Deck 2: National Differences in Political Economy, and Legal Systems

Question 1

The central message of collectivism is that individual economic and political freedoms are the ground rules on which a society should be based.

Answer 1

False
Explanation: Collectivism refers to a political system that stresses the primacy of collective goals over individual goals. When collectivism is emphasized, the needs of society as a whole are generally viewed as being more important than individual freedoms.

Question 2

The number of command economies has fallen dramatically since the demise of communism in the late 1980s.

Answer 2

True
Explanation: Historically, command economies were found in communist countries where collectivist goals were given priority over individual goals. Since the demise of communism in the late 1980s, the number of command economies has fallen dramatically.

Question 3

A nation's legal system is usually of very little interest to international business managers, because international businesses are headquartered in different countries.

Answer 3

False
Explanation: The legal system of a country refers to the rules, or laws, that regulate behavior along with the processes by which the laws are enforced and through which redress for grievances is obtained. The legal system of a country is of immense importance to international business.

Question 4

Democracy is a form of government that prohibits opposing political parties.

Question 5

In a totalitarian country, there are safeguards to protect an individual's right to freedom of expression, opinion, and organization.

Question 6

The communists believed that socialism could be achieved by democratic means, and turned their backs on violent revolution and dictatorship.

Question 7

Judges under a civil law system have more flexibility than those under a common law system.

Question 8

Patents, copyrights, and trademarks establish ownership rights over intellectual property.

Question 9

Contracts under a civil law system tend to be very detailed with all contingencies spelled out.

Question 10

In mixed economies, governments also tend to take into state ownership troubled firms whose continued operation is thought to be vital to national interests.

Question 11

The Cold War was, in many respects, a war between collectivism and individualism.

Question 12

Patents discourage companies from committing themselves to extensive basic research.

Question 13

A theocratic law system is one in which the law is based on religious teachings.

Question 14

The parties to an agreement normally resort to contract law when one party feels the other has violated either the letter or the spirit of an agreement.

Question 15

The objective of the government in a command economy is to encourage free and fair competition between private producers.

Question 16

The Foreign Corrupt Practices Act does not allow for grease payments.

Question 17

To facilitate international business, property rights are defined in a consistent way across countries.

Question 18

Property rights can be violated in two ways-through private action and through public action.

Question 19

Many of the world's larger trading nations, including India and the United Kingdom, have not ratified the United Nations Convention on Contracts for the International Sale of Goods (CISG).

Question 20

Most modern democratic states practice representative democracy.

Question 21

The Trade-Related Aspects of Intellectual Property Rights, attempts to reduce intellectual property protections to enhance trade.

Question 22

Interdependent political, economic, and legal systems of a country make up its:

A) administrative agenda.
B) socioeconomic fabric.
C) cultural environment.
D) political economy.

Question 23

Product liability can be much lower if a product does not conform to required safety standards.

Question 24

_____ refers to a state where political power is monopolized by a party, group, or individual that governs according to religious principles.

A) Representative democracy
B) Theocratic totalitarianism
C) Tribal anarchism
D) Monotheistic communism

Question 25

In several Western democracies, the poor performance of state-owned enterprises, because of protection from competition and guaranteed government financial support, led to _____.

A) privatization
B) nationalization
C) liberalization
D) socialization of production

Question 26

Which system of government generally permits some individual economic freedom but restricts individual political freedom, frequently on the grounds that it would lead to the rise of communism?

A) Tribal totalitarianism
B) Right-wing totalitarianism
C) Democratic totalitarianism
D) Theocratic totalitarianism

Question 27

Modern socialism has been popularized largely through the work of _____.

A) Adam Smith
B) Karl Marx
C) David Hume
D) Thomas Hobbes

Question 28

Product liability sets certain safety standards to which a product must adhere.

Question 29

Totalitarianism:

A) refers to a political system in which government is by the people, exercised either directly or through elected representatives.
B) is based on a belief that citizens should be directly involved in decision making.
C) is a form of government in which one person or political party exercises absolute control over all spheres of human life.
D) is based on the idea that the welfare of society is best served by letting people pursue their own economic self-interests.

Question 30

A political system that prioritizes the needs of the society over individual freedoms is called _____.

A) totalitarianism
B) collectivism
C) capitalism
D) egalitarianism

Question 31

In a pure market economy:

A) all productive activities are owned by the state.
B) production is determined by the interaction of supply and demand.
C) collectivist goals are given priority over individual goals.
D) the prices at which goods are sold is determined by the government.

Question 32

The tenet of _____ is that the welfare of society is best served by letting people pursue their own economic self-interest.

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

Question 33

Antitrust laws in the United States are designed to:

A) restrict agricultural subsidies.
B) increase trade barriers.
C) outlaw monopolies.
D) restrict privatization.

Question 34

Which of the following is a feature of a democracy?

A) Exercise of absolute control by one person or political party.
B) Governance by people or elected representatives.
C) Prohibition of entry to opposing political parties.
D) Complete restriction of individual political freedom.

Question 35

Peoples' right to protest on issues of accountability in public expenditure would be possible in a _____ political set-up.

