CBA 300 - Exam 2 (Module A, Ch. 5-7)

Javabucks in China: In January 2006, a Shanghai court said Coffeebux's decision to use the logo and similar sounding name to Javabucks was

"clearly malicious." Explanation: In January 2006, a Shanghai court said that Coffeebux's decision to use the logo and similar sounding name to Javabucks was ''clearly malicious,'' which made it improper competition.

Which of the following are examples of local laws in other countries and their associated penalties? (Check all that apply.)

-A British subject with a history of serious mental illness was executed in China for carrying heroin. -A foreigner in Japan was arrested for taking out his garbage without having his alien registration card. -Saudi Arabia enforces sanctions against wearing revealing clothing.

Which of the following are members of Mercosur, the Common Market of the South? (Check all that apply.)

-Argentina -Paraguay -Brazil

Which three countries comprise the North American Free Trade Agreement? (Check all that apply.)

-Canada -Mexico -United States

Which of the following statements accurately characterize civil law? (Check all that apply.)

-Civil law tends to be less adversarial than common law. -Judges often actively question the prosecution and defense.

A(n) _______ _______ assessment reviews a country's economic situation and politics to determine how much risk to employees, property, and investment exists for firms doing business there.

-Country -Risk

Understanding the Environment in Economic Analyses Force - Environment Type

-Decision by government to control interest rates in foreign markets. - Foreign Environment -Affiliate in one country does business in another country. - International Environment

Which of the following statements characterize antitrust laws in the United States and the European Union? (Check all that apply.)

-European Union antitrust law focuses on the industry's competitive structure. -U.S. antitrust law focuses on the impact on the consumer. -U.S. antitrust law adopts the per se concept. -European Union antitrust law allows for market dominance.

The Atlas conversion factor differs from purchasing power parity in that it reduces the impact of _________ _________ fluctuations.

-Exchange -Rate

The three areas of integration established in the European Union are _________. (Check all that apply.)

-Foreign policy -Domestic affairs -Economic

The two basic types of institutions are ______ and _______.

-Formal -Informal

Which of the following can an international manager assume when analyzing the economy? (Check all that apply.)

-GNI provides a snapshot view of economic growth. -A rapidly growing economy often indicates an increase in foreign direct investment.

Which of the following result when a country's legal system is based on the rule of law? (Check all that apply.)

-Human rights are protected. -investors know their interests are protected. -Foreign investment is encouraged.

Which of the following are part of a nation's underground economy? (Check all that apply.)

-Illegal drugs -Illegal gambling -Unreported income -Human trafficking

Which of the following are characteristic of product liability cases in the United States? (Check all that apply.)

-In the United States, product liability cases are heard by juries. -In the United States, juries can award punitive damages. -In the United States, juries can award actual damages to the plaintiffs.

Which of the following are basic types of institutions? (Check two.)

-Informal -Formal

Jason's company is keeping a careful watch on the pollution standards being developing by the United Nations because they will affect what products his company can export in the future. In this situation, the United Nations is acting as a(n) ____________ ____________(trading bloc/international organization).

-International -Organization

Which of the following are the two major global monetary institutions? (Check two.)

-International Monetary Fund -World Bank

Which of the following are ways the Organisation for Economic Cooperation and Development supports governments? (Check all that apply.)

-It helps maintain financial stability. -It supports efforts to increase economic growth. -It supports the fight against poverty.

Which of the following statements are true of gross national income? (Check all that apply.)

-It includes income from services abroad. -It subtracts income paid to entities outside the nation. -It includes income from domestic production of goods. -It includes the total value of all income generated by residents of a nation.

Which of the following accurately describe a country's legal system? (Check all that apply.)

-It is a collection of legislation and regulations. -It is a collection of governing principles. -Its goal is to provide for the welfare of the country.

Which of the following are aspects of the Japanese Fair Trade Commission? (Check all that apply.)

-It is responsible for enforcing antitrust laws. -It targets small, foreign, or weak industries. -It operates separately from the Japanese court system.

Which of the following statements are accurate regarding the International Monetary Fund? (Check all that apply.)

-It operates as a collaboration of nations. -It promotes international monetary cooperation. -It makes funds available for balance-of-payments corrections.

What are the potential drawbacks to placing a ban on the export of advanced technologies? (Check all that apply.)

-It reduces export revenues for the country's manufactures. -It impedes the funding of continued innovation. -It impedes efforts to sustain international market share.

Which of the following are characteristics of the UN Security Council? (Check all that apply.)

-Its permanent members each have veto power. -Its permanent members are China, France, the Russian Federation, the United Kingdom, and the United States. -It is responsible for maintaining international peace and security.

Within a free trade area, restrictions generally remain on the movement of which of the following? (Check all that apply.)

-Labor -Services -Capital

With full economic integration, as in the European Union, a central bureaucracy is responsible for coordinating which of the following? (Check all that apply.)

-Labor systems -Education systems -Tax rates

Which of the following countries follow religious law? (Check all that apply.)

-Libya -Morocco -Iran

The Council of the European Union represents the _______ - _______ and is the primary policy-setting institution in the EU.

