Test 2 final study set

The largest government privatizing in the EU as of 2015 is A. Greece. B. Germany. C. the U.K. D. Portugal.

A

Income Distrobution

A measure of how a nations income is apportioned among its people

Incoterms include: A. FAS and DAF. B. CFR and COD. C. INSAP and ECO. D. SAE and EBI. E. DOA and EDP

A. FAS and DAF.

Extraterritoriality is: A. a nation's attempt to enforce its law beyond its borders. B. added territory as a result of dispute settlements in wars, such as the Sakalin Islands. C. a citizen's claim to government assistance in a foreign environment. D. a taxable condition most international firms attempt to avoid. E. two of the above.

A. a nation's attempt to enforce its law beyond its borders.

"In nearly every economic crisis, the root cause is political, not economic," observed A. Abraham Lincoln. B. Lee Kuan Yew. C. Adam Smith. D. Ben Bernake.

B

Incoterms attempt to standardize shipping agreements, and they include: A. FAS and CIF. B. CED and COD. C. descriptions of portside processes. D. insurance arrangements for international shipments. E. performance guarantees.

C. descriptions of portside processes.

A nontariff barrier is illustrated by all but D. the preference of some Indonesians for betel nut.

D

Punitive damages in product liability cases can be awarded in: A. Japan. B. Japan and the EU. C. the UK. D. the United States E. all of the above.

D. the United States

Standardization of law: A. would challenge international business because IB would lose protection. B. would make IB work more smoothly because uniform, predictable laws would result. C. has been progressing in some areas, such as taxation, but there is a long road forward. D. two of the above. E. all of A, B, and C.

D. two of the above.

According to the text, an important socioeconomic dimension is A. the increasing birth rate in most developed nations. B. the decreasing number of working women, which will increase demand for lower cost staples. C. the urban-to-rural shift, which impacts demand for housing. D. the increase in the number of elderly in developed nations, which reduces demand for health care. E. the increase in the number of working women, which may expand the market for convenience goods.

E.

The main goal of tariffs is to

Increase the selling price of imported goods thereby reducing competition for domestic producers

Express kidnapping targets

Not Home country

When a government transfers the assets of a company from the public sector to the private sector, it is an example of

Not private I still

Among the cyber crimes that most often target businesses are

Not prospect

A country that can sell it's products at a lower cost because it has lower standards for admissions for manufacturing facilities is making use of

Not subsidy dumping

An argument against using sanctions to punish and offending nation is that

Sanction sell them achieve their goal of forcing change in the offending country.

Transparency International's 2013 Index lists which countries as being among the most transparent?

Switzerland, Singapore, the Netherlands

WIPO is a

UN agency that administers intellectual property treaties and advises countries on intellectual property-related administrative issues.

WIPRO and TRIPS represent

UN and WTO agencies or programs that focus on IP.

Chinese courts

follow the rule of law and are perceived as fair.

The end result of legal trade obstacles is often

higher costs to consumers.

piracy

hijacking and kidnapping on the seas

U.S. responses to foreign tariffs are likely to

raise the cost of the imported goods for U.S. consumers

Competition Law

-Another term for anti-trust law, used by the EU and other countries -anti-trust laws prevent inappropriately large concentrations of power and its abuse through price fixing, market sharing, and monopolies -US law includes per se concept

protect domestic jobs

-Cheap foreign labor argument is misleading, wages don't account for all production costs -argument has strong emotional appeal

Nonquantitative Nontariff Barriers

-Direct government participation in trade -Customs and other administrative procedures -government and private standards

Ensure fair competition

-Import duty to bring costs of imports up to cost of domestic goods -dont ban imports but equalize them -consumer impact: import duty increases the price they pay

performance of contracts

-No worldwide court has the power to enforce its decrees. -The worldwide courts that do exist, such as the UN's International Court of Justice, rely on voluntary compliance -UN convention on the international sale of goods (CISG) -arbitration resolution process instead of going to court is quicker, less expensive, and more private

Reasons for restricting trade

-Provide for national defense -Impose sanctions -Protect an infant or dying industry -Protect domestic jobs -Ensure fair competition -Retaliate -Increased revenue

Religious Law

-a religious document or source is the basis of the legal system -some prohibit charging interest

trade secrets

-any information that business wants to hold confidential -includes formulas, processes, patterns, designs -most common type of IP protection

Provide for national defense

-certain industries need protection from imports because they are vital to security -economists say this is a weak argument used to gain emotional advantage

Accounting Law

-crisis of confidence: investors wary after worldwide financial scandals -Sarbanes-Oxley Act (SOX) in response to world-wide scandals, sets higher standards for boards, management, and accounting firms.

private consumption

-disposable income: after-tax personal income -discretionary income: amount of income left after paying taxes and making essential purchases

miscellaneous laws

-employees working abroad must be alert to local laws -legal penalties may be harsh -law of home country plays no part in a foreigners arrest

voluntary export restraint

-export quota administered by exporting country -orderly marketing arrangements are formal agreements

Protect an Infant or Dying Industry

-give infant industries a chance to grow and build comparative advantage -without this, lower cost imports will underprice in local market -slow down impact of dying industries, move capital into other sectors

Trade Obstacles

-includes political, financial, and legal obstacles -packaging and language requirements -tariffs, quotas, voluntary export restraints

impose sanctions

-inflict economic damage, punish, or encourage change in behavior -seldom achieve their goal -produce collateral economic damage

economic analysis for multinationals

-more complex than those for a purely domestic firm. There are many economies to consider instead of just one, there are interactions between them, and values are highly divergent -purpose is to assess the overall outlook for the economy and the impact of economic changes on the firm -should include economic data on actual and prospective markets

personal consumption

-ownership of goods -consumption of key materials

Rule of Law

-principle that the law applies to everyone, even those who govern -countries based on this law encourage foreign investment -these countries tend to protect human rights of citizens, an increasing global concern

Common Law

-relies on previous court decisions and interprets statutes and regulations -relationship between judicial decisions and statutes can be complex due to precedents -more adversarial, but more flexible, than civil law

total population

-the most general indicator of potential market size -first characteristic of the population that analysts examine. -population size alone poor indicator of economic strength and market potential

Civil Law

-the system of law concerned with private relations between members of a community rather than criminal, military, or religious affairs. -derived from ancient roman law and influenced by religious law -most widespread system globally

Tort Law

-tort is an injury on another person either intentionally or negligently -product liability standards hold a company and its officers and directors liable and subject to fines or jail when their product causes death, injury, or damage -strict liability standards hold the designer or manufacturer liable for damages caused by a product without the need for proof of negligence in the products design

principles of common law

1) The rights of the individual exist alongside those of the state 2) The trial is adversarial 3) The defendant is presumed innocent until proven guilty 4) Case law develops through judgments and precedents 5) Case law co-exists with statute law and—in most cases—a constitution 6) Crimes are punished and civil wrongs are rectified by compensation

tariff barriers

1) ad valorem duty 2) specific duty 3) compound duty 4) variable levy

legal concerns in global business

1) extraterritoriality 2) Performance of contracts 3) litigation

Types of International Law

1) public international law: governs relationships between governments 2) Private international law: governs relationship between individuals and companies that cross international borders

Types of Non-Tariff Barriers

1) quantitative barriers 2) voluntary export restraints 3) non-quantitative barriers

Types of Legal Systems

1. Common Law 2. Civil Law 3. Religious law

Types of counter measures

1. Know country and region so risk assessment is realistic 2. insurance and outsourced skills, such as hostage negotiations, as needed to cope with crisis 3.train for daily living skills: varying driving routes, awareness of surroundings, antiterrorism training

retaliate

1. predatory dumping 2. social dumping 3. environmental dumping 4. subsidies 5. countervailing duties

A specific duty is a A. fixed sum charged for a specified number of units of the product. B. stated percentage of the invoice of the product. C. duty established for a given, articulated reason. D. rate charged in excess of a compound duty.

