Deck 6: The Legal and Political Environment of Global Business

Question 1

Which of the following is NOT true about family planning in China?

A) Beginning in 1850, the communist government of China formally adopted a "one child" family planning policy.
B) The goal of the program has been to help alleviate China's overpopulation problem.
C) The program has resulted in "gendercide."
D) Young Chinese men are finding it very difficult to get married.
E) Observers have attributed about 50 percent of the increase in China's saving rate over the past 25 years due to its one child policy.

Answer 1

A

Question 2

_____ is Greek for "rule by the people"; it is a form of government in which all citizens have the right to vote.

A) Democracy
B) Totalitarianism
C) Dictator
D) Egalitarianism
E) Communism

Answer 2

A

Question 3

Tax law is the body of law governing legally enforceable agreements between parties to engage in economic exchange.

Answer 3

False

Question 4

Currency devaluation and conversion restrictions are two of the many economic risks companies take when engaging in international business.

Question 5

Rankings of countries throughout the world by potential political risks typically place Scandinavian and European countries such as Norway, Sweden, Switzerland, Luxembourg and Denmark near the top of the list, meaning that companies engaging in business in these countries face the least number of potential political risks.

Question 6

Totalitarian government refers to a form of government in which total (all)citizenry have the right to vote.

Question 7

The openness of democratic countries like Finland, and the protections such countries tend to generally provide for property rights and freedom of expression, usually make those countries more hospitable places to conduct global business than countries with totalitarian or semi-totalitarian political regimes.

Question 8

Patent rights generally remain enforcable for 5-20 years, depending on the invention and the country.

Question 9

Fortunately for global businesses, economic risks are independent of political risks.

Question 10

Of the following statements, which is NOT true about totalitarian governments?

A) Finland, South Korea, and Norway are run by a military dictatorship.
B) Iran has a totalitarian government where religious "Ayatollahs" hold principal sway.
C) A totalitarian variant is the absolute monarchy.
D) King Henry VIII who ruled England was an absolute monarch.
E) The dictatorships that prevailed in Eastern Europe during the Cold War are an example of military dictatorships.

Question 11

Of the following statements, which is NOT true about democracies?

A) Democracy is Greek for "rule by the people."
B) Most, if not all, democracies today are what are known as athenian democracies.
C) Some democracies, such as Japan, Spain, and Great Britain, also have ceremonial monarchs
D) Opposite democracies are totalitarian countries.
E) Athenian democracy was developed around 500 BCE.

Question 12

_____ government is a system of government in which individuals govern without the support or consent of the citizenry.

A) Athenian
B) Totalitarianism
C) Representative
D) Egalitarian
E) Communism

Question 13

Under Communist economic ideology, collectivistic rights give way in the extreme to individual rights.

Question 14

China, with its strong individualistic, entrepreneurial, free-market spirit, historically has been viewed as the leading economically capitalistic economy in the world.

Question 15

Most, if not all, democracies today are what are known as _____ democracies.

A) athenian
B) totalitarianism
C) representative
D) egalitarian
E) communism

Question 16

There are essentially two kinds of business corruption: private corruption and public corruption.

Question 17

Singapore historically has had a highly anti-business political system in a parliamentary model context, with one ruling party, in power since 1959.

Question 18

Very little role for government exists in a purely capitalistic or "free market" economic system.

Question 19

A country's potential nationalization of companies in the oil industry would represent a macropolitical risk.

Question 20

In the world today, Islamic law, as followed in countries such as Iran and Saudi Arabia, is the primary example of theocratic law in operation.

Question 21

According to the text regarding a study of corporate bribery in developed countries conducted by Transparency International, _____ had the most corporate bribery.

A) Russia
B) Belgium
C) Canada
D) Brazil
E) Taiwan

Question 22

A 2010 survey asked individuals whether they or someone in their household had paid a bribe in the past 12 months. The survey found a _____ percent bribery rate in the United States.

A) 1
B) 5
C) 13
D) 22
E) 33

Question 23

A country's potential nationalization of companies in the oil industry would represent a(n)_____ risk.

A) marketing
B) environmental
C) individual
D) macropolitical
E) micropolitical

Question 24

_____ involves unlawful arts or violence threatening the physical safety of others.

A) Persecuting
B) Oppressing
C) Intimidating
D) Bullying
E) Terrorism

Question 25

Which of the following is NOT true about socialism?

A) Socialism involves an economic ideology in which the government or state plays a strong role in the economy and may own stakes in certain businesses.
B) Countries with socialist economies aspire to be "classless."
C) Socialistic economies tend to be somewhat more collectively than individualistically oriented.
D) Many European countries have strong socialistic orientations.
E) Socialistic countries put a high degree of importance upon worker and labor rights.