-Member -States

Regional Economic Integration Description - Members

-NAFTA: Started well then slumped but hopes for revival; The United States, Canada, and Mexico -MERCOSUR: Work in progress; Originally Brazil and Argentina -EU: Began as customs union, moved to common market, and then political integration; 28 European countries -ASEAN: Has cohesion and mutual values needed for common market; Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam -CAFTA: The first U.S. trade agreement with a group of developing economies; Five Central American nations plus the Dominican Republic and the United States

Most of the African economies are considered small and underdeveloped with the exceptions of which countries? (Check all that apply.)

-Nigeria -South Africa

In 2018, U.S. trade policy included active sanctions against _______. (Check all that apply.)

-North Korea -Sudan -Libya

Types of Legal Systems Characteristic - System of Law

-Role of judge is to apply codified law. - Civil -Judge is charged with interpreting law, tradition and custom in light of case being heard. - Common -Fundamental documents include Qur'an and Sunnah - Religious

Which of the following countries belong to the common market known as the Eurasian Economic Union? (Check all that apply.)

-Russia -Kazakhstan -Belarus

Which of the following are characteristics of special drawing rights (SDRs)? (Check all that apply.)

-SDRs are a reserve asset established by the IMF. -A nation's quotas are denominated in SDRs. -The SDRs' value is linked to a basket of currencies made up of five international currencies.

U.S. accounting practice is guided by which of the following organizations? (Check all that apply.)

-Securities and Exchange Commission -Financial Accounting Standards Board

Which of the following are general areas of responsibility of the United Nations? (Check all that apply.)

-Set technical standards and norms. -Address the downsides of globalization, such as terrorism and arms traffic. -Prepare the ground for investment in emerging economies.

Which of the following countries' currency is used in the Atlas conversion factor? (Check all that apply.)

-The United Kingdom -Japan -the United States -the euro zone

Which of the following are characteristics of the World Bank? (Check all that apply.)

-The World Bank was established at the Bretton Woods meeting. -The World Bank was established to address economic development. -The World Bank functions as a nonprofit cooperative for its member-nations.

A country with a low cost of labor would be attractive to an investor business for which of the following reasons? (Check all that apply.)

-The country would provide a way to lower production costs. -The country might help the company compete better.

Which of the following are characteristics of institutions? (Check all that apply.)

-They are a collection of norms that regulate the relations of individuals to each other. -They are organizations that a group, society, or culture constructs to provide meaning to social life. -They are organizations that a group, society, or culture constructs to limit behavior.

Which of the following are characteristics of nontariff barriers? (Check all that apply.)

-They can be quantitative and nonquantitative. -They impose additional costs on customers. -They impose additional costs on producers. -They are forms of discrimination against imports.

Which of the following are characteristics of normative institutions? (Check all that apply.)

-They propagate principles. -They establish standards. -They broadly represent humanity.

Which of the following are the purpose of economic analyses? (Check all that apply.)

-To assess the overall outlook for the economy -To forecast the impact of economic changes on the firm

Why Governments Intervene Argument for intervention - Action

-To provide for national defense - subsidies for industries considered vital to national security -To impose sanctions - limits on trade with certain countries -To protect infant industries - subsidies for emerging industries -To ensure fair competition - import duties on products from a foreign country -To provide retaliation - counterban on imports

A _________ _________ is used to designate and differentiate a company's products. For example, Yum! Brands encompasses Taco Bell and Pizza Hut.

-Trade -Name

A(n) ______ _______ includes formulas, processes, patterns, or designs that a business wants to keep confidential.

-Trade -Secret

Terminology in Practice The Event - What it is

-U.S. military in Iraq hires companies to provide food and catering supplies to U.S. troops in Iraq. - Privatization -In 2007, the Venezuelan military occupied oil fields across the eastern Orinoco Basin, while workers overtook the fields after midnight. - Nationalization -In 1983, the French government directed all Japanese VCRs for customs inspection in Poitiers, miles from their port of entry. - Nontariff barrier -In 1858, Felice Orsini threw three bombs to attempt to assassinate Napoleon III - Terrorism -In 2011, Tunisian protests forced out the president, Ben Ali - Terrorism -In 2002, the North Dakota Wheat Commission asked U.S. Commerce Department to hit Canadian wheat with duties from 23.7 percent to 37.5 percent after wheat was sold in the United States in 2001 at under U.S. and Canadian market prices. - Dumping -The U.S. government charges $0.54 per gallon on imported ethanol. - Tariff Barrier

Japanese antitrust legislation got its start when the _______ ________ (European Union/United States) introduced it during its occupation of Japan after World War II.

-United -States

Which of the following are ways by which the United Nations has direct impact on the conduct of business? (Check all that apply.)

-Universal Postal Union protocols prevent losses and allow the mail to move across borders. -Commercial airlines have the right to fly across borders and land in case of emergency, due to agreements negotiated by the UN system. -When ships sail freely across the seas, they are protected by rules legitimized in UN conferences.

The two major global monetary institutions are the International Monetary Fund and the ________ ________.