A

Agricultural trade restrictions A. exist in most countries. B. exist in centralized economies only. C. exist mostly in developing economies. D. are no longer a part of common trade restrictions.

A

Among the cybercrimes that most often target businesses are A. hacking and data espionage. B. check kiting. C. prospecting and phishing. D. accessing unauthorized accounts.

A

An argument against using trade restrictions to punish an offending nation is that A. sanctions seldom achieve their goal of forcing change in the offending country.

A

An example of retaliatory trade restrictions is A. the U.S. response to the EU ban of hormone-treated beef.

A

An example of the use of trade as a political weapon is A. sanctions on Russia for the occupation of Crimea in spring 2014. B. subsidies to automakers by the U.S. government to rescue them from collapse. C. exorbitant tax rates for repatriated profits in the U.S. D. Apple's exports to Cuba.

A

Canada carved out a NAFTA exception for A. milk and cream tariffs from the U.S. B. tariffs on lumber from the U.S. Northwest. C. imports of agricultural goods from Mexico. D. tariffs on fish from all of the Great Lakes.

A

Counterarguments to the "protect domestic jobs from cheap foreign labor" argument include that A. the labor rate is not all of the labor cost.

A

Country risk assessment is a way to A. estimate the risk to business employees, property, and investment. B. predict risk of marketing errors, given cultural variables. C. predict responses of citizens to new product lines. D. analyze the impact of diversity in a country's workforce.

A

Country risks can be responded to, in part, by A. employee training programs. B. a positive attitude and awareness of cultural differences. C. defensive posturing in most public settings. D. avoiding assignments in the country and using locals only.

A

Democratic nations that follow free-trade capitalism sometimes nationalize businesses, such as A. the U.S. bailout during the 2009 financial crisis, when the U.S. government took control of several large U.S. corporations. B. Canada's purchase of Hershey. C. The French purchase of Totale. D. the move from New York to Russia of a major sports team owned by a Russian.

A

Dumping is A. selling a product abroad for less than its production cost or cost in the home market.

A

Duties may be used to A. encourage local input.

A

Examples of expropriation without compensation involve the following governments: A. the U.S. with Iranian property in the U.S., Cuba with U.S. property in Cuba, and Zimbabwe with land owned by white Zimbabwean citizens. B. China with Hong Kong and Japan with the Kuril Isl. C. the U.K. with the Falklands. D. Canada with northern Maine.

A

Examples of orderly marketing arrangements are A. voluntary export restraints.

A

Government motivation for restricting trade includes A. protecting jobs, promoting defense, imposing sanctions, and protecting infant industries. B. increasing revenues through duties and tariffs. C. a desire for isolationism as a political strength. D. increasing domestic consumption and thereby domestic jobs.

A

Government protection of economic activities is A. an historical function of government.

A

Government stability has to do with A. policies that are permanent or change gradually. B. democratic processes and free elections. C. a commitment to military strength. D. leadership that listens to citizens and responds to their needs.

A

Governments nationalize private firms in order to A. extract money from the firms when the firms are suspected of concealing profits. B. decrease exports to balance the balance of payments. C. learn about business development experientially. D. punish workers at the firms for their political activism.

A

Governments provide stability by A. protecting business from unfair competition and from attacks and theft. B. pursuing open market values. C. fostering competition and capitalist values. D. supporting imports.

A

Home country subsidies can be retaliatory because A. they decrease the operating costs of local manufacturers compared to foreign manufacturers, thereby harming the competitive profile of the foreign firms.

A

In centralized economies (China, Cuba, Vietnam) the government owns a large part of the factors of production A. and the governments of market economies also own businesses. B. unlike in market economies, where the private sector owns businesses. C. and free-trade capitalism offers an alternative, with no government-owned businesses. D. and these centralized economies avoid competition with free-traders.

A

In the U.S., the Smoot-Hawley Tariff Act did not A. outlaw tariffs for U.S. imports.

A

Nuisance tariffs A. annoy importers with red tape, administrative paperwork, and added expense.

A

Nuisance tariffs A. require importers to go through the administrative paperwork, even for a small payment.

A

One critical issue related to ransom is A. whether to pay and possibly save a life, but reinforce the effectiveness of ransom. B. how to fund ransom payments. C. whether ransom is connect to piracy. D. the safety of those who are being held without access to ATMs.

A

One motivation for government privatization is to A. have the businesses run more efficiently. B. punish corporate conglomerates. C. explore alternative revenues. D. exert increased government control.

A

Productivity per worker in economically developed countries tends to be A. higher, due to management skills and advanced technology.

A

Quotas are a quantitative barrier that sets A. limits, established by the importer.

A

Sanctions usually are imposed to A. inflict economic harm on a nation to punish or force change. B. protect an infant industry. C. exact retribution for past conflicts. D. increase the cost of doing business in the sanctioned nation for foreign competitors.

A

Social dumping occurs when exporting producers A. have lower wage rates, social costs, and environmental regulations. B. allow for free migration, thereby exporting poverty. C. allow the import of environmentally sensitive waste. D. take knowing advantage of a social class system.

A

Some nontariff barriers are difficult to discourage because A. they are non-quantitative and consist of government subsidies and standards. B. their development has been supported by local politicians. C. they build on nationalism and patriotism. D. their development has been unsupervised.

A

Tariff barriers may be used to A. protect domestic industry from foreign, lower-cost producers.

A

Tariffs may be set to A. encourage local input. B. decrease the import costs. C. stimulate imports. D. decrease consumer costs, lower price, and increase market share.

A

Terrorism contributes to A. an unstable environment that is detrimental to business. B. an increase in business opportunities. C. the warning signals on global values clashes. D. religious and political stability.

A

The U.S. allocates quotas to 40 countries for specific tonnages of A. sugar.

A

The cost of cybercrime to the perpetrator is A. exceedingly high, so as to be a deterrent. B. almost nonexistent, because few criminals are apprehended. C. difficult to determine, because security issues prohibit publication of trials. D. negligible, because few laws have been updated to include cybercrime.

A

The cybercrime context is A. fluid, so the learning process is ongoing, because cyber criminals are bright and quick. B. relatively static, so a firewall can be effective for a good six months in this environment. C. rapidly evolving, so that cybercrime will soon be eliminated. D. increasingly competitive, with switchovers between security personnel and criminals.

A

The main goal of tariffs is to A. increase the selling price of imported goods, thereby reducing competition for domestic producers. B. raise revenues for the importing government. C. reduce earnings for the exporting government. D. penalize importers for not buying domestic goods.

A

The most common form of direct government participation in trade is A. the subsidy.

A

The national defense argument for trade restrictions suggests that A. some industries, even if they are not competitive, may need protection from imports.

