Int Business Chapter 2

Jewish law is an example of a _____ law system. A. autocratic B. civil C. common D. theocratic E. universal

d) theocratic

The sale of state-owned enterprises to independent, nonpublic investors is referred to as: A. privatization. B. nationalization. C. collectivism. D. communalism. E. public action.

a) privatization

A(n) _____ is a person who believes in public ownership of the means of production for the common good of nation. A. socialist B. capitalist C. individualist D. monarchist E. feudalist

a) socialist

In the context of individualism, which of the following is inconsistent with the works of the ancient Greek philosopher Aristotle? A. Guaranteeing individual freedom B. Government dictating what is in best interest of society C. Guaranteeing self-expression D. Committing to private ownership E. Treating individual diversity as desirable

b) Government dictating what is in best interest of society

_____ is the most widely practiced theocratic legal system in the modern world. A. Christian law B. Islamic law C. Jewish law D. Hindu law E. Buddhist law

b) Islamic law

Which of the following terms best represents the system of government in a nation? A. Common system B. Political system C. Environmental system D. Command system E. Social system

b) Political System

In comparison to market economies, command economies lack: A. government interference in allocation of resources. B. dynamism and innovation. C. concern for the interests of the nation. D. commitment to communism. E. any opposition to private ownership.

B. dynamism and innovation.

When firms do not wish to accept the rules of the CIGS, they often opt for _____ to settle contract disputes. A. UN involvement B. arbitration C. collective bargaining D. the common law system of the U.S. E. Islamic law

b) arbitration

The term political economy is used to stress the fact that the political, economic, and legal systems of a country are independent of each other.

False

Which of the following terms refers to a political system in which government is by the people, exercised either directly or through elected representatives? A. Despotism B. Democracy C. Totalitarianism D. Theocracy E. Communism

b) democracy

Which of the following can be traced to the ancient Greek philosopher, Aristotle? A. Collectivism B. Individualism C. Socialism D. Totalitarianism E. Communism

b) individualism

Which of the following terms best defines the relationship between the level of corruption and economic growth rate in a country? A. Directly proportional B. Inversely proportional C. Independent D. Positive correlation E. Zero correlation

b) inversely proportional

In comparison to contracts in a civil law system, contracts drafted under a common law framework tend to be: A. shorter in length. B. more specific. C. more inflexible. D. less expensive. E. less detailed

b) more specific

Small legally acceptable payment made to speed up the issuance of permits or licenses, or process paperwork is typically referred to as a(n): A. facilitating payment. B. negative externality. C. opportunity cost. D. social cost. E. accrued expense.

a) facilitating payment

Patents, copyrights, and trademarks establish ownership rights over _____ property. A. intellectual B. real C. tangible D. non-performing E. stolen

a) intellectual

A legal system which is based primarily on religious teachings is referred to as the: A. civil law system. B. theocratic law system. C. common law system. D. precedent law system. E. public law system.

b) theocratic law system

_____ is a form of government in which one person or political party exercises absolute control over all spheres of human life and prohibits opposing political parties. A. Capitalism B. Totalitarianism C. Pure democracy D. Republicanism E. Representative democracy

b) totalitariansim

Which of the following legal systems is most likely to be based on tradition, precedent, and custom? A. Common law B. Civil law C. Autocracy law D. Monarchy law E. Universal law

a) common law

When intellectual property laws are lax, firms are at a greater risk of having their ideas stolen by local entrepreneurs.

True

States that limit the freedom of religious expression with laws based on religious principles, most likely follow the political system of: A. theocratic totalitarianism. B. communist totalitarianism. C. right-wing totalitarianism. D. pure democracy. E. representative democracy.

A. theocratic totalitarianism.

Products of the mind, such as computer software, a screenplay, a music score, or the chemical formula for a new drug, constitute: A. assets which receive no protection under law. B. non-performing assets. C. tangible assets. D. an intellectual property. E. a real property.