-World -Bank

Evaluating Country Attractiveness Economic indicator - dimension of economy

-absolute size of an economy - Gross national income (GNI) -speed of economic growth - Economic growth rate -how a nation's income is apportioned - Income distribution -purchase of essential vs. nonessential goods - Private consumption -cost of production - Unit labor costs -potential market size - Total population -potential market segments - Age distribution

Advocates for the protection of an infant industry claim that firms need protection from imports until they _______. (Check all that apply.)

-achieve economies of scale -obtain the required investment capital -train the labor force -master production techniques

Economists agree that political barriers to trade _________. (Check all that apply.)

-are detrimental to trade -reduce economic efficiencies

What are the three distinct approaches found in a legal system?

-common law -religious law -civil law

Agreements between countries can be called ___________. (Check all that apply.)

-conventions -covenants -protocols -treaties -Compacts

Intellectual property is protected by _______. (Check all that apply.)

-copyrights -trademarks -trade names -Patents

Which of the following are effects of trading blocs? (Check all that apply.)

-cost reductions to firms inside the integrated area -reduced tariffs -reduced quotas

In the United States, patents are divided into which three types?

-design -utility -Plant

What are the three major groupings of nonquantitative nontariff barriers? (Check all that apply.)

-direct government participation in trade -customs and other administrative procedures -Standards

Which of the following cybercrimes are most often targeted at businesses? (Check all that apply.)

-domain-related offenses -Hacking -data espionage

Which of the following factors are responsible for a change in labor costs in a country? (Check all that apply.)

-exchange rates -compensation -Productivity

Which of the following are examples of cognitive institutions? (Check all that apply.)

-good manners -Motherhood -Duty

Which of the following have occurred due to the increase of women in the workforce? (Check all that apply.)

-greater market for convenience goods -larger labor supply -larger family incomes

Developed nations spend twice as much as developing nations on which of the following categories? (Check all that apply.)

-health care -consumer durables -transport and communication

Which of the following challenges can unstable governments present to businesses? (Check all that apply.)

-inability to ensure peace -a pattern of unpredictable change

High levels of debt in a nation can lead to which of the following? (Check all that apply.)

-increased economic uncertainty -more resources spent on interest payments -lower government investment in infrastructure

Which methods can a government use to minimize unfair international competition? (Check all that apply.)

-institutions such as the WTO -national laws -negotiations between governments

The IMF quota formula is a weighted average of which of the following? (Check all that apply.)

-international reserves -GDP -Openness -economic variability

What are the areas of increasing concern to governments as they try to protect business activities? (Check all that apply.)

-kidnapping -cybercrime -terrorism -Piracy

Which income levels would dominate in a developing economy? (Check all that apply.)

-low-income -Middle-income

Which of the following are characteristic of a stable government? (Check all that apply.)

-maintains itself in power -predictable monetary policies -predictable fiscal policies

Productivity per worker is greater in more developed countries because of _______. (Check all that apply.)

-more capital per worker -advanced technologies -superior management

What are three typical objectives of terrorism? (Check all that apply.)

-overthrow a government -gain release of imprisoned colleagues -exact revenge for real or imagined wrongs

Legal Forces Legal characteristic - where it is found

-per se application - U.S. Competition Law -misuse of activity - EU Competition Law -extraterritoriality - the United States and the European Union -trade obstacle, nontariff - France -strict liability - U.S. Tort Law -punitive damages - U.S. Product Liability Law

Which of the following areas of the law are of special concern to international businesses? (Check all that apply.)

-performance of contracts in an international setting -litigation in an international setting -Extraterritoriality

Subsidies can take the form of _______. (Check all that apply.)

-preferential tax treatment -cash payments to the firm -government participation in ownership

A trade secret held by a business may include _______. (Check all that apply.)

-processes -designs -Formulas

What are some of the reasons a government would restrict trade? (Check all that apply.)

-promote national defense -preserve domestic jobs -protect domestic infant industries

Which of the following are the basic principles on which the global trade system rests in WTO negotiations? (Check all that apply.)

-promoting fair competition -encouraging development and economic reform -predictability, through binding and transparency -freer trade, gradually, through negotiation -trade without discrimination

Institutions like the United Nations are important to business decision makers because they _______. (Check all that apply.)

-provide infrastructure for decision makers. -provide ways to settle conflict. -provide ways to resolve disagreements.

Dumping is defined in several ways. Which of the following are definitions of dumping? (Check all that apply.)

-selling a product abroad for less than the cost of production -selling a product abroad for less than the price to third-party countries -selling a product abroad for less than the price in the home market

Which of the following are examples of formal institutions? (Check all that apply.)

-the federal government -The police

Which of the following are reasons why governments nationalize private firms? (Check all that apply.)

-to control an earlier investment in a firm -to follow an economic or political ideology -to extract more money from the firms -to increase profitability

What are some purposes of a trade name? (Check all that apply.)

-to do business in multiple geographic areas with one legal corporation -to distance the company from negative publicity -to focus the customer on a product line

Which of the following are reasons for the government to privatize a business? (Check all that apply.)