A

The sectors most frequently attacked by cyber criminals include A. defense, energy and utilities, and finance. B. retail. C. oil and gas. D. the auto industry.

A

developed economies

A classification for high-income industrialized nations, which have high living standards and the most technically developed infrastructure

developing economies

A classification for the world's lower-income nations, which have less technically developed infrastructures and lower living standards

compound duty

A combination of specific and ad valorem duties

specific duty

A fixed sum levied on a physical unit of an imported good

Purchasing Power Parity

A means of adjusting the exchange rates for two currencies so the currencies have equivalent purchasing power

population distribution

A measure of how the inhabitants are distributed over a nation's area

population density

A measurement of the number of people per given unit of land

trade names

A name used by a merchant or manufacturer to designate and differentiate its products ex) taco bell and pizza hut are trade names for Yum! Brands Inc.

WIPO (World Intellectual Property Organization)

A specialized agency of the United Nations and attempts to resolve international commercial disputes about intellectual property between private parties.

A large international debt may cause a government to A. impose wage controls. B. increase government spending. C. eliminate price controls. D. restrict bankers' ability to issue debt. E. start a trade war.

A.

According to the text, population size A. provides a basis for estimating consumption of low-priced, mass-consumption products, such as cigarettes and soap. B. and GNI/capita are necessary for estimating consumption of low-priced, mass-consumption products such as soap and soft drinks. C. alone is insufficient for estimating consumption of any product. D. and employment rates are sufficient for estimating consumption of low-priced, massconsumption products such as soap and economy automobiles. E. is an excellent indicator of economic strength.

A.

According to the text, primary reasons for relative changes in labor costs include increases or decreases in A. compensation. B. total output. C. inflation rates. D. hours worked. E. level of education.

A.

According to the text, primary reasons for relative changes in labor costs include increases or decreases in A. hours worked. B. total output. C. inflation rates. D. exchange rates. E. level of education.

A.

According to the text, the highest percentage of population in urban areas by the year 2030 will be in A. more developed regions. B. less developed regions. C. emerging markets. D. least developed countries. E. more agrarian societies.

A.

Because of the importance of economic information to the control and planning functions at headquarters the collection of data and preparation of reports is usually the responsibility of A. the home office. B. economists in the subsidiaries where changes are occurring. C. economic consultants. D. government economists. E. industry associations.

A.

From comparisons of income distribution studies over time, it generally appears that A. income is more evenly distributed in the richer nations. B. there are few variations in income distribution among developed and developing nations. C. comparisons over time demonstrate that income redistribution changes relatively quickly, so older data have limited value. D. the middle quintiles in most nations are growing at the expense of the bottom 20 percent. E. income inequality decreases in the early stages of development and reverses in the later stages.

A.

Generally, because of higher birth and fertility rates, developing countries have more _________ populations than industrial countries. A. youthful B. mature C. healthy D. unhealthy E. ethnically diverse

A.

Income distribution studies confirm the belief that, generally, income is more evenly distributed in the A. richer nations. B. developing nations. C. newly industrialized nations. D. Pacific Rim nations. E. African nations.

A.

Japan is mentioned in the age distribution section because A. it is the fastest-graying nation in the industrial world. B. in the future it may have almost as many retirees as children. C. its declining population means that the country's wealth will be spread among a smaller number of people, increasing its overall prosperity. D. its declining population means that the country's social security funds will last a longer amount of time. E. its increasing fertility rate will allow it to compensate for an increased number of aged people.

A.

Most developed nations share the following characteristic(s): A. technological dualism. B. high productivity and incomes in some regions and little economic development in others. C. unequal distribution of income. D. a large and dominant share of total output coming from manufacturing. E. a substantial middle class.

A.

Most developing nations share the following characteristic(s): A. unequal distribution of income, with a very small middle class. B. a broad range of products for export, usually based on basic manufacturing. C. high savings rates. D. a productive agricultural sector that supports much of the population. E. political stability based on a nondemocratically elected government.

A.

The ________ includes all the uncontrollable forces originating outside the home country that surround and influence the firm. A. foreign environment B. international environment C. host country environment D. global environment E. alien environment

A.

The percentages of household expenditures spent on food and beverages by residents of industrialized nations are _______________ the percentages spent by residents of developing nations. A. half B. twice C. equal to D. triple E. two-thirds

A.

The ratio between the number of older people and younger people, on whom elders are dependent to supply the funds to provide social security benefits, is called the ___________. A. dependency ratio B. grandparent dilemma C. population distribution D. population density E. graying challenge

A.

When measuring the value produced in an economy, most international organizations prefer to use A. GNI. B. GDP. C. GNP. D. PPP. E. Gini.

A.

Where GNI increases faster than the population A. there probably is an expanding market. B. the market is probably contracting. C. the country where this occurs may be subject to political unrest. D. the market is becoming less attractive for business. E. there is probably a surplus of technical and university graduates.

A.

Which of the following is not true regarding the Atlas conversion factor? A. It was developed to reduce the impact of inflation-based changes on GNI estimates. B. It is the arithmetic average of the current exchange rate and the exchange rates in the two preceding years, adjusted by the ratio of domestic inflation to the combined inflation rates of the euro zone, Japan, the United Kingdom, and the United States. C. Incomes measured by the Atlas conversion factor are generally more stable over time. D. Changes in income rankings are more likely to be due to relative economic performance than to fluctuations in the exchange rate. E. Dissatisfaction with both the PPP and conversions using official exchange rates caused the World Bank to adopt the Atlas methodology to derive per capita GNI estimates.

A.

__________ is/are straining the social security systems of Japan and other industrialized nations. A. Early retirements B. The fact that retirees are working longer C. The fact that the birth rate is increasing D. The growing number of people in the workforce E. Decreasing lifespans

A.

WIPO is a: A. UN agency that administers intellectual property treaties and advises countries on intellectual property-related administrative issues. B. WTO group opposed to patent extension and pro-generic. C. part of the Club of Rome that lobbies for longer patent periods. D. a research arm of the fuel cartel that has been advocating longer patent protection for biofuel processing systems. E. creation of the Paris Union.

A. UN agency that administers intellectual property treaties and advises countries on intellectual property-related administrative issues.

The United States and the EU: A. both apply antitrust law extraterritorially. B. both oppose the Japanese Anti-Monopoly Law. C. share a commitment to the per se concept in law. D. two of the above. E. all of A, B, and C.

A. both apply antitrust law extraterritorially.

The Foreign Corrupt Practices Act has: A. carried the discussion of transparency and corruption out into the open. B. impaired American competitiveness abroad. C. jailed legions of corrupt foreign executives in the United States. D. introduced clear, concise terminology into the discussion of corruption. E. been based on the United Kingdom Bribery Act.

A. carried the discussion of transparency and corruption out into the open.

In the U.S. court system, tort claims may result in: A. exceedingly large awards. B. lower liability insurance. C. a reduction in strict liability. D. reduced liability insurance costs for foreign companies. E. none of the above.

A. exceedingly large awards.

Patents are government grants that give the owner: A. exclusive rights to use, sell, manufacture, or exploit the invention or process. B. the exclusive right to use the fundamental ideas on which the invention is based. C. the right to sell the invention, but only beyond the patent-granter's borders. D. rights to the invention but do not prevent others from copying the invention. E. two of the above.

