BUS 115 CH 11-14 Test

General practices between nations that guide their business relationships

Customs

Insider trading is always illegal, whether disclosed or not. Select one: True False

False

The Securities Exchange Act of 1934 helped move the US economy to a laissez faire approach with less governmental involvement or regulation. Select one: True False

False

The Sherman Antitrust Act, passed in 1914, focuses on unfair methods of competition and labor practices that impact commerce. Select one: True False

False

The Treaty Clause gives the authority to the states to enter treaties with other nations. Select one: True False

False

The misrepresentation of a product, service, or price

False Advertising

"Limited time offers" that last forever

False Sale

Enables Congress to "regulate commerce with foreign nations"

Foreign Commerce Clause

When the same product is sold to different buyers at different prices

Price Discrimination

Created to address widespread systemic issues in an industry

Trade Rules

Keeping the public up to date and informed of changes that might impact securities prices

Transparency

States that the president has the power "by and with the advice and consent of the senate" to create treaties with other nations

Treaty Clause

In what way can an FTC or DOJ remedy force a company to give up one or more of its operating functions? a. Dissolution b. Bankruptcy c. Divestiture d. Discrimination

c. Divestiture

Restriction that is short-term and limited in scope

Ancillary Restraint

Selling one item in place of another, e.g., one that is higher priced, lower quality and/or less in demand

Bait and Switch

Eliminates and prevents "anticompetitive" business practices related to the enforcement of antitrust laws

Bureau of Competition

Provides subject matter expertise regarding the economic impacts of FTC legislative activity

Bureau of Economics

The "stock market" is an example of: a. Primary markets b. Secondary markets c. Initial public offerings d. Insider markets

b. Secondary markets

If a country violates an international law, actions by other nations may include: a. Persuasive tactics b. Economic sanctions c. War d. Boycotts e. All of these

e. All of these

One of the most important considerations for international business is understanding that companies operating in foreign nations are not subject to the laws of those nations. Select one: True False

False

A federal agency that enforces consumer protection laws

Federal Trade Commission

States that the US and England will not pass legal judgement on public acts committed by a recognized government if those acts occur within that government's own territory

Act of State Doctrine

Intended to regulate economic competition in an effort to maintain fair trade practices

Antitrust laws

When businesses work together to strengthen their resources and achieve a shared goal

Collective Action

Ensures that consumers have the opportunity to make informed, rational decisions about the goods and services they purchase

Consumer Protection Act

Officers, directors, and beneficial owners of a company who own more than 10% of a class of securities

Corporate insiders

Raising small amounts of money from many people to fund a venture or project, usually over the internet

Crowdfunding

States that foreign nations are not subject to U.S. jurisdiction when certain circumstances are applied

Doctrine of Sovereign Immunity

International law disputes are governed by the single world court implementing the single authoritative legislative source or global business affairs. Select one: True False

False

It is important for the plaintiff to show the company intended to be unfair or deceptive to seek recourse for unfair trade practices. Select one: True False

False

Someone who is charged with the responsibility to act in the best interest of the other party

Fiduciary

The first sale of shares of ownership of a company through securities

Initial public Offering

Buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, on the basis of material, nonpublic information about the security

Insider Trading

Boards of competing companies with common members on each board

Interlocking Directorates

The policies and procedures that govern relationships among nations

International Law

An agreement formed by several nations

Multilateral

Restriction that has a long-term impact without boundaries

Naked Restraint

States that nations will defer to the laws and decrees of other nations when those laws are consistent with their own

Principle of Comity

An important legal principle that allows nations to enter negotiated treaties with other countries and honor territorial boundaries

Sovereignty

Allows shareholders to vote on issues that will be decided at a stockholder meeting

Proxy Statements

Defines business exchanges when countries lower import duties, or other trade barriers, in exchange for mutual arrangements extended by the other country