-to ensure that a business runs more efficiently -to raise money -to reduce the size of government

Why are competition laws strictly enforced in the United States and the European Union? (Check all that apply.)

-to prevent price fixing -to prevent market sharing -to prevent business monopolies

It is estimated that worldwide there are more than _________ ransom and kidnapping situations every year.

16,000

Which of the following Asian trade groups began as a military and security agreement?

ASEAN

The Sarbanes-Oxley Act had a direct effect on standards in the U.S. _____ industry.

Accounting

Which duty is stated as a percentage of the invoice value of the product?

Ad valorem

Which industry do nearly all governments subsidize?

Agriculture

If there was only one automobile manufacturer in the United States and it was impossible for another company to enter the industry, the government or the company trying to enter the market might try to enforce a competition or _________ law.

Antitrust

Instead of taking their dispute to court, two companies agree that bringing in a neutral third party to resolve the issue will be less costly and faster. These two companies have agreed to use _________.

Arbitration

International businesspeople often specify in their contracts that disputes will be resolved by ________ because it can be quicker, less expensive, and more binding than litigation.

Arbitration

The Foreign Corrupt Practices Act is relevant in an international business situation that involves _______ (liability/bribery).

Bribery

Three Levels of Economic Development A developed country has an established infrastructure, service-based economy, and is typically highly industrialized with a high per capita income. Based on their descriptions above, which of the following countries are developed?

Canada Explanation: A Canadian company is creating new technology to support high-income individuals.

Which country is dramatically increasing its involvement in African aid, trade, and foreign direct investment?

China

Court proceedings are generally less adversarial in ______ (civil/common) law cases.

Civil

The _________ law approach to a legal system is based on a systematic collection of laws designed to cover all areas of concern.

Civil

Which legal system is the most widespread system globally?

Civil law

Which type of institutions are collections of shared ideas that define reality by means of conceptual frameworks or schema that are usually neither explicit nor tangible?

Cognitive

Which of the following is NOT a specific way in which the United Nations directly impacts the conduct of business?

Commercial airlines are prohibited from flying across borders and landing during emergency situations due to agreements negotiated by the UN system.

A(n) _________ market is created when a customs union lifts restrictions on the mobility of services, labor, and capital among member nations.

Common

Which approach to law relies on decisions made by judges in previous cases along with statutes and regulations made by legislatures?

Common law

ASEAN is an Asian trade group that was formed to protect member countries from the growth of __________ in the region.

Communism

Those who believe it is important to protect infant industries claim that, in the long run, these industries will have a(n) ________ advantage, but in the meantime these firms need protection from imports.

Comparative

A(n) ________ duty is a combination of specific and ad valorem duties.

Compound

What set of uniform rules established by the United Nations governs the formation of international sales contracts and explains the rights and obligations of the buyer and the seller?

Convention on the International Sale of Goods

When musicians legally challenged the music-sharing site Napster, the basis for the artists' argument was their __________ in the songs they had written and recorded.

Copyright

Which form of intellectual property protection gives authors, composers, and creators the exclusive right to publish and dispose of their work?

Copyrights

Special drawing rights are considered the _________ of the International Monetary Fund.

Currency

Any illegal Internet-mediated activity that takes place in electronic networks is called _________.

Cybercrime

The Smoot-Hawley Tariff Act demonstrates how tariffs can cause world trade to ________ (increase/decrease).

Decrease

In 2002, Argentina failed to repay its international loan obligations. As a result, the value of its currency _______ (increased/decreased).

Decreased

GNI per capita in Denmark is $55,220. GNI per capita in India is $1,820. Which country has more purchasing power?

Denmark

Economic advancement and industrialization are characteristics of a ______________ (developed/developing) economy.

Developed

Economic comparisons based on purchasing power parity yield ________ (developed/developing) nation GNI per capita values that are considerably lower than those based on exchange rates.

Developed

A country that is struggling to establish infrastructure and struggles economically is considered a __________ (developed/developing) economy.

Developing

A lower-income nation with a less technically developed infrastructure and lower living standards is known as a(n) ________ economy.

Developing

More than three-quarters of the world's total population is found in _________ (developed/developing) countries.

Developing

Within the litigation process, pretrial activities include finding the facts that are relevant to the case. This process is called __________.

Discovery

Ronald plans to buy a new pair of shoes with his next paycheck after he pays his mortgage and makes his car payment. The money he will use to buy the shoes is an example of _________ income.

Discretionary

The amount of income left after paying taxes and making essential purchases is called ______ income.

Discretionary

After-tax personal income is called ________ income.

Disposable

Population _________ is a measure of how inhabitants are distributed over a nation's area.

Distribution

The World Trade Organization's extended conference on trade is known as the _________.

Doha Round

Gross__________ product is a measure of an economy's size based on the market value of goods and services produced within the nation in a year.

Domestic

Birthrates in nations such as India, Mexico, and China are on the ________ (upswing/downswing).

Downswing

Supporters of fair competition suggest that an import ________ will bring the cost of imported goods up to the cost of domestically produced goods.

Duty

Attempts by nations to create agreements that lead to improved trade conditions for parties to the agreement are known collectively as _________ integration.

