Union. Which of the following statements supports Harold's assertion?

A) The refugee crisis in Europe is likely to worsen.
B) The financial industry in Europe is likely to do business anywhere on the continent and move employees around without worrying about visas.
C) The British are likely to find it difficult to move money, people, and products across Europe.
D) London's position as a world financial center is likely to strengthen.

Question 43

The government of Lekistan, a country in West Asia, has 58% holdings of Olive Inc., an oil company. Olive Inc. gives some percentage of its profits to the government. Given this information, it can be said that Olive Inc. is a _____.

A) joint venture firm
B) sole proprietorship company
C) partial state-owned enterprise
D) limited liability company

Question 44

Poskelis, a country in Eastern Europe, has a relatively free market. Customers in Poskelis are:

A) more likely to have shorter life expectancy.
B) likely to have less discretionary income.
C) less likely to be discriminating in their choices.
D) likely to have more leisure time in which to spend income.

Question 45

Cerise Inc., an American textile company, received a grant of nearly $2 billion from the government. However, the government doesn't have direct control over the operations of Cerise Inc. The government does not get direct payment, rather it gets indirect benefits from job creation and growth. Given this information, it can be said that Cerise Inc. is a _____.

A) joint venture firm
B) partial state-owned enterprise
C) sole proprietorship company
D) state-supported company

Question 46

In the context of government involvement in business, which of the following is true of state investment?

A) The state has partial ownership of a company.
B) The state provides incentives, grants, tax breaks, or subsidies to a company.
C) The government reinvests or spends the proceeds.
D) The government gets indirect benefits from job creation and growth.

Question 47

Unlike in a state-owned enterprise, in a state-supported company, _____.

A) the state operates the business of the company
B) the state gets indirect benefits from job creation and growth
C) the state buys stocks or bonds in the company
D) the profits made by the company are returned to the government

Question 48

Justify the argument that collectivism is more often associated with governments that exert more centralized control over society.

Question 49

Derek is a management professor at the University of California. He believes that the Arab Spring is a political event with global implications. Which of the following statements supports his belief?

A) The tourism industry in Egypt has flourished ever since the uprisings.
B) In Morocco, leaders have cracked down on free speech in a preemptive attempt to keep the protesters from organizing within the country.
C) The Syrian government fell to the protests resulting from the Arab Spring and introduced political uncertainty in the country.
D) The Libyan government resisted the protests resulting from the Arab Spring, which plunged the country into a long and violent civil war.

Question 50

Do you think the level of privatization within a country affects international businesses? Give reasons to support your answer.

Question 51

_____ is the primary process by which countries with a command economy change to a market economy.

A) Subsidization
B) Commodification
C) Privatization
D) Nationalization

Question 52

Emerald Inc. is a state-owned enterprise in Lobelis, a country in South America. It is likely that:

A) the government of Lobelis owns and operates the business of Emerald Inc.
B) Emerald Inc.'s goal is to serve environmental needs.
C) the government of Lobelis gets indirect benefits from the jobs created by Emerald Inc.
D) the government of Lobelis has bought stocks and bonds in Emerald Inc.

Question 53

Which of the following is true of a state-supported company?

A) The state provides incentives, grants, tax breaks, or subsidies to the company.
B) The state has partial ownership of the company.
C) The state receives part of the profits made by the company.
D) The state buys stocks or bonds in the company.

Question 54

The government of Jermenia, a country in Eastern Europe, owns Auburn Inc., a mining company worth $200 billion. The government controls all the operations of the company. The profits of Auburn Inc. are returned to the government. Given this information, it can be said that Auburn Inc. is a _____.

A) joint venture company
B) limited liability firm
C) sole proprietorship company
D) state-owned enterprise

Question 55

Do you think that the communist and socialist political systems evolved out of the inequality inherent in individualistic systems? Give reasons to support your answer.

Question 56

Brown Inc., a publishing company, is a partial state-owned enterprise in Descibelia, a country in South America. It is likely that:

A) the government of Descibelia gets indirect benefits from the jobs created by Emerald Inc.
B) Brown Inc. gives some of its profits to the government of Descibelia.
C) Brown Inc.'s goal is to serve environmental needs.
D) the government of Descibelia has bought stocks and bonds in Emerald Inc.

Question 57

In 2015, Iqbal and his family were displaced from their home in Syria in the wake of civil war. They sought asylum in Germany. However, Iqbal could not find employment in Germany because of a difficult political situation there. Which of the following political events is illustrated in this scenario?

A) Grexit
B) Brexit
C) The Great Depression
D) The refugee crisis

Question 58

From 1987 to 2001, the government of Gintesia, a country in West Asia, controlled the oil industry in the country. During that period, the government made all the decisions regarding the operations of the oil industry. However, in 2002, Gintesia began the process of removing government control from the industry. Now, the oil companies in Gintesia have private ownership. This scenario illustrates _____.

A) subsidization
B) commodification
C) nationalization
D) deregulation

Question 59

Cerise Inc., an American consumer electronics company, wants to expand its business internationally. Kiara, a manager at Cerise Inc., believes that the company should thoroughly understand the level of political freedom of a country before starting operations there. However, Dylan, another manager at Cerise Inc., thinks that conducting an analysis of the level of political freedom in a country might lead to unnecessary expenses for the company. Which of the following statements supports Kiara's belief?

A) A thorough understanding of the level of freedom can help Cerise Inc. form positive relationships with local governments.
B) A thorough understanding of the level of freedom can help Cerise Inc. evade taxation in foreign markets.
C) A thorough understanding of the level of freedom can help Cerise Inc. suppress competitive pressures in politically unstable countries.
D) A thorough understanding of the level of freedom can help Cerise Inc. minimize its operations expenses.

Question 60

It has been argued that indirect political risk is similar to collateral damage. Give your views.