Reciprocity

If a company learned it had an overly-aggressive and sometimes deceitful sales representative targeting a group of people, the most appropriate course of action would be: a. Place the employee on administrative leave b. Send an apology letter to the targeted audience c. Remove the employee, contact the consumers impacted to offer a refund for products they were pressured into purchasing, and train sales representatives d. Increase training on sales calls

Remove the employee, contact the consumers impacted to offer a refund for products they were pressured into purchasing, and train sales representatives

An exemption from insider trading charges for compliant pre-arranged equity trades

Safe Harbor

Private organizations that create and enforce industry standards

Self-Regulatory Organizations

Prohibits all contracts and interactions that unreasonably restrain foreign trade and trade between states

The Sherman Act

Antitrust provisions were originally created to prohibit business trusts from working to shut down competition. Select one: True False

True

One of the most important governing documents for international law is the United Nations Convention on Contracts for the International Sale of Goods. Select one: True False

True

The Federal Trade Commission can work to seek voluntary compliance by businesses, file administrative complaints, or can initiate federal action and lawsuits. Select one: True False

True

The Federal Trade Commission has the authority to investigate reports from several sources, including those from consumers, businesses, and even media outlets. Select one: True False

True

The goals of the Foreign Commerce Clause are to allow US businesses to actively negotiate and implement taxes or other regulations as they relate to international commerce while not burdening foreign commerce. Select one: True False

True

The use of deceptive, fraudulent, or unethical methods to gain business advantage or to cause injury to a consumer

Unfair Trade Practices

Created with the goals of maintaining global peace and security, promoting economic and social cooperation, and protecting human rights, especially related to women and children

United Nations

Primary sources of international law include: a. Customs and treaties b. The US Constitution c. The Compilation of State Law d. Doctrine of Sovereign Comity

a. Customs and treaties

In what way can an FTC or DOJ remedy terminate the right of a partnership to exist? a. Dissolution b. Divestiture c. Discrimination d. Ancillary restraint

a. Dissolution

Publicly owned companies of certain size are called reporting companies and must file periodic disclosures that might include: a. Forms 10-K, 10-Q, 8-K b. Form 1040 c. Report SRO d. Reports of sideways trading

a. Forms 10-K, 10-Q, 8-K

Large investors who are deemed to have sophisticated knowledge of securities such that they do not need the same level of protection as general investors are known as: a. Institutional investors b. Corporate insiders c. Nonpublic companies d. Secondary market insiders

a. Institutional investors

When a beach outlet runs a "going out of business" sale with no intention of closing the store, this is an example of: a. Misleading price information b. Price gouging c. Bait and switch d. Industry monopoly

a. Misleading price information

The Federal Trade Commission was created in 1914 to address the problem of: a. Monopolies and trusts b. Industrialization taking over jobs c. Climate change d. A stagnant economy

a. Monopolies and trusts

In considering trade restraint, the courts used as the standard in evaluating potential restriction? a. Rule of reason b. Prima facie c. Price discrimination d. Divestiture

a. Rule of reason

Examples of unfair trade practices include: a. Failing to disclose pertinent product information b. Running a "going out of business" sale with no intentions of closing c. Telemarketing pressure targeting senior populations d. All of these e. None of these are technically illegal

d. All of these

Limitations on antitrust laws might include: a. Cooperative Research b. Fisheries c. Agriculture d. All of these e. None of these

d. All of these

President Franklin D. Roosevelt signed the Securities Exchange Act of 1934 due to recognizing the stock market crash of 1929 was caused by: a. Wild speculation b. Large and sudden fluctuation in market prices c. Manipulations of securities d. All of these e. None of these

d. All of these

Primary forms of trade restraint include: a. Company mergers b. Price-fixing c. Monopolies d. All of these

d. All of these

Who might have access to material nonpublic information in a company needing to be mindful of their own trading activities? a. Large shareholders b. Company officers c. Directors d. All of these e. None of these

d. All of these