Question 26

_____ risks are the risks that political forces or problems in a given country will have a meaningful negative impact upon the conduct of business in that country.

A) Political
B) Environmental
C) Individual
D) Economic
E) Financial

Question 27

Which of the following is NOT true about capitalism?

A) Capitalism refers to an economic system where businesses are privately owned with a strong individualistic profit orientation.
B) Very little role for government exists in a purely capitalistic or "free market" economic system.
C) Individual gains and losses of wealth can be very large.
D) Individual incentives are at the core of capitalistic economic ideology.
E) Historically, Russia has been viewed as the leading economically capitalistic economy in the world.

Question 28

Which of the following laws provides for (after a certain deductible)U.S. government insurance coverage for the risk of a U.S. business or property being attacked by a "foreign person or foreign interest?"

A) Foreign Corrupt Practices Act
B) Overseas Private Investment Act
C) Terrorism Risk Insurance Act
D) Antitrust Act
E) United We Stand Act

Question 29

The _____ is a U.S. law that prohibits U.S. companies from bribing or otherwise corrupting foreign government officials to win foreign government contracts or obtain other foreign government assistance for their businesses.

A) Foreign Corrupt Practices Act
B) Overseas Private Investment Act
C) Terrorism Risk Insurance Act
D) Antitrust Act
E) United We Stand Act

Question 30

Paying "protection money" or giving sales kickbacks to an organized crime group would represent at example of _____ corruption.

A) public
B) private
C) open
D) closed
E) external

Question 31

A country that has particularly militant labor unions known for frequent unplanned or wildcat strikes, or perhaps a country known for holding corporate executives hostage until their demands are met, are examples of _____ risk.

A) political
B) environmental
C) individual
D) economic
E) financial

Question 32

_____ refers to an economic system where businesses are privately owned with a strong individualistic profit orientation.

A) Totalitarianism
B) Democracy
C) Communism
D) Capitalism
E) Socialism

Question 33

Which of the following is a U.S. government agency that sells political risk insurance to U.S. businesses operating in countries with which the U.S. has a bilateral investment treaty?

A) Foreign Corrupt Corporation
B) Overseas Private Investment Corporation
C) Terrorism Risk Corporation
D) Antitrust Corporation
E) United Corporation

Question 34

_____ involves an economic ideology in which the government or state plays a strong role in the economy and may own stakes in certain businesses.

A) Totalitarianism
B) Democracy
C) Communism
D) Capitalism
E) Socialism

Question 35

A supplier paying a bribe to an officer of a company that purchases its products to help "facilitate" the purchase of said products is an example of _____ corruption.

A) public
B) private
C) open
D) closed
E) external

Question 36

A legal system based on a comprehensive listing of legal rules in sets of written codes of law is known as a _____ law legal system.

A) civil
B) common
C) theocratic
D) representative
E) family

Question 37

_____ corruption is business corruption involving other private businesses, individuals, or groups.

A) Public
B) Private
C) Open
D) Closed
E) External

Question 38

The practice of making illegal payments to government officials or engaging in blackmail, extortion, or other related activities to obtain government contracts or governmental approval for business activities is called _____ corruption.

A) public
B) private
C) open
D) closed
E) external

Question 39

The potential overthrow of a democratically elected presidential regime by a military junta is likely a(n)_____ risk.

A) marketing
B) environmental
C) individual
D) macropolitical
E) micropolitical

Question 40

A situation where businesses are able to illegally alter relevant private and/or public decision making by way of bribes, kickbacks, blackmail, extortion, and related activities is known as _____.

A) corruption
B) an ethical violation
C) dishonesty
D) treachery
E) deceitfulness

Question 41

An economic ideology where businesses are privately owned, strong individual incentives exist, and the government plays very little role in the economy is known as ________.

Question 42

A political risk that only affects a certain industry or set of firms in a given country is called a ______ risk.

Question 43

_____ establishes which violations of a nation's laws are crimes punishable by possible incarceration.

A) Democratic
B) Common
C) Theocratic
D) Representative
E) Criminal

Question 44

The ________ is a United States law that after a certain deductible provides U.S. businesses government insurance coverage for the risk of terrorism.

Question 45

Laws to promote "fair competition" among businesses are known as _____ laws.

A) tax
B) common
C) contract
D) theocratic
E) antitrust

Question 46

A form of government in which citizens vote to elect given individuals to serve as their representatives for a certain period of time is referred to as a(n)_________.

