Deck 6: The Legal,economic and Political Environment of Global Business

Question 1

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

Answer 1

False

Question 2

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

Answer 2

False

Question 3

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.

Answer 3

True

Question 4

Restrictions on the transfer or exchange of a given foreign country's currency is an example of an economic risk.

Question 5

Prolonged civil war in a politically unstable country is an example of a macropolitical risk.

Question 6

The rise of ISIS has increased the political risk of Middle Eastern countries doing business with the United States.

Question 7

The openness of democratic countries,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

In the United States,companies generally operate under a regime of caveat emptor,or "buyer beware."

Question 9

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

Question 10

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

Question 11

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

Question 12

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

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

Question 13

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

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

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

"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 16

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 17

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 18

Which of the following is an example of corruption?

A) Paying a bribe to a company executive in order to be awarded a contract.
B) Damaging equipment in a factory to protest treatment of workers.
C) Lobbying a congresswoman to vote for a tax cut for business.
D) Urging union workers to go on strike in order to gain concessions.
E) Raising the price on a product in order to make a profit

Question 19

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

Question 20

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

Question 21

A 2013 survey asked individuals whether they or someone in their household had paid a bribe in the past 12 months.The survey found the bribery rate in the United States was between ______.

A) 1 and 4.9 percent
B) 5 and 9.9 percent
C) 10 and 14.9 percent
D) 15 and 19.9 percent
E) 20 and 24.9 percent

Question 22

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 23

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

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

Question 24

Which is the largest nation in the world with a communist economic ideology?

A) China
B) Russia
C) Vietnam
D) India
E) South Africa

Question 25

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

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

Question 26

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) Passage of the Patient Protection and Affordable Care Act marked the United States' movement away from capitalism.

Question 27

A recent survey found this nation to be the most dangerous in the world.

A) Croatia
B) Saudi Arabia
C) China
D) North Korea
E) Somalia

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

Unlawful acts of violence threatening the physical safety of others is called _____.

A) blackmail
B) extortion
C) economic risk
D) terrorism
E) corruption

Question 30

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 31

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 32

According to the text regarding a study of corporate bribery in developed countries conducted by Transparency International,which of the following nations had the most corporate bribery?

A) Russia
B) the United States
C) Hong Kong
D) Japan
E) Singapore

Question 33

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 34

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 35

In this form of government,all citizens vote directly on matters affecting the community

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

Question 36

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

A) Totalitarian governments always have weak economies.
B) A country run by a military dictatorship would be an example of a totalitarian government.
C) Totalitarian governments rule without the support or consent of the citizens.
D) An absolute monarchy is an example of a totalitarian government.
E) The dictatorships that prevailed in Eastern Europe during the Cold War were examples of totalitarian governments.

Question 37

In a civil law country,the real power lies with

A) labor unions and public works employees.
B) the legislative branch of government.
C) the judiciary.
D) corporations and banks.
E) the executive branch of government.

Question 38

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 39

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 40

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

A) They originated in China under the Ming Dynasty.
B) A key advantage of common law systems 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 judges can often interpret the law as they see fit.
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 41

Scenario - The Rochester Corporation
The Rochester Corporation is a multinational import-export firm with headquarters in the New York,USA.It currently has thirteen offices located on foreign soil and plans to open seven more by the end of the year.Rochester is quite proud of the fact that it reached over four billion dollars in revenue last year.The officers of the corporation are expecting to net over six billion per year with the projected expansion.
The Rochester Corporation considers it is a veteran when it comes to dealing with foreign governments and nations.The company maintains strict guidelines for employees and will only hire those who have expatriate experience of at least three years.The owners of Rochester attribute the company's continued success to the experience and knowledge of its employees.
If the Rochester Corporation experienced unresolved legal problems with one of its customers located in a foreign country,all of the following except which one would be a potential way to remedy the problem?

A) Engage in arbitration
B) Have the court system use dispute settlement law to reach a resolution to the problem
C) Use the services of a mediator or an arbitrator
D) Bring about litigation in the reigning court of law
E) Obtain an executive order from the U.S.Attorney General's office

Question 42

Scenario - Britton Manufacturing
Brittany and Brandi Britton recently took over the family business,Britton Manufacturing,after their father and company founder retired.The company manufactures the finest of bed linens and has grown to be recognized as sixth in the industry for sales.Britton Manufacturing's products have been produced and sold strictly within the continental United States until this point in time.Now,the new owners desire to change things and plan to begin exporting the company's products to England,France,Norway,Greece,Egypt,China,and Germany.
Both Brittany and Brandi have graduated college with degrees in business and are looking forward to putting their educations to good use in growing the company.They realize there is much to learn and are looking forward to the challenges facing their international endeavor.They have projected an increase in sales by 15 million dollars in the first year as well as employment opportunities for an additional 500 workers in the U.S.
One of the international markets in which Britton Manufacturing plans to sell its products is China.All but which one of the following identifies a significant challenge facing the company in this international marketplace?

A) The product laws of China are very similar to those found within the United States.
B) China is considered a communist country in which the government owns or controls most of the factors of production.
C) There is the possibility of the Chinese government confiscating the assets (the products)of Britton Manufacturing.
D) For the most part,the government of China continues to maintain control of the unions within China.
E) The market of China provides enormous opportunity for foreign companies because it has been emerging as one of the most economically powerful nations in the world in recent years.