A. exclusive rights to use, sell, manufacture, or exploit the invention or process.

The EU applies its competition policy: A. extraterritorially. B. only within the EU. C. within the EU and applicant states. D. within the EU and other European nations. E. none of the above.

A. extraterritorially.

Patent trolling is the process of: A. looking for loopholes in patent protection and exploiting them. B. recording and registering patents in foreign countries to protect the firm's IP. C. searching out patents that have expired and negotiating their replacements. D. legal research that uncovers obscure, deceased patent holders and liberates their inventions. E. none of the above.

A. looking for loopholes in patent protection and exploiting them.

Unlike antitrust or competition proceedings in the EU, in the United States such proceedings: A. may involve civil and criminal penalties. B. are heard at the local level. C. involve the top management team. D. are headed by a three-judge panel. E. two of the above.

A. may involve civil and criminal penalties.

Arbitration is a private solution that is: A. often preferred by foreign litigants because it is perceived as fairer, faster, cheaper, and more confidential than are the courts. B. favored by international unions. C. recommended by the UN for international companies facing litigation in developing countries. D. two of the above. E. all of A, B, and C.

A. often preferred by foreign litigants because it is perceived as fairer, faster, cheaper, and more confidential than are the courts.

One difference between the U.S. and EU approaches to antitrust law is that: A. the United States follows the per se concept, wherein actions are illegal whether they have done harm. B. the EU forbids market dominance by cartels, no matter the conditions, whereas the United States does not. C. the U.S. focus is on impact on competition, whereas the EU focus is on the consumer. D. the EU avoids competition, whereas the United States seeks it. E. the EU emphasizes the prevention of price fixing, while the United States does not.

A. the United States follows the per se concept, wherein actions are illegal whether they have done harm.

With patents: A. there is standardization, to some degree, through the Paris Union. B. there is no standardization, so often companies such as Nestlé file many patent applications in different countries. C. total harmonization has been reached through UN accords and the EPO. D. an inventor is automatically granted rights to her invention as long as she completes a patent filing. E. the first person to file is the one who receives patent protection.

A. there is standardization, to some degree, through the Paris Union.

The concept of strict liability, as found in the U.S. legal system, applies: A. to harm done by the designer/manufacturer without the need to prove negligence. B. to harm done within narrow limits, considering the design of the product. C. to children harmed by products in both the United States and the EU. D. strictly to harm caused by the designer/manufacturer, so no penalties outside of damages can be awarded. E. none of the above.

A. to harm done by the designer/manufacturer without the need to prove negligence.

Terrorism

Acts of violence designed to promote a specific ideology or agenda by creating panic among an enemy population

Which type of subsidies are currently the focus of the World Trade Organization?

Agriculture

international economic analysis

All firms must conduct economic analysis and should provide economic data on both actual and prospective markets.

foreign environment

All the uncontrollable forces originating outside the home country that surround and influence the firm

Predatory Dumping

An anti-competitive business practice in which foreign companies price their products below market value to increase sales and force domestic competition out of business, then raise their prices.

Country Risk Assessment

An assessment of a country's economic situation and politics to determine how much risk to employees, property, and investment exists for the firm doing business there

variable levy

An import duty set at the difference between world market prices and local government-supported prices

The practice of terrorism contributes to

An unstable environment that is detrimental to business

Cybercrime

Any illegal Internet-mediated activity that takes place in electronic networks

Barriers to trade A. are a political issue, but don't affect the cost of imports except marginally. B. cost consumers billions of dollars per year. C. save jobs in unprotected industries at $231,289 per job per year. D. None of these responses completes the phrase accurately.

B

Businesses that conduct country risk assessment do so A. as part of their legal profile. B. to protect their assets, including people and property. C. to satisfy their top management teams. D. because, much as with executive salaries, there is a herd mentality.

B

Country risk assessment is a measure of the A. threat of nationalization. B. threat of losing an investment or not being paid. C. kidnapping rate. D. rate of unfunded exposures.

B

Customs procedures in many countries often A. are transparent and fair. B. discriminate against imports and favor exports. C. are online and impersonal. D. aid importers and exporters in estimating their total costs

B

Import duties can be set to encourage A. increased imports based on sales volumes. B. local input. C. price fixing. D. imports from other suppliers.

B

Nationalization and privatization are B. opposing trends.

B

Non-quantitative nontariff barriers A. are not counted as nontariff barriers. B. often involve government participation in trade, especially in customs and other administrative procedures.

B

Sanctions against nations are A. not a form of trade restriction because the motivation is political. B. a form of trade restriction that has economic and political impact. C. ineffective, because other nations will violate them. D. a way to conduct peaceful trade without disturbing commerce.

B

Social dumping occurs when an exporting country B. creates unfair competition based on lower costs because the exporting country provides little social support system to the worker.

B

Subsidies are problematic because they B. aid a nation's export businesses or protect its domestic businesses from imports.

B

The primary motivation of tariffs is to A. raise government revenue at the cost of importers. B. raise the price of imports, to protect domestic goods.

B

The trend for firms in regard to country risk assessment (CRA) is to B. concentrate much more on CRA in making decisions about foreign activities.

B

Trade barriers create costs that are paid ultimately by the A. government erecting the barrier. B. consumer. C. country exporting the goods. D. exporter.

B

Unlike quotas, voluntary export restraints (VERs) are imposed by A. the importing country's government. B. the exporting country's government. C. either the importing or exporting country's government; what matters is that they are voluntary. D. the importing company.

B

What is the role of the home country in risk assessment? B. It is a significant consideration.

B

A large international debt may result in A) reduction in the level of component production at the local level. B) decreased levels of foreign exchange available for importing components for local assembly. C) increased numbers of importers. D) growing levels of sales by home country factories that sell to the subsidiary in the indebted nation.

B) decreased levels of foreign exchange available for importing components for local assembly

A measure of an economy's size based on the market value of goods and services produced within a nation in a year is A. net national income. B. gross domestic product. C. gross national product. D. gross national income. E. the Gini coefficient.

B.

A measure of the degree to which family income within a country is distributed equally is A. gross national income. B. the Gini index. C. gross domestic product. D. the Atlas conversion factor. E. purchasing power parity.

B.

According to the book, economic analyses become more complex when a firm enters overseas markets because, unlike the situation for a company operating domestically A. the uncontrollable economic variables must be forecast. B. management must operate in two new environments, foreign and international. C. economists know less about foreign exchange rates. D. analysts must now forecast the values for both socioeconomic and economic variables. E. both the uncontrollable economic variables must be forecast and economists know less about foreign exchange rates.

B.

According to the text, a large international debt may result in A. reduction in the level of component production at the local level. B. decreased levels of foreign exchange available for importing components for local assembly. C. increased numbers of importers. D. growing levels of sales by home country factories that sell to the subsidiary in the indebted nation. E. increasing consumer confidence.

B.

According to the text, an examination of the world's population and predictions for future populations suggests that which of the following countries will not experience a significant decline in its population by 2050? A. Japan B. The United States C. China D. Italy E. Russia

B.

According to the text, scarcity of foreign exchange can affect even firms that merely export to nations with high foreign debt because A. the government cannot borrow more money to pay for the exports. B. governments of those nations are likely to impose import restrictions. C. their export sales will depend on the ability of those governments to borrow foreign exchange. D. they will have to pay more for their foreign exchange. E. their wage rates will increase significantly.