D. an intellectual property.

Which of the following is a feature of representative democracy? A. Restrictions on an individual's right to freedom of expression, opinion, and organization B. Inability of the citizens to vote out elected representatives who fail to perform their job adequately at the next election C. An unlimited term for elected representatives D. A court system that is linked to the political system E. A nonpolitical police force and armed service

E. A nonpolitical police force and armed service

Which of the following is true about legal systems? A. All countries have the same, uniform legal environment. B. Unlike the economic system of a country, the legal system is independent of the country's political system. C. The government of a country defines the legal framework within which firms do business. D. The attractiveness of a country as an investment site or market is unaffected by its legal system. E. Collectivist-inclined totalitarian states tend to enact laws that are pro-private enterprise.

C. The government of a country defines the legal framework within which firms do business.

A _____ grants the inventor of a new product or process exclusive rights for a defined period to the manufacture, use, or sale of that invention. A. copyright B. trademark C. patent D. warranty E. service mark

C. patent

After the collapse of communism in Dehran, successful business owners often had to pay "protection money" to the mafia or face violent retribution. In the context of property rights, the behavior of the mafia is an example of: A. active violation. B. public action. C. private action. D. boundary spanning. E. industrial espionage.

C. private action.

Initech Incorporated, a multinational giant, runs a number of diversified businesses. Which of the following can be considered as an intellectual property of the firm? A. Income arising from renting lands and buildings B. Profits arising from the sale of agricultural crops C. Interest earned by lending capital to other firms D. Innovations and capabilities, and skills of the employees E. Investments made in raw materials and machinery

D. Innovations and capabilities, and skills of the employees

Which of the following statements is most likely to be true regarding private ownership? A. It reduces a nation's dynamism and its investments in innovation and creativity. B. It is most commonly found in command economies. C. It eliminates competitors and reduces pressure to lower production costs. D. It gives entrepreneurs an incentive to search for better ways of serving consumer needs. E. It is based on the philosophy that "the good of society is more important than the interests of an individual."

D. It gives entrepreneurs an incentive to search for better ways of serving consumer needs.

Which of the following statements is true about political systems? A. The political system of a country is independent of its economic and legal systems. B. The political system of a country is of no importance to international business. C. It is not possible to have democratic societies that emphasize a mix of collectivism and individualism. D. it is possible to have totalitarian societies that are not collectivist. E. The societal culture of a country does not influence its political system.

D. it is possible to have totalitarian societies that are not collectivist.

In a _____, individuals periodically elected by citizens form a government to make decisions on behalf of the electorate. A. pure democracy B. communist totalitarianism C. right-wing totalitarianism D. representative democracy E. theocratic totalitarianism

D. representative democracy

In the context of property rights, which of the following best exemplifies private action? A. Levying excessive taxes B. Requiring expensive licenses or state permits from private property holders C. Taking assets into state ownership without compensating the owners D. Government bureaucrats demanding bribes from businesses in return for the rights to operate in a country E. Business owners stealing their competitors trade secrets and intellectual properties

E. Business owners stealing their competitors trade secrets and intellectual properties

Compared to common law system, it is more expensive to draw up contracts in a civil law jurisdiction.

False

In a representative democracy, elected representatives who fail to perform their job adequately cannot be voted out of office at the next election.

False

Political systems that emphasize collectivism tend to be democratic, while political systems that place a high value on individualism tend to be totalitarian.

False

Private action to violate property rights occurs when public officials, such as politicians and government bureaucrats, extort income, resources, or the property itself from property holders.

False

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

False

Karl Marx advocated state ownership of the basic means of production, distribution, and exchange

True

The Cold War was in many respects a war between collectivism, championed by the former Soviet Union, and individualism, championed by the United States.

True

When firms do not wish to accept the Contracts for the International Sale of Goods, they often opt for arbitration by a recognized arbitration court to settle contract disputes.

True

When product safety laws are tougher in a firm's home country than in a foreign country, the ethical thing to do is to adhere to home-country standards.

