IB MyLab Ch 6 Quiz

________ refers to the possibility of loss or adverse effects on company operations and profitability as a result of changes in a​ country's political​ and/or legal environment. A. Social risk B. Country risk C. Financial risk D. Cross-border risk E. International risk

Country risk

Which of the following characterizes​ extraterritoriality? A. Limiting foreign investment that may affect national security B. Revealing significant information about a​ firm's financial condition C. Restricting the amount of net income firms can remit to home countries D. Applying​ home-country laws to persons outside national borders E. Requiring foreign investors to seek joint ventures with local firms

Applying​ home-country laws to persons outside national borders

What is the benefit of environmental​ scanning? A. Assessing potential threats to the firm B. Forming a regional trading bloc C. Improving intellectual property protection D. Evaluating accounting practices E. Reducing research and development costs

Assessing potential threats to the firm

An American company that does business overseas has to be concerned about local events. Why should a company be concerned about political events and the legal environment in the country in which it does​ business? A. Changes in the political climate might influence government interference in business​ practices, putting the safety of the​ company's employees in jeopardy. B. Shifting priorities in political parties might cause unfavorable government interference with domestic firms. C. Unfavorable developments could lead to new conditions that require the company to protect its intellectual property. D. Initiatives developed by special interest groups could lead to the company experiencing supply chain issues. E. Changes in the legal environment might influence the government to encourage​ cross-border collaborations.

Changes in the political climate might influence government interference in business​ practices, putting the safety of the​ company's employees in jeopardy

What is the basis of civil​ law? A. Tradition B. Rule of law C. Codified rules D. Shariah law E. Common law

Codified rules

Which of the following statements BEST describes​ socialism? A. Emphasis is placed on individual accomplishment and innovations. B. Wealth should be used primarily for profit rather than as a means of production. C. Capital and wealth should be vested in the hands of individuals. D. Collective welfare outweighs individual welfare. E. The government controls the​ attitudes, values, and beliefs of the citizens.

Collective welfare outweighs individual welfare

Which type of economic system is associated with​ authoritarianism? A. Mixed economy B. Global economy C. Supply-and-demand economy D. Command economy E. Market economy

Command economy

Which of the following is a regional trade​ organization? A. World Bank B. Stockholm Chamber of Commerce C. European Union​ (EU) D. International Monetary Fund E. United Nations Conference on Trade and Development​ (UNCTAD)

EU

An agricultural firm is considering doing business in a foreign country with environmental​ laws, foreign investment​ laws, e-commerce​ laws, an underdeveloped legal​ system, and a socialistic government. Which of the following would MOST prevent the company from maximizing its​ profits? A. Environmental law would cause the greatest hindrance because firms must pay for pollution. B. The foreign investment laws would restrict the company from investing in resources. C. The underdeveloped legal system hinders the most because it would prohibit the company from resolving conflicts. D. The socialistic government would place restrictions on entering markets to increase customers. E. The​ e-commerce laws are the biggest hindrance because they could hinder daily​ operations, which affect profits.

Environmental law would cause the greatest hindrance because firms must pay for pollution

What kind of government seizure compensates​ foreign-owned businesses? A. Expropriation B. Confiscation C. Boycott D. Embargo E. Destabilization

Expropriation

Which of the following describes the Foreign Corrupt Practices Act​ (FCPA)? A. Firms are prohibited from offering bribes to foreign firms to obtain business B. FCPA criminal and civil penalties are minimal. C. Bribes are an accepted way of doing business overseas. D. Companies with securities listed in the United States are exempt from U.S. accounting provisions. E. Foreign firms can make payments to American firms while doing business in the United States.

Firms are prohibited from offering bribes to foreign firms to obtain business

Which of the following BEST describes a political​ system? A. It initiates special interest groups. B. It protects intellectual property. C. It establishes norms and customs. D. It adjudicates civil and commercial disputes. E. It ensures stability based on laws.

It ensures stability based on laws

A huge MNE was the victim of creeping expropriation from a foreign government. Why is creeping expropriation ethically​ wrong? A. It takes effect after the MNE improves product distribution throughout the country. B. It takes place when MNEs decide to invest. C. It occurs after an MNE makes large investments in a​ country's property and facilities. D. It occurs before the MNE agrees to move its operations overseas. E. It goes into effect while the MNE is planning to expand its operations in a country.