A) dictatorial
B) democratic
C) totalitarian
D) fascist

Question 36

The political systems of a country raise ethical issues that have implications for the practice of international business.

Question 37

The _____ believed that socialism could be achieved only through violent revolution and totalitarian dictatorship.

A) existentialists
B) social democrats
C) communists
D) anarchists

Question 38

An economy in which the interaction of supply and demand determines the quantity in which goods and services are produced is called a _____.

A) planned economy
B) command economy
C) closed economy
D) market economy

Question 39

Which of the following philosophies can be traced back to the ancient Greek philosopher Aristotle?

A) Socialism
B) Individualism
C) Collectivism
D) Anarchism

Question 40

Which of the following statements about individualism is true?

A) Individualism promotes state ownership of the basic means of production, distribution, and exchange.
B) Individualism promotes globalization.
C) Individualism creates an anti-business environment.
D) Individualism advocates for a democratic political system.

Question 41

One key components of a country's legal system is:

A) establishing a mixed economy.
B) taking a hands-off approach to business practices.
C) defining the rights and obligations of those involved in business transactions.
D) leaving the monitoring of the way business transactions are executed to the United Nations.

Question 42

Which of the following provides exclusive legal rights to authors, composers, playwrights, artists, and publishers to publish and disperse their work as they see fit?

A) Patent
B) Copyright
C) Trademark
D) License

Question 43

In Russia, in the chaotic period following the collapse of communism, an outdated legal system, coupled with a weak police force and judicial system, allowed the Russian Mafia to demand "protection money" from business owners. Any business owner who rebelled had to face violent retribution. This violation of property rights exemplifies _____.

A) private action
B) copyright violation
C) infrastructural failure
D) public liability

Question 44

The Research and Development division of a company has recently designed a new coffee vending machine that is likely to sell very well in the market. It is compact, user-friendly, and provides unprecedented efficiency in terms of cost per cup. Consequently, the company fears that its competitors would soon mimic the design of their product and to protect its product, it is now seeking a _____.

A) copyright
B) patent
C) trademark
D) certification

Question 45

A _____ system is based on a very detailed set of laws organized into codes.

A) traditional law
B) theocratic law
C) civil law
D) common law

Question 46

Which of the following is an example of intellectual property?

A) A music score
B) A lazer-tag game
C) A software business
D) A theater

Question 47

Under the _____, cases are judged with reference to three characteristics: tradition, precedent, and custom.

A) theocratic law system
B) civil law system
C) contract law system
D) common law system

Question 48

A _____ grants the inventor of a new product or process exclusive rights for a defined period of time to the manufacture, use, or sale of that invention.

A) copyright
B) trademark
C) contract
D) patent

Question 49

_____ is the collective term for the legal rights relating to the use to which a resource is put and over the use made of any income that may be derived from that resource.

A) Trade rights
B) Property rights
C) Positive rights
D) Common rights

Question 50

In a _____ economy, certain sectors of the economy are left to private ownership and free market mechanisms while other sectors have significant state ownership and government planning.

A) market
B) private
C) command
D) mixed

Question 51

Design and names by which merchants or manufacturers designate and differentiate their products are known as _____.

A) trademarks
B) copyrights
C) patents
D) licenses

Question 52

Which of the following is the most widely practiced theocratic legal system in the world today?

A) Hindu law
B) Sikh law
C) Islamic law
D) Jewish law

Question 53

Which of the following areas of international trade is regulated by the Foreign Corrupt Practices Act?

A) Making and performance of commercial contracts in international trade.
B) Preventing bribery and unethical acts in the conduct of international business.
C) Establishing a set of safety standards to which a new product must adhere.
D) Controlling the mafia activity that hinders trade in Russia, Japan, and the U.S.

Question 54

A civil law system tends to be less adversarial than a common law system because the:

A) judges' decisions are based on detailed legal codes.
B) judges have the freedom to interpret laws based on the situation.
C) judges' decisions are based on religious teachings.
D) judges are guided by interpretations made in prior legal cases.

Question 55

In a(n) _____ economy the government plans the goods and services that a country produces, the quantity in which they are produced, and the prices at which they are sold.

A) market
B) command
C) open economy
D) laissez-faire

Question 56

In which of the following economies would the government be most likely to take into state ownership troubled firms whose continued operation is thought to be vital to national interests?

A) Market economies
B) Laissez-faire economies
C) Liberal economies
D) Mixed economies

Question 57

Which of the following statements about the legal systems of countries is true?

A) They can affect the attractiveness of a country as an investment site or market.
B) They are not influenced by the prevailing political system of the country.
C) They are almost the same for all countries.
D) They are of little importance to international business.

Question 58

A common law system is different from a civil law system because:

A) a common law system is based on religious teachings, while a civil law system is based on cultural traditions.
B) a common law system is very rigid, while a civil law system tends to be more flexible.
C) in a common law system a judge relies on legal codes to make rulings, while in a civil law system a judge relies on his intuition and moral reasoning to make judgments.
D) in a common law system a judge has the power to interpret the law, while in a civil law system a judge has the power only to apply the law.