True

In comparison to pure command economies, free market economies lack: A. private ownership. B. incentives for entrepreneurs. C. incentives to improve products and processes. D. government control over production and pricing. E. vigorous free competition between producers.

d) government control over production and pricing

In mixed economies, governments sometimes tend to take into state ownership troubled firms whose continued operation is thought to be vital to national interests. Once a government takes into state ownership such troubled firms, they are said to be _____. A. privatized B. decentralized C. liberalized D. nationalized E. deregulated

d) nationalized

In the context of property rights, _____ refers to theft, piracy, blackmail, and the like by private individuals or groups. A. private consumption B. Private practice C. privacy tort D. private action E. privacy violation

d) private action

The bundle of 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 are called _____ rights. A. civil B. political C. shareholder D. property E. public

d) property

Which of the following has been advocated by Karl Marx? A. Capitalist Society B. Individualism C. Selling state-owned enterprises to private investors D. Socialism E. Private profit over public good

d) socialism

A totalitarian political system in which a party, group, or individual that represents the interests of a particular ethnic group monopolizes political power is referred to as: A. theocratic totalitarianism. B. communist totalitarianism. C. right-wing totalitarianism. D. tribal totalitarianism. E. democratic totalitarianism.

d) tribal totalitarianism

Which of the following is most likely to be advocated by individualism? A. Communal property is more highly productive than private property. B. Public good should be preferred over private profit. C. State-owned companies should monopolize certain industries. D. The welfare of society is best served by some collective body such as government. E. Free market ideologies should be followed for achieving better standards of living.

A. Communal property is more highly productive than private property.

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. Contracts for the International Sale of Goods B. Bill of Exchange C. United Nations Charter D. International Forwarding Agent Contract E. International Promissory Note

A. Contracts for the International Sale of Goods

The fascist regimes that ruled Germany and Italy in the 1930s and 1940s had adopted: A. right-wing totalitarianism. B. theocratic totalitarianism. C. representative democracy. D. pure democracy. E. totalitarian democracy.

A. right-wing totalitarianism.

_____ attempt to achieve the same ideologies as that of the communists without violent revolution and totalitarian dictatorship. A. Pure capitalists B. Social democrats C. Individualists D. Anarchists E. Aristocrats

B Social Democrat

The benefits, costs, and risks associated with doing business in a country are independent of that country's political, economic, and legal systems.

False

_____ is a form of totalitarianism which advocates that socialism can be achieved only through a totalitarian dictatorship. A. Tribal totalitarianism B. Democratic totalitarianism C. Communist totalitarianism D. Theocratic totalitarianism E. Right-wing totalitarianism

C. Communist totalitarianism

A common feature of many right-wing dictatorships is: A. total restriction on individual economic freedom. B. strong commitment to socialist or communist ideas. C. governments that are made up of military officers. D. politicians from a particular tribe dominating the political system. E. the direct involvement of the citizens in decision making.

C. governments that are made up of military officers.

The common law system enjoys a degree of flexibility not found in other systems because : A. it is usually found in democratic republics. B. it originated from Great Britain and can be found in almost all of its former colonies. C. it is interpreted by the law courts with regard to tradition, precedent, and custom. D. it is based on a detailed set of laws organized into codes. E. it has originated recently; almost a decade ago.

C. it is interpreted by the law courts with regard to tradition, precedent, and custom.

Which of the following systems is a part of the political economy? A. Religious system B. Value system C. Demographic system D. Legal system E. Technological system

D) Legal system

In most totalitarian states: A. free and fair elections are not denied to the citizens. B. there is free access to state information. C. all the basic civil liberties are granted to the citizens. D. the right to freedom of expression and organization is not curbed. E. media are heavily censored.

E. media are heavily censored.

By adopting the Contracts for the International Sale of Goods (CIGS), a nation signals to other adopters that it will treat the convention's rules as part of its law.

True

Contracts drafted under a common law framework tend to be very detailed with all contingencies spelled out.

True

In practical terms, individualism translates into an advocacy for democratic political systems and market economics.

True

Intellectual property laws stimulate innovation and creative work

True

International businesses lobby their respective governments to push for international agreements to ensure that intellectual property rights are protected and that the law is enforced.

True

Islamic law is primarily a moral rather than a commercial law and is intended to govern all aspects of life.

True

Plato did not equate collectivism with equality

True

A _____ law system is based on a detailed set of laws organized into codes. A. civil B. theocratic C. common D. traditional E. precedent

a) civil

Which of the following is true about property rights? A. Ideas are not considered a part of "property." B. The legal systems defining and protecting property rights are the same worldwide. C. In China, still nominally a communist state, individuals do not have the same legal protection for their property as the state has. D. A "private action" to violate property rights is said to have occurred when politicians and government bureaucrats extort income, resources, or the property itself from property holders. E. In many countries, laws protecting property rights are not enforced by the authorities and the rights are violated.