B.

According to the text, the market analyst may determine a country is not a good market by making a simple calculation based on A. GNI/capita, total population, and the size of the hidden economy. B. GNI, total population, and income distribution. C. GNI/capita, population by state or province, and the number of pharmacies. D. Pet sales, number of CD players, and per capita lint production. E. GDP, GDP growth rate, and tax burden.

B.

According to the text, unit costs of labor will decrease even though the firm is required to pay more to workers, provided A. management compensation decreases significantly. B. productivity increases fast enough. C. advertising costs are proportional. D. interest rates rise slowly. E. government regulations are eliminated.

B.

According to the text, which of the following is not one of the rationales for why most seasoned managers supplement their analyses by looking at economic growth rates as well as measures of an economy's absolute size? A. Emerging and developing economies grew more than three times faster in 2012 and 2013 than did developed economies. B. GNI forecasts on their own are of no value to managers conducting economic analyses. C. Forecasts suggested that emerging and developing economies would grow at more than double the rate of developed economies in 2014 and 2015. D. Data such as overall GNI or GNI per capita can provide a snapshot of the size of an economy, but they fail to inform a manager about whether and how fast an economy is growing, or perhaps even shrinking. E. Rapid and rising economic growth rates suggest consumer demand, which often indicates that trade and foreign direct investment are likely to increase as well.

B.

Dissatisfaction with both the purchasing power parity (PPP) and conversions using official exchange rates caused the World Bank to adopt what methodology to derive per capita GNI estimates? A. Gini coefficients. B. Atlas conversion factors. C. The inflation-growth coefficient. D. The Zurich formula. E. The Human Development Index.

B.

From comparisons of income distribution studies over time, it appears that in early stages of development A. income inequality decreases. B. income inequality stays the same. C. the upper and lower quintiles grow at the expense of the middle quintile. D. the middle quintile grows at the expense of the upper and lower quintiles. E. The upper quintiles grow at the expense of the middle and lower quintiles.

B.

Generally, because of higher birth rates, A. developed nations have more youthful populations than do developing nations. B. developing nations have more youthful populations than do developed nations. C. there is an increasing demand in developed nations for products used in schools and for products used by children. D. the developed nations provide growing markets for transportation systems, fertilizer, and appliances. E. the developed nations will have increased demand for medical care and related products.

B.

International economic analyses A. provide data to governments regarding a company's prospective markets. B. should providing economic data on actual and prospective markets. C. are focused on economic conditions of nations in which a company's major competitors are located. D. rely on published government data for input. E. are primarily prepared for use by governments.

B.

Reductions in birth rates are occurring worldwide because A. governments are scaling back family planning programs. B. of an increased level of urbanization. C. women are experiencing a decline in status. D. governments are encouraging higher levels of marriage and at earlier ages. E. of declining levels of health and education in many nations.

B.

The ________ includes the interactions between domestic and foreign environmental forces, or between sets of foreign environmental forces when an affiliate in one country does business with customers in another. A. foreign environment B. international environment C. host country environment D. global environment E. alien environment

B.

The amount of income left after paying taxes and making essential purchases is known as A. personal savings. B. discretionary income. C. personal income. D. disposable income. E. free cash flow.

B.

The highest rates of urbanization are occurring in A. high-income countries. B. low- and middle-income nations. C. heavily populated nations. D. thinly populated nations. E. post-industrial nations.

B.

The percentage of the population living in urban areas is A. increasing in high-income nations, but decreasing in low- and middle-income nations. B. increasing everywhere. C. increasing in low- and middle-income nations, but decreasing in high-income nations. D. becoming younger because older people retire to urban areas. E. increasing in low- and high-income nations, but stable in middle-income nations.

B.

The percentages of household expenditures spent on consumer durables by residents of industrialized nations are _______________ the percentages spent by residents of developing nations. A. half B. twice C. equal to D. triple E. two-thirds

B.

The rate of growth of GNI/capita may be more important to marketers than just GNI/capita because A. a stable rate indicates low risk for entry. B. a high rate indicates a fast-growing market. C. a high rate indicates economic instability. D. low rates indicate political stability. E. it indicates how much investment will be needed for entry.

B.

Which of the following is not true about India, according to the text? A. India has 300 million people 20 to 34 years of age. B. India has a total population of 1.27 billion people, the third largest in the world. C. India has 150 to 200 million people who are completely fluent in spoken English. D. India has 6.1 students in college, versus only 3.4 million college students in China. E. India generates 13 percent of its GDP from the manufacturing sector, versus 30 percent for China.

B.

_____________ birth rates are welcomed by governments in some developing nations, but are causing concern in industrialized nations. A. Rising B. Level C. Declining D. Erratic E. Stable

B.

Running afoul of miscellaneous laws in a foreign country is: A. easily understood and forgiven by foreign police. B. a serious error, so the local law should be known. C. not a major issue, since the embassy can work out your release. D. not a serious issue because your country and company stand behind you. E. none of the above.

B. a serious error, so the local law should be known.

The U.S. antitrust law contains both civil and criminal penalties: A. neither of which can be applied outside the United States. B. and the criminal penalties apply to foreign companies even if the conspiracy took place outside the United States. C. but their application to foreign companies is limited to actions that have taken place within the United States. D. and they can be administered by foreign courts. E. and they are enforced through the United Nations

B. and the criminal penalties apply to foreign companies even if the conspiracy took place outside the United States.

In the United States and EU, attitudes toward competition: A. are quite similar. B. are based on differing assumptions, with the United States following a per se concept and the EU concerned about the existence of harm. C. differ because the EU is anticompetitive; its Commission on Competition ensures competition isn't too severe. D. differ on the role of market dominance, with the United States supporting it and the EU wanting to avoid it. E. are both focused on prevention of price fixing.

B. are based on differing assumptions, with the United States following a per se concept and the EU concerned about the existence of harm.

The Alien Tort Statute allows foreigners to: A. sue in U.S. courts for residency in the United States. B. file claims in U.S. courts for violations of international law that may have occurred beyond U.S. borders. C. file claims in U.S. courts for alleged violations of foreign laws. D. file claims against other foreign nationals for violations of U.S. EEOC law. E. avoid prosecution from U.S. laws as long as they live, work, and have citizenship in another country.

B. file claims in U.S. courts for violations of international law that may have occurred beyond U.S. borders.

Antitrust law is intended to: A. challenge successful businesses to allow proper levels of competition. B. prevent large concentrations of economic power, such as monopolies. C. create a more trusting business environment. D. allow socialism to flourish. E. two of the above.

B. prevent large concentrations of economic power, such as monopolies.

Laws governing transactions of individuals and companies that cross international borders are: A. none of B, C, D, or E. B. private international law. C. product liability law. D. public international law. E. customary law.

B. private international law.

The Foreign Corrupt Practices Act is U.S. legislation that: A. outlines bribery practices that are allowed abroad but not in the United States. B. prohibits bribery by American companies abroad. C. allows bribery in foreign dealings when culturally sanctioned. D. outlines and prohibits foreign bribery practices by foreign nationals in foreign nations. E. clearly states the basis for illegal bribery.