Economic

Evaluating Country Risk

Economic Risk: -balance-of-payments deficits -high inflation rates -unpaid loans -militant labor unions -limits on currency convertibility Political Risk: -wars -revolutions -coups -attitude toward home country -sanctions on home country -hostility toward private business

Regional Economic Integration Agreements

Economic Union - EU Common Market - MERCOSUR...almost Customs union - Andean Community Free trade area - EFTA

According to the Big Mac Index of July 2018, the currency of which country is undervalued by more than 50%?

Egypt

A(n) _______ market economy is one with per-capita income in the low to middle range as measured by the World Bank.

Emerging

An economy with per capita income in the low to middle range that is in a transition toward developed status is a(n) ________ market economy.

Emerging

Purchasing power parity is a means of adjusting the exchange rates for two currencies so that they have ________ purchasing power.

Equal

Which institution within the EU administers the daily operations of the European Union?

European Commission

Which of the nine institutions within the EU represents the people of Europe and is elected from member-states?

European Parliament

The Maastricht Treaty established the __________ in 1993.

European Union

When an international manager is considering where to do business, one of the first considerations is

The size of the economy

The available foreign currency of a nation is known as its foreign ________.

Exchange

a patent gives the inventor

Exclusive right to manufacture, exploit, use and sell the invention for a given time period

Which of the following is an example of a government-owned business in the United States?

Export-Import Bank

Voluntary export restraints are export quotas imposed by the _________ nation.

Exporting

In _______ kidnapping, the victim is kidnapped, often near an airport or international hotel, and forced to withdraw money from cashpoints or an ATM before being released.

Express

The U.S. government imposing taxes on a U.S. citizen living in France is an example of the __________ application of laws.

Extraterritorial

When a country attempts to enforce its domestic laws in a foreign country, it is practicing _________.

Extraterritoriality

True or false: A compound duty is a combination of specific and nontariff barriers.

False

True or false: A compound duty is stated as a percentage of the invoice value of the product.

False

True or false: Economic forces are some of the more stable forces in the external business environment.

False

True or false: Import duties mean lower prices for the consumer.

False

True or false: In most parts of the world, you will not find government-owned businesses.

False

True or false: Sanctions are effective at achieving their goal of forcing change in the targeted country.

False

True or false: The Sarbanes-Oxley Act has been primarily criticized for its negative affects on the market and potential investors.

False

True or false: Trading blocs such as FTAs and common markets bring about cost reductions for firms outside the integrated area.

False

True or false: Worldwide agreement on a body of laws is known as globalization.

False - it is known as harmonization

The number of children born to a woman if she lives to the end of her childbearing years is reflected in the _______ rate.

Fertility

All the uncontrollable forces originating outside the home country that surround and influence the firm are part of the __________ (foreign/international) environment.

Foreign

Which act of the U.S. Congress prohibits bribery of foreign officials and sets requirements for transparency of accounting transactions?

Foreign Corrupt Practices Act

The existence of the rule of law in a foreign market suggests that

Foreign investors can assume that their interests will be protected

Which type of institution operates through laws and regulations to influence behavior?

Formal

In a(n) __________, there are no tariffs or quotas when members trade, and each member maintains its own external tariff on goods arriving from countries in the rest of the world.

Free trade area

What is the main deliberative body of the United Nations, in which each nation has one vote regardless of size, wealth, or power?

General Assembly

What measures the degree to which family income within a country is distributed equally?

Gini index

Quotas are usually _____ (local/global) in nature, with the total amount fixed regardless of the source.

Global

International firms can be protected from terrorism and cybercrime through _______ (business/government) actions.

Government

Official prices are determined by _______ (government/businesses) to correct for deficiencies in ad valorem duties.

Government

With the advent of WTO agreements, nontariff barriers have gained _______ (greater/lesser) importance.

Greater

A measure of an economy's size based on the market value of goods and services produced within a nation in a year is

Gross domestic product

Worldwide agreement on a body of laws is known as _______.

Harmonization

When comparing production levels at automotive plants in Mexico and the United States, productivity per worker is ________ in the United States than in Mexico.

Higher

Compensation is more likely to vary for _______ (hourly/salaried) employees.

Hourly

Tariffs are also called ______ (import/export) duties.

Import

Gross national _________ is the measure of the total value of all income generated by the residents of a nation, including both the domestic production of goods and services and income generated from abroad, mainly through dividends and interest payments.

Income

The total value of all income generated by the residents of a nation, including both the domestic production of goods and services and income from abroad, is gross national __________.

Income

_________ distribution is a measure of how a nation's income is apportioned among its people.

Income

When governments impose trade restrictions, the cost of the traded goods will _________.

Increase

Which country group is expected to have the largest populations in 2050?

India, China, United States

The World Trade Organization has developed the guidelines for trade, and these guidelines are followed because they are identified as socially acceptable. The World Trade Organization is a type of _________ institution.

Informal

______ (Formal/Informal) institutions use norms, values, customs, and ideologies to mold behavior.

Informal

______ are important to business decision makers because they provide ways to settle conflicts between countries and resolve disagreements more easily than if one government worked directly with another.