E. In many countries, laws protecting property rights are not enforced by the authorities and the rights are violated.

Which of the following best exemplifies facilitating or expediting payments in business? A. Making payments to government officials not to cancel the business license after violating local laws B. Paying a lump sum amount in order to win a government tender for road construction in a foreign country C. Making unsolicited payments to the concerned officers in return for employing child labor D. Making payments to customs officials in order to ship pirated merchandise E. Making small payments to government officials in order to speed up the work they are already obligated to perform

E. Making small payments to government officials in order to speed up the work they are already obligated to perform

By the mid-1990s, communism was rising worldwide

False

Collectivist-inclined totalitarian states tend to enact laws that severely restrict private enterprises, whereas the laws enacted by governments in democratic states, where individualism is the dominant political philosophy, tend to be pro-private enterprise and pro-consumer. This indicates that the: A. economic system of a country is independent of its legal system. B. legal system of a country is not influenced by the prevailing political system. C. legal system does not affect the attractiveness of a country as an investment site or market. D. all the countries have the same legal environments. E. the legal framework of a country reflects the rulers' dominant political ideology.

E. the legal framework of a country reflects the rulers' dominant political ideology.

Modern socialism traces its intellectual roots to: A. Aristotle. B. David Hume. C. Karl Marx. D. Adam Smith. E. Milton Friedman.

c) Karl Marx

Which of the following does the U.S. law and OECD convention allow as an exception? A. Bribing a foreign government official to obtain a contract B. Failure to keep records that would reveal if a violation of the Foreign Corrupt Practices act has occurred C. Grease payments or speed money D. Private action E. Breach of the rule of law

C. Grease payments or speed money

Which of the following statements is true about the difference between contracts in common law and civil law systems? A. Contracts drafted under a common law system tend to be longer than those drafted under a civil law system. B. Contracts drafted under a civil law system tend to be more specific than those drafted under a civil law system. C. It is more expensive to draw up contracts in a civil law system than in a common law system. D. Resolving contract disputes tend to be less adversarial in common law systems than in civil law systems. E. Civil law systems have the advantage of greater flexibility and allow for judges to interpret a contract dispute in light of the prevailing situation but this feature is absent in common law systems.

A. Contracts drafted under a common law system tend to be longer than those drafted under a civil law system.

In the context of "knowledge" economy of the twenty-first century, which of the following statements is true about intellectual property? A. Intellectual property has become an increasingly important source of economic value for businesses. B. Protecting intellectual property has become increasingly easy in the twenty-first century. C. Intellectual property laws limit the creativity and the ability of people to search for novel ways of doing things. D. Firms always choose to stay out of countries where intellectual property laws are strict. E. Companies in a country are more likely to commit themselves to extensive basic research if the country prohibits the use of patents.

A. Intellectual property has become an increasingly important source of economic value for businesses.

In the United States, the Foreign Corrupt Practices Act was passed during the 1970s following revelations that: A. U.S. companies had bribed government officials in foreign countries in an attempt to win lucrative contracts. B. U.S. companies were involved in bribing U.S. government officials in cases related to major corporate and accounting scandals. C. U.S. government bureaucrats demanded bribes from U.S. companies in return for the permit to operate in a foreign country. D. several companies were selling their products at lower prices in foreign countries than in the United States. E. successful business owners in the U.S. often had to pay "protection money" to the Mafia or face violent retribution.

A. U.S. companies had bribed government officials in foreign countries in an attempt to win lucrative contracts.

Democracy, in its purest form, is based on the belief that: A. citizens should be directly involved in decision making. B. political freedom of the citizens should be limited. C. citizens are responsible for their own economic health and thus need no government. D. individual freedom in the economic sphere should be restricted. E. one person should have an absolute control over all the citizens of a nation.

