CBA 396 Chapter 6

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A comparison based on hourly wages is a reasonable guide to a need to protect domestic jobs.

False

A historical function of capitalist-- but not communist-- governments has been the protection of the economic activities within their geographic area of control

False

Businesses favor unstable governments b/c the present more profit oppurtunities

False

Country risk assessment is an evaluation that assesses a country's political situation and policies to determine how much risk exists of a change in that country's government.

False

County risk assessment is a measure of the threat of nationalization

False

Fair competition is a strong rationale for trade barriers

False

Former British prime minister Tony Blair led the privatization movement

False

Kidnap, ransom, and extortion are techniques often used by terrorists against which no insurance is available,

False

One example of nationalization of private companies is the nationalization of French-owned firms in Europe after World War II.

False

One way that the WTO defines dumping is the selling of a product abroad for less than the average cost of production in the importing nation.

False

Only in communist countries do governments own the factors of production.

False

Paying ransom makes sense because a life is saved and the payments can be traced

False

Protection of infant industries through trade restrictions is used only in developing nations.

False

Retaliatory trade restrictions are not made for dumping because price competition is protected by the WTO.

False

Sanctions are a trade restriction that is effective in forcing change

False

Terrorists avoid kidnapping because the repercussions can be harmful to their movement.

False

The government officials who make decisions about import restrictions are particularly sensitive to their country's broad population of consumers, who will be hurt by international competition.

False

The length of the investment in a foreign country has no impact on the risk assessment for that investment. What matters is the economic and political situations in the country.

False

The national defense argument for trade restrictions is based on the development level of the country

False

The only reason firms are nationalized is to spread a socialist-communist ideology

False

The practice of country risk assessment is an exercise in xenophobic and ethnocentric thinking

False

The types of information a firm will need to judge country risks vary according to the nature of its business and the amount of money invested.

False

The utility of risk analyses of social, political, and economic factors increases rapidly over longer time spans.

False

Unlike the topography, the political climate of a country has relatively little influence on its exports

False

When government-owned companies compete with private companies, the private companies have the advantage.

False

When people are kidnapped for ransom, the right response is to pay the ransom, get the hostages released, then relatialte

False

Country risks are increasingly political in nature

True

Policy continuity and government stability are more important to a business that the type of political system.

True

To hedge the terrorism risk, there are insurance, anti-terroist schools, and even companies to handle negotiations

True

To protect an infant industry, trade restrictions might be effective

True

Trade restrictions violate the spirit of the WTO

True

U.S. ocean shipping companies are benefiting from U.S. government subsides

True

When the U.S. military contracts out security details in war zones, it is engaged in privatization

True

Zimbabwe's government offers an example of government instability

True


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