Question 47

________ ; Greek for "rule by the people"; is a form of government in which all citizens have the right to vote.

Question 48

The words "aspirin," "escalator," and "zipper" are examples of _____.

A) intellectual property
B) patents
C) trademarks
D) generalized trademarks
E) contracts

Question 49

________ is an economic ideology in which the government plays a strong role in the economy and may own stakes in certain businesses.

Question 50

A legal system where legislative bodies generally enact specific legal rules giving judges or courts considerable authority in interpreting these rules based on precedent and other factors is called a _____ law legal system.

A) civil
B) common
C) theocratic
D) representative
E) family

Question 51

_______ is defined as unlawful acts or violence threatening the physical safety of others.

Question 52

"Coca-Cola," the Nike "swoosh" logo, and McDonald's "golden arches" are examples of _____.

A) intellectual property
B) patents
C) trademarks
D) generalized trademarks
E) contracts

Question 53

The risks that government insability or problems in a given country will have a meaningful negative impact upon the conduct of business in that country make up the ______ risks.

Question 54

_______ is an economic ideology where by the government owns and controls all major factors of production, and is philosophically an economically classless society.

Question 55

Of the following statements about common law legal systems, which is NOT true?

A) They originated in Asia in 1250.
B) A key advantage of this approach is that judges have a fair amount of flexibility to change their interpretations of the law based on changing societal developments.
C) One downside of the common law approach is that it gives much power to the courts and judges.
D) It is a legal system where legislative bodies generally enact specific legal rules giving judges or courts considerable authority in interpreting these rules based on precedent and other factors.
E) Some say that in common law countries it is often appointed judges who "make the law" rather than elected legislators.

Question 56

A system of government in which individuals govern without the support or consent of the citizenry; for example, a military dictatorship is called a _______.

Question 57

A party wishing to sell a given piece of commercial real estate to another party would enter into a real estate agreement with the other party. This is an example of which type of law?

A) Tax
B) Common
C) Contract
D) Theocratic
E) Criminal

Question 58

A political risk that essentially affects all businesses in a given country is referred to as a _______ risk.

Question 59

_______ risks are those that financial problems or mismanagement in a given country will have a meaningful negative impact upon the conduct of business in that country

Question 60

______is a pure form of democracy, in which all adult citizens vote directly on matters affecting the community.

Question 61

The _________ is a United States law that prohibits U.S. companies from bribing or otherwise corrupting foreign government officials in order to win foreign government contracts or obtain other foreign government assistance for their businesses

Question 62

______ is defined as a situation where businesses are able to illegally alter relevant private and/or public decision making by way of bribes, kickbacks, blackmail, extortion and related activities.

Question 63

_________ law is the body of law governing legally enforceable agreements between parties to engage in economic exchange.

Question 64

______ laws are enacted to promote "fair competition" among businesses.

Question 65

_______ legal system is where legislative bodies generally enact less specific legal rules giving judges or courts considerable authority in interpreting these rules based on precedent and other factors

Question 66

The practice of making illegal payments to government officials or engaging in blackmail, extortion or other related activities in order to obtain government contracts or governmental approval for business activities is known as ______.

Question 67

A situation where there is only a single seller of a product in an industry and there are very high barriers to enter this industry is called a _______.

Question 68

Countries with little or no tax transparency are know as _______ countries.

Question 69

The body of law dealing with governmental levying of taxes on individuals and corporations is referred to as ______ law.

Question 70

The _______ is a U.S. government agency that sells political risk insurance to U.S. businesses operating in countries with which the U.S. has a bilateral investment treaty.

Question 71

_______ legal system is based on a comprehensive listing of legal rules in sets of written codes of law.

Question 72

_______ or "Seller beware"; involves placing on manufacturers or sellers of products the burden of making sure products are safe or at least clearly and explicitly warning consumers about the potential safety risks of said product.

Question 73

_______ or "buyer beware"; involves placing the burden of determining product safety on consumers.

Question 74

_________ involves bringing a dispute to a publicly or governmentally run court of law for resolution.

Question 75

A legal system based on a religious document and religious teachings is referred to as a _______ legal system.

Question 76

______ law that establishes which violations of a nation's laws are crimes punishable by possible incarceration.

Question 77

Business corruption involving other private businesses, individuals, or groups is called _____.

Question 78

_________ law governs how disputes arising in the conduct of global business are settled.

Question 79

The practice of companies acting in a manner which secretly thwarts competition amongst themselves is known as _______.

Question 80

The law which establishes the standards of product safety to which the manufacturers and sellers of products are to be held is called _________ law.