Institutions

______ are organizations that a group or society constructs to provide stability and meaning to social life.

Institutions

An invention that is protected by a patent is known as _________ property.

Intellectual

Extraterritoriality is more of a concern for _________ (international/domestic) businesses.

International

Stable relationships among nations are fostered through _______ (common/international) law.

International

The ________ environment includes the interactions between domestic and foreign environmental forces or between sets of foreign environmental forces.

International

Which type of law refers to the set of rules that nations have agreed to follow?

International

What guides the accounting principles of countries in the European Union? (Check all that apply.)

International Accounting Standards Board International Financial Reporting Standards

The __________ operates on the premise that the common interest of all nations in a workable international monetary system far transcends their conflicting national interests.

International Monetary Fund

What's the Right Thing to Do? What is grease money?

It is a facilitating payment made to expedite nondiscretionary official actions. Explanation: Grease makes the wheels that are going to turn eventually turn sooner and more smoothly. It is a facilitating payment made solely to expedite nondiscretionary official actions like customs clearance.

Governmental intervention in trade reflects a governmental trade strategy in ________ (Japan/United States).

Japan

Which publication reports the daily business of the General Assembly?

Journal of the United Nations

Outside the United States, product liability cases are heard by a _______ (jury/judge).

Judge

Foreign investment is encouraged in a country's legal system is based on the rule of _________.

Law

Product _______ laws hold a company and its officers and directors liable and possibly subject to fines or imprisonment when its product causes injury, damage, or death.

Liability

What is the legal proceeding conducted to determine and enforce legal rights?

Litigation

Under an orderly marketing arrangement, there is an agreement that each nation will preserve some of the national market for ______ (local/global) producers.

Local

Which state in the United States does not follow the common law system?

Louisiana

On the Gini Index, a ________ (lower/higher) score indicates a more equal distribution of family income within a country.

Lower

A legal case that is based on tort law usually results in a settlement based on ____________ (money/a prison sentence).

Money

In many majority ________ (Christian/Muslim/Buddhist) nations, alcohol is strictly forbidden.

Muslim

Which of the following is one of the world's largest free trade zones and one of the most powerful productive forces in the global economy?

NAFTA

When governments _______ private firms, they move them from private ownership to public ownership.

Nationalize

A treaty is a source of international law that is used when making agreements among _________ (nations/businesses).

Nations

The requirement that foods sold to the U.S. Department of Agriculture for use in school lunches must be produced in the United States is an example of a ___________ (quantitative/nonquantitative) nontariff barrier.

Nonquantitative

Economic integration agreements are informal _________ institutions that rely on agreements among members, and their development has tended to follow a general pattern from free trade area through common market to economic integration.

Normative

The United Nations operates with voluntary agreements among members based on their shared norms, which makes it an informal ________ institution.

Normative

Which type of informal institutions establish standards, propagate principles, and broadly represent humanity?

Normative

Which institution provides information on economic and other activities within its member-nations and serves as a forum for discussion of shared economic and social policy issues?

OECD

Non-quantitative nontariff barriers

Often involve government participation in trade, especially in customs and other administrative procedures

Arbitration is

Often preferred by foreign litigations in the U.S., for speed and privacy

Purchasing power _______ allows for the comparison of different economies' GNIs by equalizing the purchasing power of their currencies.

Parity

A(n) _______ grants the inventor of a product the exclusive right to manufacture and sell that product.

Patent

Which form of intellectual property protection grants inventors the exclusive right to exploit, use, and sell their invention?

Patent

U.S. cargo ships have been hijacked by groups from West Africa who demand money for the release of the ship. This form of hijacking is called _________.

Piracy

________ is hijacking that includes kidnapping on the seas.

Piracy

Economic integration also requires a high-degree of ________ integration.

Political

______________ is a measure of the number of inhabitants per area unit.

Population Density

During Margaret Thatcher's tenure as prime minister of Britain, she decreased the number of state-owned companies and sold more than 30 companies, thereby raising $65 billion for the country. Thatcher was implementing ________ (nationalization/privatization).

Privatization

The selling of government-owned businesses to the private sector is known as _______.

Privatization

Javabucks in China: _________ have been pressing hard for stricter policies on intellectual property rights.

The WTO and foreign governments Explanation: The WTO and foreign governments have been pressing hard for stricter policies on intellectual property rights.

An increase in employment is forecast in a market, prompting a revised sales forecast at Carson's steel manufacturing facility. The effect of sales changes on raw materials requirements is an issue for the __________ manager.

Production

A tariff-rate _________ permits a stipulated amount to enter duty-free or at a low rate, but a much higher duty is charged for additional quantities.

Quota

A(n) _______ (quota/embargo) is put in place by a government to limit the amount or source of imports.

Quota

Which quantitative nontariff barrier sets numerical limits for specific kinds of goods that a country will permit to be imported during a specified period?

Quota

Each of the 189 IMF members contributes funds, known as ______, that are determined by the nation's relative size in the world economy.

