IBA Exam 2

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Which one of the following legal systems is based on​ traditions, former​ cases, and legal models set by courts through the clarification of​ statutes, legislation, and previous​ rulings?

common law

Which one of the following involves reducing or removing barriers to​ trade, establishing shared external​ barriers, and permitting the unrestricted movement of​ goods, services, and factors of production within participating​ countries?

common market

_______ imposes limitations on the expenditure or outflow of tangible currency from a certain nation or on the influx​ of foreign currencies.

currency control

A(n) ______ is a group of official organizations that create a government

political system

Which one of the following is a collection of official organizations that create a government, including legislative groups, political parties, lobbying groups, and trade unions?

political system

A corporate customer in the United States wants to hire a South African web design firm. The U.S. executive talks to other executives within the corporation who have hired foreign firms in order to find out typical fees. Which strategy for managing country risk is the American executive​ following?

proactive environmental scanning

Which one of the following is a global economic principle created to limit unrestricted trade while guarding​ home-country businesses from overseas​ competition?

protectionism

​________ are measurable limits set on the import of certain goods for a designated period of time.

quotas

Which one of the following is a major factor in the growth of global commerce and in rising incomes​ worldwide?

reducing trade barriers

As a way to anticipate​ risk, management participates in​ ________, which is used to evaluate possible risks and threats to the company.

scanning

South Korea faced a quota on the export of​ non-rubber footwear exported to the United States. By shifting manufacturing to​ rubber-soled shoes, South Korean firms greatly increased their footwear exports. Which one of the following strategies for responding to government intervention did the South Korean firms​ choose?

seeking favorable customs classifications

The Organization of Petroleum Exporting Countries​ (OPEC) is a dominant alliance that influences and dictates global oil​ prices, which in turn moves consumer prices and the overall cost of business. OPEC is an example of a​ ________.

special interest group

The national oil company of Mexico wants to build a pipeline to Guatemala. A U.S. environmental advocacy​ organization, Big​ Green, organizes protests against the pipeline due to fears that leaks might damage rain forests. Big Green is best described as a​ ________.

special interest group

________ include establishments such as OPEC and OECD that work to improve the development of specific communities.

special interest groups

____ are monetary or other resources granted to a company by a government to assist in the manufacturing and promotion of products at decreased prices to improve the​ company's success.

subsidies

​________ are taxes placed on imported goods that increase the final purchase price for consumers.

tariffs

​________ is the degree to which organizations disclose substantial information about their financial position and accounting measures.

transparency

If ABC International establishes export assembly locations in order to create mechanisms and completed goods that are destined for other​ countries, it is countering​ government-imposed regulations on trade by​ ________.

utilizing a foreign trade zone

Gaining political power in world affairs has enabled the EU to compete more effectively with the U.S. by​ ________.

developing a stronger defensive posture

Which term refers to exported goods being priced lower than their typical value whether in​ home-country markets or foreign​ markets?

dumping

Melissa Chitembo wants to internationalize her Canadian syrup business. Rather than expanding too far too​ fast, Melissa decides to market her syrup to new customers in the northern part of the U.S. Which one of the following BEST describes​ Melissa's actions?

Internationalization inside the economic blc

A ______ depends on the interactions of supply and demand in order to determine prices for products and services

Market economy

Which one of the following characteristics is related to economic freedoms?

Market forces and ability to easily implement commercial activities

Many Middle Eastern countries practice both civil law and Islamic law. In this​ case, under which legal system are these countries ultimately​ categorized?

Mixed system

​________ is the seizure of company assets with compensation.

Expropriation

​________ represent locations at the ports of entry in each country where government authorities inspect imported products and levy tariffs.

customs

​________ is made up of two critical​ features: (1) limited government and​ (2) the ability for citizens to own property and​ assets, and attain individual wealth.

A democracy

________ involves 21​ nations, from both sides of the​ Pacific, and aims for​ increased, unrestricted trade and economic alliances among member and potential member countries.

APEC

​________ is a process in which an unbiased third party listens to both sides of a case and makes a decision in favor of one party or the​ other, based on an impartial analysis of facts.

Arbitration

Yukiko​ Fujiwara's company operates stores all over the​ world, including in the nation of Tinhorn. But after recent unrest in​ Tinhorn, a dictator took over. The new​ president-for-life declared that all​ foreign-owned businesses must be taken over by government officials. The state began to regulate most aspects of public and private behavior. Which one of the following describes the political system in​ Tinhorn?

Authoritarianism

​________ is a governmental system that attempts to control most aspects of its​ citizens' conduct both publicly and​ privately, including their values and beliefs.

Authoritarianism

Which one of the following has occurred if consumers voluntarily refuse to patronize a certain business because consumers believe the business has acted​ inappropriately?

Boycott

Which legal system is based on a comprehensive structure where laws are clearly​ written, accessible, and divided into three​ categories: commercial,​ civil, and​ criminal?

Civil law

Which of the following represents a method of negotiation in which the objective is to settle any disagreements in a pleasant​ manner?

Conciliation

Which type of government seizure involves acquiring company possessions without any form of​ payment?

Confiscation

​________ assign​ rights, duties, and obligations to all parties involved in an agreement and include stipulations on the sale of​ goods, distribution of​ products, licensing,​ franchising, and joint ventures.

Contract laws

In the European​ Union, which one of the following makes decisions regarding economic​ policy, budgets, foreign​ policy, and the admission of new member​ countries?