B. prohibits bribery by American companies abroad.

Enforcing contracts that cross international borders is: A. simply a matter of applying the local law to the contract. B. quite complicated and governed in most nations by the CISG. C. the responsibility of Interpol. D. secondary to who has possession of the goods, regardless of title. E. nearly impossible, so negotiation is important.

B. quite complicated and governed in most nations by the CISG.

Both the ISO and the IEC promote: A. harmonization in international accountancy. B. standardization in technology-related fields through specifications. C. union membership in fields that are technology-intensive. D. shared bankruptcy standards across the globe. E. none of the above.

B. standardization in technology-related fields through specifications.

Trade names are protected under: A. national laws in all UN member countries. B. the International Convention for the Protection of Industrial Property. C. many local laws in most countries, so illegal trademark use is a local issue. D. long-standing convention, but no legal agreements. E. the UN's Office of Harmonization.

B. the International Convention for the Protection of Industrial Property.

Antitrust laws differ among countries, and complying with them is often difficult for the firm, so: A. international firms have had to increase their legal staff to ensure compliance. B. the U.S. government is pushing for a world organization to clear antitrust issues. C. firms have moved toward fewer mergers and more regionalized organizations. D. firms expect to be in antitrust litigation and act accordingly. E. two of the above.

B. the U.S. government is pushing for a world organization to clear antitrust issues.

Legal uncertainties have affected international business, and: A. they have prevented IB growth. B. they have not, though, slowed down the growth of IB; instead, they have made it more complex. C. prices and insurance costs have risen. D. fewer large businesses want to be involved across national borders due to the uncertainties of the legal environment. E. none of the above.

B. they have not, though, slowed down the growth of IB; instead, they have made it more complex.

If two English multinational companies had a dispute arising in New York City, and there were no choice-of-law or choice-of-forum clauses in their contract, it is likely that: A. a New York court would hear their complaint. B. they would bring their dispute to an English court. C. the dispute would get heard not in court but, rather, in the boardrooms. D. they would reach an agreement informally and develop an off-the-books settlement. E. they would bring their dispute to the World Court for adjudication.

B. they would bring their dispute to an English court.

U.S. antitrust law is applied: A. to all firms based in the United States, but not others. B. to all firms, including extraterritorially. C. only to U.S.-owned firms with assets in the United States. D. to all firms, as long as they have assets in the United States. E. all of the above.

B. to all firms, including extraterritorially

If an international manager runs afoul of a miscellaneous law while working abroad, calling the embassy: A. will ensure that the charges are dropped. B. to let an official know of the situation may be a good idea, but usually the embassy cannot help much. C. will lead to meetings that will arrange for everything. D. to explain the various cultural values in your homeland to the foreign government official is a reasonable approach. E. will result in the application of American law to the resolution of the problem.

B. to let an official know of the situation may be a good idea, but usually the embassy cannot help much.

Usually, it is reasonable to assume that foreign law: A. will be similar to U.S. law. B. will differ from U.S. law and must be understood. C. won't matter because you and your trading partner will agree to arbitrate. D. will be biased against the foreigner. E. will vary but that U.S. law will take precedence.

B. will differ from U.S. law and must be understood.

Although the U.S. supports free trade, since 1789 it has supported tariffs to protect domestic A. wheat. B. palm oil. C. sugar. D. corn.

C

Dumping includes C. selling goods priced lower in a foreign market than in the home market to build market share.

C

Government stability is a characteristic of a government that A. makes sudden radical policy changes. B. readily shifts alliances to maintain power. C. maintains predictability in fiscal, monetary, and political policies. D. maintains authoritarian rule over an extended period of time.

C

International business can be a power political force, in part because A. a recent Supreme Court ruling in the U.S. allows corporate contributions to political campaigns. B. many top management team members are willing to accept roles with national security agencies. C. about half of the world's 100 largest economic units are firms. D. business is all about achieving political goals.

C

The U.S. has been concerned about dumping and C. became one of the first countries to prohibit dumping into its own market, in 1916.

C

The national defense argument for trade restrictions has been used in the U.S. to argue for restriction on exports A. of subway cars. B. of uniforms. C. of high technology items. D. of ethanol.

C

Transshipping is used to C. evade allocated quotas. D. evade local manufacture requirements.

C

A measure of how a nation's income is apportioned among its people is A. gross national income. B. gross domestic product. C. income distribution. D. the Atlas conversion factor. E. purchasing power parity.

C.

According to the book, what is the purpose of economic analyses? A. To anticipate political developments within and across countries. B. To forecast exchange rates. C. To assess the overall outlook for the economy and the impact of economic changes on the firm. D. To anticipate the rate at which companies will develop new competitive strategies. E. To provide well-paying jobs for economics graduates.

C.

According to the text, a large international debt may cause a government to A. remove wage controls. B. increase government spending. C. impose price controls. D. reduce debt payments. E. print more money.

C.

According to the text, relative changes in wage rates among nations may cause the multinational firm to A. choose new exchange rates. B. reduce the number of workers. C. change its sources of supply from one country to another. D. install labor-saving machinery. E. eliminate product lines.

C.

Because ____________ consumer expenditures eliminate differences in relative prices, marketers use these data to analyze how the composition of consumption changes with the level of development. A. normalized B. inflation-free C. PPP-based D. historical-cost E. growth adjusted

C.

Examples of socioeconomic data are A. GNI, GNI/capita, income distribution. B. total population, population density, and population distribution. C. GNI/capita, total population, and population distribution. D. total population, income distribution, and population density. E. GNI growth rates, GNI income/capita, and income distribution.

C.

GNI/capita, a crude estimate of purchasing power, must be further refined by A. an examination of the amount of income tax paid. B. a census to determine the total population. C. incorporating data on how the national income is actually distributed. D. determining the amount of discretionary income. E. calculating the amount of tax avoidance by individuals and corporations.

C.

If a nation's GNI is small, but a small percentage of its population receives a large percentage of that income A. it may be a good market for high-priced industrial products. B. it may be a good market for high-volume, high-priced consumer products. C. it may be a good market for low-volume, high-priced luxury products. D. it is unlikely to be a promising market. E. then there will be good growth in the future.

C.

Reductions in birth rates are occurring worldwide because A. governments are scaling back family planning programs. B. of a reduced level of urbanization. C. women are gaining an enhanced status. D. governments are supporting alternatives to marriage. E. of declining levels of health and education in many nations.

C.

The Human Development Index is based on what three essential elements of human life? A. A long and healthy life, the ability to acquire quality medical care, and access to resources needed for a decent standard of living. B. Access to affordable education, the ability to acquire quality medical care, and access to resources needed for a decent standard of living. C. A long and healthy life, the ability to acquire knowledge, and access to resources needed for a decent standard of living. D. A long and healthy life, the ability to acquire knowledge, and affordable rates of taxation. E. A limited level of government restrictions over its people, strong adherence to principles of free trade, and equal access to education and health care.

C.

Unit labor costs will not rise in unison with wage rates if A. the governments institute wage and price controls. B. productivity decreases faster than wages increase. C. the gains in productivity are greater than wage increases. D. interest rates rise less than wage rates. E. advertising costs decline.

C.

Which of the following is true regarding the Big Mac Index? A. It is an index calculated by McDonald's to determine if their Big Mac sandwiches are properly priced within international markets. B. It calculates a per capita level of Big Macs that are sold in various countries of the world. C. It can indicate whether a particular currency is undervalued. D. It compares the value of a Big Mac to other items in a basket of goods economists traditionally use for economic analyses. E. It provides the empirical foundation for a trickle-down theory of economics called Burgernomics.