Quotas

European Union (EU) began as common market for

The coal and steel industries

The Qur'an is an example of a document that is used as the basis for a legal system based on _____ law.

Religious

Three Levels of Economic Development A developing country has low income with low to moderate standard of living, low savings rate, and technological dualism. Based on their descriptions above, which of the following countries are developing?

Russia Explanation: Russia is experiencing technological dualism.

Which part of the United Nations has the responsibility for maintaining international peace and security?

Security Council

What's the Right Thing to Do? What reasonable alternatives does Mary have other than to pay the bribe to grease the wheels of commerce?

She could report the agent, go to the agent's superior, and talk with friends at her uncle's. All take time. Explanation: The three reasonable alternatives all take time and, if the bribe system is institutionalized, only seeking the advice of the uncle might work.

What's the Right Thing to Do? If Mary pays the bribe, what is the most risky outcome for her business, assuming it is a grease bribe?

She signals her willingness to pay going forward, and this is a vulnerability. Explanation: One major outcome is the vulnerability she would incur for her business going forward.

Mercosur is a trade group based in __________.

South America

A(n) _______ duty is a fixed sum of money charged for a specified physical unit of the product.

Specific

Regardless of the value of the invoice, Kendall's company charges $0.14 per pound of butter exported. This tax is an example of a(n) ________ duty.

Specific

Businesses like peace and predictability because they provide _________.

Stability

Under the standard of ________ liability, the manufacturer or designer is liable for damages caused by a product without the plaintiff needing to prove negligence by the manufacturer of the product.

Strict

In the past, the U.S. government provided payments to farmers as a way to manage surplus food resulting from increased production needed to fuel WWII and to feed Europe. The government offset and controlled the overproduction of these crops so as to prevent them from flooding the market. These payments to farmers were an example of _________.

Subsidies

What is the most common form of direct government participation in trade?

Subsidy

The Global Compact was established by the United Nations and is the basis for a(n) _____ initiative.

Sustainability

As of July 2018, the Big Mac Index showed the currency of __________ was overvalued by about 19%.

Switzerland

Unlawful acts of violence committed to achieve a variety of objectives are collectively known as ________.

Terrorism

What's the Right Thing to Do? When her legal advisor, a specialist in international trade law, texted her back, what did he say?

This is a grease payment. Pay it and get on with your business. Don't spend any more time on this. Explanation: This facilitating payment is not illegal under the U.S. FCPA.

According to the book, what is the purpose of economic analyses?

To assess the overall outlook for the economy and the impact of economic changes on the firm

The injuries inflicted on another person, either intentionally or negligently, are called __________.

Torts

A shape, color, design, phrase, abbreviation, or sound that defines a company or its products and is reserved for the company's sole use is known as a _________.

Trademark

The Nike swoosh and the Starbucks mermaid are examples of a __________.

Trademark

True or false: A company wishing to do business internationally would be interested in knowing a country's divorce rate because it would affect the buying habits of women.

True

True or false: A national system of law can minimize unfair international competition.

True

True or false: A trade obstacle, such as a tariff, may provide revenue for the issuing government, but it can also be a barrier to certain imports.

True

True or false: Because of their higher birth rates, developing countries have younger populations than do industrial countries.

True

True or false: Kidnappings now outnumber shootings of aid workers.

True

True or false: Many European Union countries have the ability to cap the damages awarded in a strict liability case.

True

True or false: Purchasing power parity is useful when a company is determining whether a particular country might be an attractive market for consumer goods.

True

True or false: Typically, the higher the GNI per capita, the more advanced the economy.

True

The percent of household expenditures spent on food and beverages in developing nations is at least ______ times the percent spent in industrialized nations.

Two

Total direct labor costs divided by units produced equals ______ labor costs.

Unit

Which worldwide organization has 193 member-nations and is dedicated to the promotion of peace and global stability?

United Nations

When comparing the United States views on antitrust laws to the European Union's, the _________ tends to look at the consumer first instead of focusing on the rivals' objections.

United States

The underground economy refers to the part of a nation's income that is __________.

Unreported

When a government makes radical policy changes, it is viewed as ________ (stable/unstable).

Unstable

Three Levels of Economic Development An emerging country has economic reforms in process while experiencing rapid growth. Based on their descriptions above, which of the following countries are emerging?

Uzbekistan Explanation: Uzbekistan are conducting economic reforms to promote rapid future growth

A manufacturing facility that produces more of the inputs it needs for its own processes rather than importing them is practicing _______ integration.

Vertical

Which institution functions as a nonprofit cooperative for its member-nations and is able to pass onto developing nations its ability to borrow funds at low rates?

World Bank

Javabucks in China: The organization of 183 countries, all of which have signed treaties to protect intellectual property rights, is known as

World Intellectual Property Organization. Explanation: The organization of 183 countries formed to protect intellectual property rights is the World Intellectual Property Organization.

Which institution is a rule-based, member-driven organization with decisions negotiated by all the member governments and is the only global international organization designed to establish and help implement rules of trade between nations?

World Trade Organization

What's the Right Thing to Do? Does the FCPA apply to this situation?