A. citizens should be directly involved in decision making.

The philosophy behind intellectual property laws is to: A. reward the originator of a new invention, book, musical record, and the like for his or her idea and effort. B. protect the consumers from being subjected to business malpractice. C. safeguard a firm and its officers from being responsible for injury, death, or damage caused by the firm's product. D. eliminate monopoly in international trade. E. ensure that the rights to manufacture, use, or sell an invention are made available to the whole society.

A. reward the originator of a new invention, book, musical record, and the like for his or her idea and effort.

In which countries are we likely to find free market economies? A. Countries where the good of the society has precedence over private profit B. Countries where individual goals are given primacy over collective goals C. Countries where state-owned enterprises have monopoly in certain industries D. Countries that have adopted communism as their political system E. Countries where the government plans the goods and services produced

B. Countries where individual goals are given primacy over collective goals

Which of the following law systems is most likely to be used by a law court if it solves a complicated case related to property rights, by basing his judgment on similar, old cases that have come before the courts? A. Theocratic law system. B. Civil law system C. Precedent law system D. Religious law system E. Monarchy law system

C. Precedent law system

As per the U.S. law and OECD convention, which of the following will most likely to be considered as a grease payment? A. Gold Fire Inc. paid a fine of $2500 for violating the labor laws in a foreign country. B. Gold Fire Inc. made a small payment of $20 to speed up some paper work related to tax returns in a less developed country. C. The proprietor of Gold Fire Inc. made payments to the Mafia as a protection against violent retribution. D. Gold Fire Inc. gave gift vouchers to all its product wholesalers in order to promote the product. E. Gold Fire. Inc made an unrecorded payment to one of its accountants in return for window dressing the company's accounts.

B. Gold Fire Inc. made a small payment of $20 to speed up some paper work related to tax returns in a less developed country.

Which of the following is true about the three broad types of economic systems? A. For pure market economy to function efficiently product supply must be restricted. B. In a command economy, state-owned enterprises have little incentive to control costs and be efficient. C. The sole role of government in a command economy is to encourage vigorous free and fair competition between private producers. D. Mixed economies were once uncommon throughout much of the world, although they are becoming much popular now. E. Production in command economies is determined by the interaction of supply and demand and signaled to producers through the price system.

B. In a command economy, state-owned enterprises have little incentive to control costs and be efficient.

Silver Tape Corporation has developed a new type of adhesive tape. Which of the following types of legal protections can grant the company exclusive rights for a defined period to the manufacture, use, or sale of the new adhesive tape? A. Warrant B. Patent C. Copyright D. Trademark E. Writ

B. Patent

_____ generally permits individual economic freedom, but restricts individual political freedom on the grounds that it would lead to the rise of communism. A. Pure democracy B. Right-wing totalitarianism C. Free market capitalism D. Representative democracy E. Communist totalitarianism

B. Right-wing totalitarianism

When state officials, such as politicians and government bureaucrats, violate property rights by extorting income, resources, or the property itself from property holders, it is described as: A. patents violation. B. public action. C. public servitude. D. private action. E. private governance.

B. public action.

The Republic Of Marwa has decided to open its economy to globalization. Which of the following will facilitate this decision of Marwa? A. A strong commitment to communism B. A strong presence of private action in the nation C. Adopting the Contracts For the International Sale of Goods (CIGS) D. Creating a national environment that promotes public action E. Breaking the rule of law

C. Adopting the Contracts For the International Sale of Goods (CIGS)

Which of the following is true about the three main types of legal systems? A. Judges under a civil law system have more flexibility than those under a common law system. B. The common law system evolved in the United States over hundreds of years. C. Although Islamic law is primarily concerned with moral behavior, it has been extended to cover certain commercial activities. D. A theocratic law system is based on a detailed set of laws organized into codes. E. Common law cannot be altered, clarified, or amended to deal with new situations.

C. Although Islamic law is primarily concerned with moral behavior, it has been extended to cover certain commercial activities.

Which of the following is true about communism? A. Communism propagates the idea of "private profit rather than public good." B. By the mid-1990s communism started rising worldwide. C. China has moved sharply away from strict adherence to communist ideology in the economic sphere. D. Communists committed themselves to achieving socialism by turning their backs on violent revolution and dictatorship. E. Communism stresses that the interests of the individual should take precedence over the interests of the state.