Council of the European Union

Which one of the following officially bans imports from and exports to a specific country in an attempt to impose a political​ punishment?

Embargo

Which of the following is the​ world's most advanced and largest regional economic​ bloc?

European Union

Navrin Kumar wants to expand his​ Paris-based company into China. Through the French embassy in​ Beijing, Navrin finds a​ Shanghai-based company to act as part of a joint venture. Navrin hopes that the Chinese company will guide him through the complex legal and political environments in China. Which strategy for managing country risk is Navrin​ following?

Forming alliances with qualified local partners

Which one of the following was the first major effort to systematically reduce trade barriers​ worldwide?

GATT

Which of the following primarily focuses on ensuring the reduction of tariffs among certain countries and settling trade​ disagreements?

General Agreement on Tariffs and Trade

​________ involves government seizure of a whole​ industry, which may or may not include any form of payment.

Nationalization

The passage of which economic bloc was smoothed by the existence of the maquiladora​ program?

North American Free Trade Agreement (NAFTA)

Which of the following was formed by three countries to increase market​ entrance, remove barriers to​ trade, establish investment​ standards, and encourage bidding on government contracts within the three countries participating in​ it?

North American Free Trade Agreement (NAFTA)

Which one of the following is true of political and legal environments in international business?

Political and legal systems are interdependent

____ is a function of a legal system

Providing security for intellectual property

Which of the following includes organizations like​ NAFTA, the​ EU, and​ ASEAN?

Regional trade organizations

In​ Iran, systems are based on spiritual​ beliefs, ethical​ codes, and moral standards that are directed by a supreme being. Iran operates under​ ________.

Religious Law

The people of the new island nation of Lagoonia need to decide how to set up their legal system in terms of how it applies to international business and how it applies to the entirety of life on the island. After much debate and​ research, the Lagoonian people chose to emphasize transparency. A legislative committee wrote an extensive set of​ laws, which was then posted to the Internet so the people could read them and comment on them. The laws established an independent court system and police force. A few changes were made based on public comment. The result was the people were committed to living by and enforcing their laws. The nation of​ Lagoonia's legal system is founded upon which of the​ following?

Rule of Law

Which one of the following BEST explains why an American firm would establish a factory in the​ EU?

To obtain free trade access to the EU market

The​ ________ is a multinational organization of more than 160 member countries dedicated to reducing barriers to international business worldwide.

WTO

Which one of the following is a tariff imposed on goods brought into a country to offset subsidies awarded to manufacturers or exporters in the exporting​ country?

a countervailing duty

Due to the larger market size of an economic​ bloc, member country firms are able to reduce their product prices because they can​ ________.

attain economies of scale

In​ a(n) ________, which is the second level of regional​ integration, participating countries harmonize their external trade policies and adopt the same tariff and nontariff barriers on imports from nonparticipating countries.

customs union

In which stage of regional integration do member countries strive to have common fiscal and monetary​ policies?

economic union

Government intervention and trade barriers imposed by developed countries raise​ ______ for developing economies that supply them because tariffs are often disproportionately high.

ethical concerns

Which one of the following terms defines a government strategy aimed at handling or preventing the shipment of specific goods or trade with particular​ nations?

export control

Which of the following BEST defines​ maquiladoras?

export-assembly plants

Applying​ home-country laws to people and situations abroad is a practice known as​ ________.

extraterritorality

The Foreign Corrupt Practices Act forbids a U.S. businessperson from bribing or giving anything of value to a foreign government official for the purpose of influencing an official​ decision, such as granting a license to operate in a host country. This is an example of a U.S. law restricting U.S. behavior in foreign countries. The principle at work here is​ ________.

extraterritoriality

Japan's daitenhoo​ (large retail store​ law) restricts foreigners from opening​ warehouse-style stores. The law protects smaller shops by requiring​ large-scale retailers to obtain the approval of local​ retailers, a painstaking and​ time-consuming process. Which source of country risk arising from the​ host-country legal environment are foreign retailers facing in​ Japan?

foreign investment laws

A specific region that is located within a nation is treated as if it were outside the​ nation's borders. This region is designated to receive imported products that are not subject to tariffs and that are intended for assembly and subsequent​ re-export. Which term best describes this​ region?

foreign trade zone

The government of Nobula has created a specific region that is within Nobula but is treated as if it were outside the​ nation's borders. Firms use the region to receive imported parts for assembly and then to​ re-export the finished products. This region in Nobula can be described as​ a(n) ________.

foreign trade zone

In​ a(n) ________, barriers to trade within a participating country are reduced or​ eliminated, shared external barriers are​ established, and unrestricted movement of​ goods, services, and factors of production is permitted.

free trade area

Which of the following is a stage of regional integration in which member countries decide to remove tariffs and other barriers to trade within the​ bloc, but maintain trade barriers with nonmember​ countries?

free trade area

Although Belgium has a population of only 10​ million, EU membership gives Belgian firms access to nearly 500 million EU buyers. Based on this​ information, a Belgian firm primarily benefits from EU membership by​ ________.

having access to a larger market

Which one of the following represents government approval given to a company that allows it to bring in certain products from foreign​ countries?

import license

The World​ Bank, the World Trade​ Organization, and the United Nations Conference on Trade and Development are examples of​ ________.

international organizations

Which term refers to understanding and administering laws, regulations, and rules that are used to establish standards for conduct?

legal system


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