Yes. The customs agent is a government official requesting payment for himself. It could be "grease." Explanation: FCPA does apply, but there is the argument that the sort of payment he requests is "grease" and thus exempt.

The main difference between free trade area and a custom union is that in a custom union there is

a common external tariff

Japan's Economic Malaise Deflation occurs when consumers expect prices to

be lower tomorrow than today. Explanation: Deflation occurs when consumers expect prices to be lower tomorrow than they are today.

The United Nations developed CISG as a way to solve jurisdictional problems related to _________.

contract performance

Japan's Economic Malaise The Japanese government has tried to stimulate the economy by

cutting interest rates to zero and investing in infrastrucure. Explanation: The Japanese government has tried to stimulate the economy by cutting interest rates to zero to encourage companies to borrow money for development.

Economic analysts use ___________ published by governments and international agencies to assess and forecast economic conditions at the international level.

data, information, or reports

The impetus behind the Doha Round was to work on trade-related issues between __________.

developed and developing countries

Economists argue that the best way to protect national security and provide for national defense is through _________.

direct government subsidies

Country risks can be responded to, in part, by

employee training programs

The Big Mac Index is a way to measure _________.

exchange rates

Cassandra's company is based in the United Kingdom. Her company bills exports based on euros. If a U.S.-based company needs to pay Cassandra's company in euros, it would use the nation's ______ to obtain the euros.

foreign exchange

Japan's Economic Malaise As economies move toward greater privatization, there is a greater likelihood of facing the phenomenon that Japan faced due to the stock market collapse. Privatization transfers assets

from state to private owners. Explanation: Privatization involves transferring ownership of state assets to private owners.

International organizations prefer to rely on _________ for measuring the value produced in an economy.

gross national income

The value of Toyota cars built in Japan and the profits sent to Japan for Toyota cars assembled in Germany are both components in Japan's _____.

gross national income

Disposable income refers to income that a consumer _________.

has after paying taxes

Kelly has been asked to gather data on income distribution in China. What type of information does Kelly need to find?

how income is apportioned among the people of China

Japan's Economic Malaise Prior to its stock market crash, Japan enjoyed strong economic growth. However, the country also faced economic risk because

its banking system was overburdened with bad loans. Explanation: Deregulation allows for growth in market-based economies but also creates a more risky environment.

A request for ransom is associated with the extreme act of __________.

kidnapping or terrorism

Import duties can be set to encourage

local input

Patent trolling is a process of

looking for loopholes in patent protection and exploiting them.

Japan's Economic Malaise The major cause/causes of the economic problems that Japan faces is/are the

low birthrate and more retired people. Explanation: The major causes for the economic problems that Japan faces are the low birthrate and the aging population; this means more retired people and fewer people in the workforce.

A(n) ______ guarantees that a certain minimum import duty will be paid regardless of the actual invoice price.

official price

A measure of the number of inhabitants per area unit is _____.

population density

When a manufacturer lowers its export price to force the importing nation's domestic producers out of business, expecting to raise the price once it has accomplished that objective, the manufacturer is engaged in _________.

predatory dumping

A manufacturer of coffee makes recalled all of its products after learning that nearly 50 people had been injured after the glass carafes shattered when hot coffee was allowed to sit in it. These people planned to bring a lawsuit against the manufacturer. That lawsuit would be based on ________.

product liability

Javabucks in China: Intellectual property rights are intended to

protect original ideas/works. Explanation: Intellectual property rights are intended to protect original ideas and creative works of people and companies.

Which one of the following would be recognized in a country risk assessment?

revolution against the government

Javabucks in China: The philosophy behind intellectual property rights is to

reward the creator of an idea. Explanation: The concept behind intellectual property rights is to reward the inventor for his/her idea.

When governments nationalize a firm, they don't seek to

sell the firm to foreign investors

What standard does not require a plaintiff to prove negligence in the product's design or manufacture?

strict liability

Which of the following permits a stipulated amount of a good to enter duty-free or at a low rate, but when that amount is reached, a much higher duty is charged for additional quantities?

tariff-rate quota

The Big Mac Index calculates the exchange rate at which a Big Mac in other countries costs the same amount as a Big Mac in ________.

the United States

Vertical integration is more likely to take place in a company that is __________.

the home plant rather than based overseas

Japan's Economic Malaise In 1989, Japan was an economic superpower; it was

the second-largest economy. Explanation: In 1989, Japan was an economic superpower; it was the second-largest economy after the United States.

Institutions are vitally important for international business decision makers because

they provide ways to settle conficts

Which characteristic do analysts examine first when determining a nation's potential market size?

total population

The World Trade Organization has a direct impact on increasing ________.

trade flows

Of the five basic principles on which the global trade system rests in WTO negotiations, which is known as the most-favored nation (MFN) principle?

trade without discrimination

The actions of Mercosur and the Association of Southeast Asian Nations must be monitored by economic analysts. These two organizations are both examples of __________.

trading blocs

Between 2012 and 2017, emerging and developing economies grew __________ faster than developed economies.

two to three times

Informal institutions are composed of sets of:

voluntary agreements