C. China has moved sharply away from strict adherence to communist ideology in the economic sphere.

In the 1970s, the United States passed the _____ following revelations that U.S. companies had bribed government officials in foreign countries in an attempt to win lucrative contracts. A. International Sale of Goods Act B. Foreign Exchange Management Act C. Foreign Corrupt Practices Act D. Sarbanes-Oxley Act E. Foreign Investment in Real Property Tax Act

C. Foreign Corrupt Practices Act

Which of the following best exemplifies public action? A. The mafia in Cedia Republic demands "protection money" from successful domestic business owners. B. Cedian proprietors in the hospitality industry often complain about protection rackets by criminal groups. C. Government bureaucrats demand bribes from international businesses in return for the rights to operate in Cedia Republic. D. The Cedian government has been criticized for its inability to curb theft of trade secrets of international businesses by private domestic owners. E. To promote the Cedian culture, the government has made Cedian movies, which are based on Cedian history, tax-free.

C. Government bureaucrats demand bribes from international businesses in return for the rights to operate in Cedia Republic.

_____ argued that private property is more highly productive than communal property and will thus stimulate progress. A. Aristotle B. Friedrich Engels C. Plato D. Karl Marx E. Charles Darwin

a) Aristotle

In a pure _____ 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. command B. market C. mixed D. laissez-faire E. deregulated

a) command

In the early twentieth century, the socialist ideology split into two broad camps and the people who believed that socialism could be achieved only through violent revolution and totalitarian dictatorship were referred to as: A. communists. B. capitalists. C. democrats. D. individualists. E. anarchists.

a) communists

The Boldovian government took Sea Lion Inc., a domestic, private shipbuilding firm, into state ownership to save the company from bankruptcy. However, the other private competitors in the shipbuilding industry were raged at this decision of the government. As a result, the government had to reduce the tax burden on all other private shipbuilding firms so that both the state-owned enterprise and private firms could co-exist. According to this information, Boldovia has most likely adopted a _____ economy. A. mixed B. market-based C. command D. laissez-faire E. communist

a) mixed

When _____ is emphasized, the needs of society as a whole are generally viewed as being more important than individual freedoms. A. democracy B. collectivism C. individualism D. capitalism E. privatization

b) collectivism

A(n) _____ is built upon the ideals of an individual's right to freedom of expression and organization, a free media, and regular elections. A. autocracy B. representative democracy C. theocracy D. aristocracy E. monocracy

b) representative democracy

_____ attempt to achieve the same ideologies as that of the communists without violent revolution and totalitarian dictatorship. A. Pure capitalists B. Social democrats C. Individualists D. Anarchists E. Aristocrats

b) social democrats

A _____ economy is an economic system in which the interaction of supply and demand determines the quantity in which goods and services are produced. A. barter B. command C. market D. regulated E. centrally planned

c) Market

In the country of Normian Republic, an individual's right to own land is restricted to a large extent on the basis that it runs counter to "the common good." In this context, which of the following is most likely to be the political system adopted by Normian Republic? A. Individualism B. Democracy C. Collectivism D. Capitalism E. Protectionism

c) collectivism

In the context of common law, which of the following terms refers to the ways in which laws are applied in specific situations? A. Tradition B. Precedent C. Custom D. Interpretation E. Culture

c) custom

The Cedian government believes that its citizens should have complete freedom in their economic and political pursuits, and the Cedian ideology is "private profit over public good." In this context, it can be said that Cedia most likely follows the philosophy of: A. totalitarianism. B. socialism. C. individualism. D. communism. E. Marxism.

c) individualism

In practical terms, _____ translates into an advocacy for democratic political systems and free market economics, which in general creates the most favorable environment for international businesses to operate in. A. collectivism B. totalitarianism C. individualism D. communism E. socialism

c) individualsim

In a _____ economy, certain sectors of the economy are left to private ownership and free market mechanisms, while in other sectors there is significant state ownership and government planning. A. command B. pure market C. mixed D. centrally planned E. laissez-faire

c) mixed

In a _____ economy, all businesses are state owned, the rationale being that the government can then direct them to make investments that are in the best interests of the nation as a whole rather than in the interests of private individuals. A. free market B. deregulated C. pure command D. mixed E. laissez-faire

c) pure command