It occurs after an MNE makes large investments in a​ country's property and facilities

​________ occurs when one party files a lawsuit against another. A. Reconciliation B. Litigation C. Arbitration D. Mediation E. Conciliation

Litigation

Which of the following is a strategy managers can employ to manage country​ risk? A. Using bribes to develop international business B. Using a SIG to lobby for special favors C. Seeking a loan from the World Bank D. Maintaining a strict adherence to ethical behavior E. Engaging in questionable practices that are not specifically outlawed

Maintaining a strict adherence to ethical behavior

Which of the following participants is LEAST likely to transform a​ nation's political and legal​ system? A. The government or the public sector B. Private MNEs such as Unilever and Coca Cola C. Supranational agencies including the World Trade​ Organization, the United​ Nations, and the World Bank D. Regional trade​ organizations, including the European Union​ (EU), the North American Free Trade Agreement​ (NAFTA), and the Association of Southeast Asian Nations​ (ASEAN) E. Special interest groups that serve specific​ countries, industries, or causes

Private MNEs such as Unilever and Coca Cola

Which of the following BEST characterizes a​ democracy? A. Collectivism B. State regulation of public and private behavior C. Private property rights D. Lack of economic freedom E. A planned economy

Private property rights

Which of the following describes a legal system with clear rules that are publicly​ disclosed, enforced​ fairly, and respected by​ individuals, organizations, and the​ government? A. Rule of law B. Religious law C. Mixed system D. Civil law E. Common law

Rule of law

It has recently been found that special interest groups​ (SIGs) have unprecedented access to politicians through social events. Why should companies be concerned with the​ SIGs' access to government​ officials? A. SIGs exercise control over activities to prevent terrorism. B. SIGs represent only one side of the political arena. C. SIGs limit intellectual property protection. D. SIGs influence elected officials who can change policy. E. SIGs do not represent small businesses.

SIGs influence elected officials who can change policy

The United States has implemented trade sanctions on Iran and Syria. What is the purpose of​ sanctions? A. Sanctions terminate contracts and create new laws that favor local firms. B. Sanctions show a voluntary refusal to engage in commercial dealings with a nation. C. Sanctions punish unwanted activities by foreign countries. D. The government confiscates property with no compensation. E. Consumers may refuse to patronize firms that behave badly.

Sanctions punish unwanted activities by foreign countries

Which of the following does NOT describe Islamic​ law, also known as shariah​ law? A. The origins of Islamic law date back to Roman law and the Napoleonic Code. B. Followers of Islamic law are unlikely to differentiate between religious and secular life. C. To comply with shariah​ law, financial institutions use a variant of international banking called Islamic finance. D. Islamic law is found principally in the Middle East and North Africa. E. Islamic law governs personal​ relationships, those between citizens and the government and those between people and a supreme being.

The origins of Islamic law date back to Roman law and the Napoleonic Code

What is the basis of common​ law? A. Two or more legal systems operating together B. Three separate​ codes: commercial,​ civil, and criminal C. Tradition, previous​ cases, and legal precedents D. An​ all-inclusive system of laws that have been codified E. Religious​ beliefs, ethical​ codes, and moral values

Tradition, previous​ cases, and legal precedents

Activists organized​ a(n) ________ of petroleum company BP following the oil spill in the Gulf of Mexico. A. expropriation B. boycott C. nationalization D. embargo E. sanction

boycott

​Asterix, a French theme​ park, spoke out against the French​ government's support for the creation of Disneyland Paris because Disney is an American company. This example shows that​ ________. A. host-country governments solicit foreign businesses B. rival domestic firms complain to their government when foreign firms receive governmental support C. governments regulate international business activity D. foreign companies do not require government support when doing business in France E. the United Nations Conference on Trade and Development​ (UNCTAD) develops trade

rival domestic firms complain to their government when foreign firms receive governmental support

China has added democratic approaches such as land reforms and open markets to increase commercial activity. This example shows that​ ________. A. political party membership is mandatory to advance within the social and economic hierarchy B. activities by individuals that are not directed toward the​ state's goals are banned C. people can own property and accumulate private wealth D. market forces determine economic activity E. some totalitarian regimes are evolving toward democracy and capitalism

some totalitarian regimes are evolving toward democracy and capitalism