C.

_______ refers to 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. A. Gross domestic product B. Gross domestic income C. Gross national income D. Net national product E. Goods and services income

C.

__________ is a measure of how the inhabitants are distributed over a nation's area. A. Urbanization B. Population size C. Population distribution D. Population density E. Population

C.

The main source(s) of international law is(are): A. the UN International Court of Justice. B. the U.S. Supreme Court and the EU Court of Justice. C. bilateral and multilateral treaties, along with customary law. D. nonexistent. E. the WIPO.

C. bilateral and multilateral treaties, along with customary law.

The FCPA has: A. hurt American business because managers cannot use bribes anymore. B. challenged the creativity of American managers and consultants to develop ways to work around the FCPA. C. brought the discussion of bribery into the open, which has, overall, been positive. D. resulted in American foreign business going to Japanese and German businesses. E. eliminated bribery in international business.

C. brought the discussion of bribery into the open, which has, overall, been positive.

A patent gives the inventor: A. property rights for 10 years. B. the right to use the invention until development costs are recouped. C. exclusive rights to manufacture, exploit, use, and sell the invention for a given time period. D. the right to keep the patented process but not the product for five years. E. two of the above.

C. exclusive rights to manufacture, exploit, use, and sell the invention for a given time period.

The end result of legal trade obstacles is often: A. limited trade, with the recipient of the obstacles withdrawing. B. political negotiations between the two countries, to smooth relations and reduce costs. C. higher costs to consumers. D. lower taxes to citizens due to tariff revenues. E. none of the above.

C. higher costs to consumers.

Where litigation in international disputes should occur is: A. usually evident from the documentation available. B. at times unclear, in which case the UN International Court of Justice will make a jurisdictional ruling. C. often complex, so contracts should include choice-of-law and choice-of-forum clauses. D. dictated by where the problem arose; a problem arising in India is adjudicated in India. E. determined by a jury during pretrial discovery.

C. often complex, so contracts should include choice-of-law and choice-of-forum clauses.

Smaller nations would like patent protection: A. extended, to allow them to build their competitive advantage. B. extended, so that they can recoup development costs. C. reduced, so that they can enter the game earlier, possibly with generics. D. extended, so that their profits can increase. E. to be the same for government patent holders as for multinational companies.

C. reduced, so that they can enter the game earlier, possibly with generics.

Anyone studying legal forces affecting international business soon realizes that: A. there is a remarkable level of coordination among legal systems in the developed nations. B. most laws are predictable, and that, although there is variance, what constitutes illegal behavior is commonly shared. C. the variety of these forces complicates the task of understanding the laws. D. thanks to the World Court, officials in most legal systems are open to collaborating with their international colleagues. E. none of the above.

C. the variety of these forces complicates the task of understanding the laws.

Some countries impose both an ad valorem duty and a specific duty on a single import. What type of duty are these countries using?

Compound

Trade barriers create costs that are paid ultimately by the

Consumer

A government protects its citizens when they are abroad in the following way: D. Government embassies can provide information and emergency assistance, monitor and where appropriate, make protests.

D

An example of environmental dumping is not found in the D. recycling and processing of Virginia garbage to yield fuel and fertilizer.

D

Arguments for trade restrictions include all but D. sovereignty rights.

D

Government stability refers to all but one of the following of a government: D. ability to adjust to sudden changes by making radical policy changes.

D

Official prices ensure all but that D. corruption will be minimal.

D

The imposition of standards is a way to establish nontariff barriers, and the following are examples of the imposition of standards, except for: D. tariffs on certain barbiturate imports into the U.S.

D

When governments nationalize a firm, they don't seek to D. sell the firm to foreign investors.

D

With privatization, all of these may occur, except D. business loses its right to hire new employees.

D

According to the World Bank, populations in high-income economies use how much commercial energy per capita as do people in developing economies? A. Half as much B. Twice as much C. Five times as much D. Nearly seven times as much E. More than 10 times as much

D.

According to the text, an examination of the world's population and predictions for future populations suggests the following: A. The population of developing countries is nearly half of the world's total population. B. The 10 nations predicted to have the largest populations by the year 2050 are all developing countries. C. Because of low birth rates, developed nations will have a decreased demand for tourism and furniture. D. Because of low birth rates, developed nations will have an increased demand for financial services. E. The nation projected to have the largest population in 2050 is China.

D.

According to the text, commercial energy use per capita is related to the size of which of the following sets of modern sectors? A. Commercial buildings, agriculture, transportation B. Housing, agriculture, industry C. Manufacturing, agriculture, housing D. Urban areas, industry, motorized transport E. Government, agriculture, industry

D.

According to the text, the part of a nation's income that, because of unreporting or underreporting, is not measured by official statistics is known as the A. hidden economy. B. gray market. C. barter system. D. underground economy. E. shadow market.

D.

An important phenomenon that is changing the population distribution everywhere is the A. move to rural areas for simpler, safer living. B. urban-to-rural shift. C. increase in housing costs. D. rural-to-urban shift. E. rise in single parent families.

D.

As a general rule, the underground economy in a country will be bigger when A. tax rates are lower. B. drug use is higher. C. income levels are low. D. government red tape is oppressive. E. economic growth is slow.

D.

Economies with per capita incomes in the low to middle range that are in a transition toward developed status are known as A. undeveloped economies. B. socialist economies. C. high-income economies. D. emerging market economies. E. less-developed economies.

D.

Generally, we can assume that the higher the GNI/capita value A. the lower the tax rate. B. the smaller the population. C. the larger the population. D. the more advanced the economy. E. the higher the growth rate.

D.

Most developed nations share the following characteristic(s): A. disguised unemployment or underemployment. B. access to health care and a wide range of health problems. C. vigorous international trade, especially in agriculture and manufacturing. D. a large base of productive capital. E. plentiful educational opportunities and illiteracy.

D.

Regarding population size as a characteristic for analysts to examine A. Population size alone is an excellent indicator of economic strength. B. Population size alone is a good predictor of demand for consumer durables. C. Population size alone is an excellent indicator of market potential. D. Population size alone is a poor indicator of market potential. E. Population size alone is a poor indicator of market potential for products such as soft drinks.

D.

The World Bank categories countries based on GNI per capita, using the following categories: A. undeveloped economies, developing economies, developed economies. B. developed economies, industrializing economies, developing economies. C. developing economies, newly industrializing economies, developed economies. D. high-income economies, middle-income economies, low-income economies. E. less developed economies, more developed economies.

D.

The after-tax personal income of consumers is known as A. personal savings. B. discretionary income. C. personal income. D. disposable income. E. free cash flow.

D.

The percentages of household expenditures spent on transportation, communication, and health care by residents of industrialized nations are _______________ the percentages spent by residents of developing nations. A. half B. two-thirds C. equal to D. twice E. triple

D.

Which of the following is not true about China, compared to India? A. China has 1.12 million millionaires versus 182,000 in India as of the beginning of 2014. B. China is ranked third in the world in sales of luxury goods, ahead of India. C. China has a larger population, at 1.37 billion people, than does India. D. China attracted five times more foreign direct investment from 2000 to 2013 than did India. E. China has a higher level of manufacturing productivity than does India.

