Deck 3: The Political, Legal, and Regulatory Environments of Global Marketing

Question 1

Licensing agreements do not come under antitrust scrutiny.

Answer 1

False

Question 2

Antitrust laws are designed to restrict new competition from entering foreign markets.

Answer 2

False

Question 3

Private International Law is the body of law that applies to interpretations of and disputes arising from commercial transactions between companies of different nations.

Answer 3

True

Question 4

If a foreign company can be shown to be doing business in the United States, then it is subject to the jurisdiction of U.S. courts.

Question 5

Most countries that were once part of the British Empire now have civil law systems.

Question 6

Foreign properties expropriated by a government cannot be reclaimed.

Question 7

Brand value is one of the most important assets that a business holds.

Question 8

Common law cases are decided by precedents set in past judicial decisions.

Question 9

U.S. companies are subject to U.S. antitrust laws no matter what country they are doing business in.

Question 10

In the United States, a patent holder retains all rights for the life of the patent only if the product is produced or sold.

Question 11

Many companies make efforts to minimize their tax liability by shifting the location of income.

Question 12

In the United States, laws do not regulate the licensing process per se as do technology transfer laws in the EU, Australia, Japan, and many developing countries.

Question 13

Each act of privatization dilutes the command portion of a mixed economic system.

Question 14

Political risk tends to be higher in developing countries compared to industrialized countries.

Question 15

Creeping expropriation is said to have occurred when a previously expropriated property by the government is returned to the original owners.

Question 16

Typically, all economic activity within a nation is governed by that nation's laws.

Question 17

A government can limit the economic activities of a foreign firm that resists its effort to introduce home-country nationals into the company.

Question 18

Expropriation is said to have occurred when a foreign national company dispossesses a home-country company through uncompetitive practices.

Question 19

If a foreign company is taken over by the host-country government and some form of compensation is paid, confiscation is said to have occurred.

Question 20

An associative counterfeit uses a product name that differs slightly from a well-known brand but is close enough that consumers will associate it with the genuine product.

Question 21

________ refers to governmental action to dispossess a company or investor.

A) Equity dilution
B) Deracination
C) Expropriation
D) Earnings stripping

Question 22

Which of the following business practices does the Sherman Act of 1890 prohibit?

A) limiting production
B) betting
C) licensing trademarks
D) direct investments

Question 23

A common economic characteristic of countries with pervasive corruption is a lack of integration with the global economy.

Question 24

When a nation refuses to accept the judgment against it made by the International Court of Justice, the plaintiff nation can seek recourse through the ________.

A) International Law Commission
B) Permanent Court of International Justice
C) United Nations Security Council
D) World Bank Investment Dispute Settlement Center

Question 25

The national laws applying to a transaction crossing boundaries must be determined by ________.

A) both parties involved in the agreement
B) only the host-country government
C) only parent-country government
D) the International Law Commission

Question 26

Which of the following statements is true about patent and trademark protection in the global marketing environment?

A) Patents and trademarks protected in one country are not necessarily protected in another.
B) Foreign organizations can register patents and trademarks only in their parent country.
C) Patent and trademark laws are the same across all nations.
D) Trademarks and patents cannot be counterfeited.

Question 27

In many parts of the world, sales of unauthorized videos of Hollywood movies cost the movie studios billions of dollars. When illegal copies of movies are made, what form of intellectual property has been wrongly appropriated?

A) patent
B) copyright
C) trademark
D) trade secrets

Question 28

A U.S. company is exempt from the Foreign Corrupt Practices Act if a host-country citizen serving as an agent for the company pays a bribe to a government official in the host country.

Question 29

The fact that the United States has more lawyers per 100,000 people than other countries is, in part, a reflection of the low-context nature of American culture.

Question 30

How can a licensor prevent a licensee from using the licensed technology to compete with it directly?

A) by allowing the licensee to continue using the technology after the contract has expired
B) by limiting the licensee to selling only in the home country
C) by keeping the licensed technology unchanged
D) by cancelling the contractual agreement

Question 31

Which of the following statements is true about code law?

A) In code-law countries, intellectual property rights are established by prior use.
B) It is established based on the rulings from previous cases.
C) It uses written norms, which are complemented by court decisions.
D) In code-law countries, companies are granted the ability to operate by public authority.

Question 32

By law, U.S. courts can be discretionary while accepting an arbitrator's decision in patent disputes.

Question 33

Which of the following is an approach that foreign companies in the United States use for avoiding taxes on their revenues?

A) confiscation
B) liquidation
C) expropriation
D) earnings stripping

Question 34

GATT is primarily based on the principle of trade protectionism.

Question 35

Generally, companies find that the fastest, easiest, and least expensive way to resolve international commercial disputes is litigation.

Question 36

________ refers to the unauthorized copying or production of a product.

A) Accommodation
B) Embezzlement
C) Counterfeiting
D) Expropriation

Question 37

A company hoping to protect its trade secrets from being stolen by a foreign company can seek relief under the Trade-Related Aspects of Intellectual Property Rights (TRIPs) agreement.

Question 38

________ occurs if ownership of a property or assets of a company is transferred to the host government.

A) Internalization
B) Nationalization
C) Deportation
D) Deracination

Question 39

U.S. individuals are exempted from being prosecuted for bribery under the Foreign Corrupt Practices Act.

Question 40

Which of the following statements is true about the political risks in a global marketing environment?

A) The political risk of low-income countries is lesser than high-income countries.
B) The more a country is developed, the greater is the political risk.
C) Political risk is a major deterrent for companies that want to invest abroad.
D) A country with high political risks attracts more investors.

Question 41

What is the role of GATT and the World Trade Organization in international trade?

Question 42

Which of the following replaced the General Agreement on Tariffs and Trade?

A) the World Trade Organization
B) the European Union
C) the North American Free Trade Agreement
D) the World Intellectual Property Organization

Question 43

Which of the following is an economic attribute shared by countries with a high perceived level of corruption?

A) high levels of poverty
B) high economic growth rate
C) free trade policies
D) low import tariffs

Question 44

Americans doing business abroad must conform to proper ethical and legal behavior as spelled out by the ________.

A) TRIPs
B) FCPA
C) FERA
D) ICJ

Question 45

Which of the following has been empowered to resolve conflicts between national law and EU law?

A) the European Court of Auditors
B) the European Court of Justice
C) the International Chamber of Commerce
D) the International Criminal Court

Question 46

Which of the following is an example of a trade secret?

A) customer list
B) brand logo
C) product price
D) company profit

Question 47

Which of the following is an example of grand corruption?

A) isolated transactions executed by individual public officials that abuse their office
B) favors granted in exchange for personal consideration to a public official
C) collusion between members of the private sector and public officials for mutual benefit
D) state officials misusing large amounts of public resources over a prolonged period

Question 48

________ are confidential information or knowledge that has commercial value.

A) Copyrights
B) Trade secrets
C) Trademarks
D) Patents

Question 49

________ consists of isolated transactions executed by individual public officials that abuse their office.

A) Bureaucratic corruption
B) Earnings stripping
C) Grand corruption
D) Influence peddling

Question 50

________ refers to the misuse of entrusted power for private gain.

A) Corruption
B) Counterfeiting
C) Piracy
D) Imitation

Question 51

Which of the following marked the first international trade agreement with provisions for protecting trade secrets?

A) EPA
B) EU
C) NAFTA
D) TRIPs

Question 52

Explain the different forms of corruption.

Question 53

________ involves collusion between members of private sector and public officials to gain mutual benefit.

A) Bureaucratic corruption
B) State capture
C) Grand corruption
D) Expropriation