Question 59

Violation of property rights done through legal mechanisms such as levying excessive taxation and requiring expensive licenses or permits from property holders is called _____.

A) private action
B) collective action
C) public action
D) copyright violation

Question 60

A theocratic law system is one in which the law is based on:

A) religious teachings.
B) tradition, precedent, and custom.
C) a detailed set of laws organized into codes.
D) cultural and social norms.

Question 61

Private action refers to:

A) public officials extorting income, resources, or the property itself from property holders.
B) bribing government officials in foreign countries in an attempt to win lucrative contracts.
C) theft, piracy, blackmail, and the like by private individuals or groups.
D) violations of intellectual property rights.

Question 62

In a(n) _____ society, the welfare of society is best served by letting people pursue their own economic self-interest.

A) individualist
B) capitalist
C) democratic
D) totalitarian

Question 63

Which of the following is a safeguard that representative democracies use to ensure that their elected officials are held responsible for their actions?

A) Unlimited terms for elected representatives
B) A court system that is integrated with the political system
C) An individual's right to freedom of expression, opinion, and organization
D) A political police force and armed service

Question 64

Which of the following is true of criminal liability laws?

A) Calls for the payment of monetary damages
B) They are more extensive in Western Europe than in any other region of the world
C) Results in fines or imprisonment
D) They are less impactful if the product does not conform to the required safety standards

Question 65

The legal rights over the use to which a resource is put and over the use made of any income that may be derived from that resource.

A) Property rights
B) Public action
C) Intellectual rights
D) Private action

Question 66

Judges in a(n) _____ have the power to interpret the law so that it applies to the unique circumstances of an individual case.

A) civil law system
B) international law system
C) common law system
D) theocratic law system

Question 67

The _____ establishes a uniform set of rules governing certain aspects of the making and performance of everyday commercial contracts between sellers and buyers who have their places of business in different nations.

A) Trade-Related Aspects of Intellectual Property Rights (TRIPS)
B) Paris Convention for the Protection of Industrial Property
C) United Nations Convention on Contracts for the International Sale of Goods (CIGS)
D) World Trade Organization (WTO)

Question 68

In a _____, if demand for a product exceeds supply, prices will rise, signaling to producers to produce more.

A) mixed economy
B) market economy
C) collectivist economy
D) command economy

Question 69

The _____ makes it illegal for American companies to bribe a foreign government official in order to obtain or maintain business over which that foreign official has authority, and requires all publicly traded companies to keep detailed records that would allow determining whether a violation of the act has occurred.

A) Trade-Related Aspects of Intellectual Property Rights (TRIPS)
B) Foreign Corrupt Practices Act
C) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions
D) Organisation for Economic Co-operation and Development (OECD)

Question 70

_____ are established through patents, copyrights, and trademarks.

A) Digital signatures
B) Ownership rights over private property
C) Origination fees and tributes
D) Ownership rights over intellectual property

Question 71

Safety standards to which a product must adhere are set by:

A) safety certifications.
B) contract laws.
C) product safety laws.
D) product liability laws.

Question 72

_____ argued that individual diversity and private ownership are undesirable.

A) Karl Marx
B) Plato
C) John Stuart Smith
D) Aristotle

Question 73

Which of the following statements about the Trade Related Aspects of Intellectual Property Rights (or TRIPS) agreement is true?

A) It was designed to oversee the loosening of intellectual property regulations, beginning in 1995.
B) It obliged WTO members to grant and enforce patents lasting at least 20 years and copyrights lasting 50 years.
C) It directed rich countries to comply with its rules of intellectual property protection within five years.
D) It provided the very poorest countries amnesty from complying with its rules of intellectual property protection.

Question 74

Which of the following is a reason that command economies tend to stagnate?

A) Costs are tightly controlled and business are forced to be efficient rather than dynamic and innovative.
B) The abolition of private ownership means there is no incentive for individuals to look for better ways to serve consumer needs.
C) All economic resources are mobilized for the public good.
D) Individuals in command economy countries lack the skills to be innovative.

Question 75

Systems that emphasize collectivism tend toward _____.

A) totalitarianism
B) capitalism
C) democracy
D) privatization

Question 76

_____ generally permits some individual economic freedom but restricts individual political freedom, frequently on the grounds that it would lead to the rise of communism.

A) Communist totalitarianism
B) Theoretical totalitarianism
C) Right-wing totalitarianism
D) Tribal totalitarianism

Question 77

In common law, _____ refers to cases that have come before the courts in the past.

A) custom
B) precedent
C) codification
D) tradition

Question 78

The TRIPS agreement was designed to:

A) exclude China from all intellectual property agreements.
B) oversee a much stricter enforcement of intellectual property regulations.
C) hold a firm and its officers responsible when a product causes injury, death, or damage.
D) support traded software and recorded property among developed markets.

Question 79

The most widely practiced theocratic legal system in the world today.

A) Christian
B) Hindu
C) Jewish
D) Islamic

Question 80

The abolition of _____ in a command economy means there is no incentive for individuals to look for better ways to serve consumer needs.

A) private ownership
B) public ownership
C) government-owned businesses
D) co-operatives