Question 43

Scenario - Britton Manufacturing
Brittany and Brandi Britton recently took over the family business,Britton Manufacturing,after their father and company founder retired.The company manufactures the finest of bed linens and has grown to be recognized as sixth in the industry for sales.Britton Manufacturing's products have been produced and sold strictly within the continental United States until this point in time.Now,the new owners desire to change things and plan to begin exporting the company's products to England,France,Norway,Greece,Egypt,China,and Germany.
Both Brittany and Brandi have graduated college with degrees in business and are looking forward to putting their educations to good use in growing the company.They realize there is much to learn and are looking forward to the challenges facing their international endeavor.They have projected an increase in sales by 15 million dollars in the first year as well as employment opportunities for an additional 500 workers in the U.S.
Britton Manufacturing faces many laws and regulations that will impact the company while it conducts business on foreign soil.Which one of the following is least likely to be of concern to Britton in the international marketplace?

A) Contract Law
B) U.S.Labor Laws
C) Tax Law
D) Product Safety Laws
E) Dispute Settlement Law

Question 44

Countries with little or no tax ______ are known as tax haven countries.

Question 45

A(n)________ is a distinctive phrase,name,word,picture,symbol or design,or combination of these,that identifies a given business' service or product,and is owned by said business.

Question 46

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

Question 47

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

Question 48

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

Question 49

A(n)_______ is the exclusive legal right that authors,playwrights,publishers,artists,composers,performers,photographers,and other creators have to publish and disseminate their work as they see fit.

Question 50

Antitrust laws are designed to promote "fair ______" among businesses.

Question 51

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

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

Question 52

Scenario - The Rochester Corporation
The Rochester Corporation is a multinational import-export firm with headquarters in the New York,USA.It currently has thirteen offices located on foreign soil and plans to open seven more by the end of the year.Rochester is quite proud of the fact that it reached over four billion dollars in revenue last year.The officers of the corporation are expecting to net over six billion per year with the projected expansion.
The Rochester Corporation considers it is a veteran when it comes to dealing with foreign governments and nations.The company maintains strict guidelines for employees and will only hire those who have expatriate experience of at least three years.The owners of Rochester attribute the company's continued success to the experience and knowledge of its employees.
In dealing with such a varied number of customers from virtually all major points in the world,the Rochester Corporation is subjected to many risks.Which one of the following would not be considered an economic risk Rochester potentially faces in its global dealings?

A) Lack of consumer interest in the company's products
B) The devaluation of foreign currency
C) Confiscation of a company shipping vessel by pirates
D) Currency conversion restrictions
E) Potential for hyper-inflation to occur

Question 53

Caveat venditor,or "______ beware," involves placing the burden of product safety on manufacturers rather than on consumers.

Question 54

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 55

Scenario - The Rochester Corporation
The Rochester Corporation is a multinational import-export firm with headquarters in the New York,USA.It currently has thirteen offices located on foreign soil and plans to open seven more by the end of the year.Rochester is quite proud of the fact that it reached over four billion dollars in revenue last year.The officers of the corporation are expecting to net over six billion per year with the projected expansion.
The Rochester Corporation considers it is a veteran when it comes to dealing with foreign governments and nations.The company maintains strict guidelines for employees and will only hire those who have expatriate experience of at least three years.The owners of Rochester attribute the company's continued success to the experience and knowledge of its employees.
The Rochester Corporation has three products that were created by its employees.These products have received patents from both the United States and twenty foreign nations.All three products are currently exported to all of the company's customers.Which one of the following does not reflect guidelines or rules governing these patents?

A) The inventor has exclusive rights to the product for a certain period of time
B) Patent rights remain enforceable for 5-20 years depending upon the invention and the country involved
C) Patents have an expiration date set some time in the future depending on the invention
D) Modifications to the product by others are allowed after one year and with government consent
E) Patents offer inventors limited legal monopoly rights

Question 56

_____ 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 57

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 58

_____ 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
Enter the appropriate word(s)to complete the statement.

Question 59

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(n)_______.

Question 60

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

Question 61

Scenario - The Rochester Corporation
The Rochester Corporation is a multinational import-export firm with headquarters in the New York,USA.It currently has thirteen offices located on foreign soil and plans to open seven more by the end of the year.Rochester is quite proud of the fact that it reached over four billion dollars in revenue last year.The officers of the corporation are expecting to net over six billion per year with the projected expansion.
The Rochester Corporation considers it is a veteran when it comes to dealing with foreign governments and nations.The company maintains strict guidelines for employees and will only hire those who have expatriate experience of at least three years.The owners of Rochester attribute the company's continued success to the experience and knowledge of its employees.
Entering foreign marketplaces poses many challenges to companies like Britton Manufacturing.Which one of the following would Britton Manufacturing least expect to be a challenge in its international business expansion?

A) The potential for the company's executives to be kidnapped and held for ransom while on foreign soil
B) The constant fluctuation of foreign currencies in relation to the U.S.dollar
C) The economic downturn in the United States resulting in many experienced workers being unemployed or underemployed
D) The instability and volatility of some foreign governments around the world
E) The potential for terrorist activity within certain foreign nations