Module 5

Country risks are hardly ever political in nature.

F

Fair competition is a strong rationale for trade barriers. With fair competition, there will be increased efficiency for everyone.

F

Firms are nationalized when the goal of the government is to spread a socialist-communist ideology.

F

The national defense argument for trade restrictions is based on the country's level of development and foreign direct investment.

F

Unpredictable government actions create many business opportunities.

F

When people are kidnapped for ransom, all governments agree that the right response is to pay the ransom, get the hostages released, and then retaliate.

F

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

F

Businesses favor stable governments because fiscal, monetary, and political policies are then predictable.

T

Governments own the factors of production not only in communist countries, but in many market-based countries.

T

Kidnap, ransom, and extortion are techniques often used by terrorists against which insurance is available.

T

One historic function of government has been to create stable and predictable environments, in order to protect economic activities within its borders.

T

Sanctions are a type of trade restriction generally ineffective in forcing change in other countries.

T

The practice of country risk assessment is an exercise in understanding the local environment.

T

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

T