D.

Which of the following is not true regarding the underground economy? A. On average, for the 2000 to 2012 time period, it is estimated that the underground economy accounted for between 16 and 17 percent of GDP in OECD countries. B. On average, for the 2000 to 2012 time period, it is estimated that the underground economy accounted for between 30 and 50 percent of GDP in emerging economies. C. The underground economy is estimated to have exceeded 60 percent in Bolivia, Panama, and Zimbabwe. D. The underground economy in the United States decreased from 8 percent of GDP in 1970 to less than 4 percent in 2003. E. Large underground economies can create problems for public policy makers.

D.

__________ is a measure of the number of inhabitants per area unit. A. Urbanization B. Population size C. Population distribution D. Population density E. Population

D.

WIPO and TRIPS represent: A. patent harmonization agreements in Southeast Asia and the EU, respectively. B. anticounterfeiting agreements in Korea and North America, respectively. C. WTO and UN agreements on IP. D. UN and WTO agencies or programs that focus on IP. E. international governments during litigation at the World Court.

D. UN and WTO agencies or programs that focus on IP.

Intellectual property: A. excludes intangibles, which is why it is a difficult area. B. includes thoughts and ideas, but not tangible products. C. includes anything that is a result of a creative process that does not have material qualities. D. includes anything that is the result of things created using someone's intellect. E. excludes things found in nature, such as natural colors, scents, and sounds.

D. includes anything that is the result of things created using someone's intellect.

Patent trolls are: A. a record of all patents, recorded by the UN. B. the numerical controls issued on patents, standardized by the Paris Convention. C. the organizing system for patent review that is kept internationally by the OECD. D. modern highway robbers who exploit loopholes in IP protection. E. the framework used for filing and referencing patents.

D. modern highway robbers who exploit loopholes in IP protection.

Patent treatment is standardized thanks to: A. the WTO. B. the UN Commission on Patents. C. domestic laws in various nations. D. the Paris Union. E. the ACTA.

D. the Paris Union.

Trade obstacles are considered to be legal forces because: A. they often are based on legislation. B. their compliance is costly to the firm and the consumer. C. they are imposed by a formal institution and noncompliance can carry punishment. D. two of the above. E. all of A, B, and C.

D. two of the above.

According to the text, as the level of a government's debt increases A. a higher proportion of resources is invested into productive uses. B. government investments will increase. C. infrastructural investment will grow. D. consumer confidence will rise. E. more resources are directed toward payment of interest.

E.

Marketers are interested in knowing the trend of women entering the workforce because this may A. result in larger family income. B. provide a smaller market for consumer durables. C. be responsible for a baby boom. D. increase the proportion of elderly in the population. E. reduce the rate of rural-to-urban shift.

E.

The arithmetic average of the current exchange rate and the exchange rates in the two preceding years, adjusted by the ratio of domestic inflation to the combined inflation rates of the euro zone, Japan, the United Kingdom, and the United States, is known as A. the Gini coefficient. B. the Markov-Linder formula. C. the Kolgorov coefficient. D. the Zurich formula. E. the Atlas conversion factor.

E.

When an international manager is considering where to do business, one of the first considerations is A. whether the country has a democratically elected government. B. the dominant religion in the country. C. the size of the country. D. whether the country has a manufacturing sector. E. the size of the economy.

E.

Trademarks can be: A. a color. B. a sound. C. a design. D. two of the above. E. all of A, B, and C.

E. all of A, B, and C.

The existence of the rule of law in a foreign market suggests that: A. lawyers will be necessary in any substantive business transaction. B. personal relationships will be less effective than in a country governed outside the rule-of-law system. C. none of A, B, D, or E. D. legal rulings will be the basis of any dispute resolution. E. foreign investors can assume that their interests will be protected.

E. foreign investors can assume that their interests will be protected.

Arbitration is often preferred because it is: A. easier to influence an arbiter than a judge. B. quicker and more private than the U.S. court system, although often more expensive. C. more discreet, although more costly than the court system. D. less bureaucratic than the court system of any country. E. none of the above.

E. none of the above.

Copyrights are protected under: A. The WIPO Copyright Treaty. B. the International Convention for the Protection of Industrial Property. C. The Berne Convention of 1886. D. the Treaty of Rome. E. two of the above.

E. two of the above

The FCPA includes: A. wording consistent with the United Kingdom Bribery Act to facilitate application globally. B. specific explicit rules with clear definitions of terms that U.S. companies must follow in their foreign operations. C. all accounting processes, including the accounting of transfer payments. D. foreign tax liabilities and other adjustments specific to business outside the home country. E. uncertainties that make its application problematic.

E. uncertainties that make its application problematic.

emerging market economies

Economies with per-capita incomes in the low to middle range that are in a transition toward developed status

Keenan worked in his companies international office in Indonesia for many years. During his time there, political unrest cause many US citizens, like Keenan, to have questions. What do you governments put in place to represent their citizens in situations like this?

Embassies

Keenan worked in his companies international office in Indonesia for many years. During his time there, political unrest caused many US citizens, like Keenan, to have questions. What do governments put in place to represent their citizens like this?

Embassies

Tariffs often are set to

Encourage local input

A corporation would implement a country risk assessment in order to

Estimate the risk to business employees property in

Some producers of goods use transshipping as a way to

Evade allocated quotas

The cost of cyber crime to the perpetrator is

Exceedingly high, so as to be a deterrent

Incoterms attempt to standardize shipping agreements, and include

FAS and CIF

Incoterms include

FAS and CIF.

A government nationalize a firm when it shifts the ownership from public to private

False

Fair competition is a strong rationale for trade barriers

False

Only in communist countries do governments own the factors of production

False

Piracy is a form of cybercrime

False

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

False

The British Prime Minister, David Cameron, let the privatization movement

False

Subsidies

Financial contributions, provided directly or indirectly by a government, which confer a benefit, including grants, preferential tax treatment, and government assumption of normal business expenses

A specific duty is

Fixed sum charge for a specific number of units of the product

A government protects its citizens when they are abroad in what way?

Government embassies can provide information and emergency assistance, monitor and where appropriate, make protests.

Nationalization

Government takeover and ownership of banks, and the redistribution of their wealth motivated by the belief that governemnt can manage a public good or necessity better than the private, profit-driven sector

This country engaged in many privatizations in the aftermath of the 2008-2009 financial crisis.

Greece

GNI per capita

Gross national income divided by the number of people in the population. -high income economies: GNI per capita of $12,056 or more -middle income economies: GNI per capita over $995 but less than $12,056, which can be further divided into upper-middle economies: GNI per capita of $3,896 up to $12,055 and lower-middle economies: GNI per capita over $996 up to $3,896 -low income economies: GNI per capita of $995 or less

A variable levy exists when a country

Guarantees that the market price of an import will be the same as that of domestically produce goods

One motivation for government privatization is to

Have the business run more efficiently

the world bank categorizes countries based on GNI per capita, using the following categories

High income economies, middle income economies, and low income economies

Agricultural trade restrictions are typically found

In most countries

A government that makes radical changes to existing policies is demonstrating

Instability

How has the United States responded to the activity of dumping

It became the first country to prohibit dumping into its own market in 1916

How has the United States responded to the activity of dumping?

It became the first country to prohibit dumping into its own market in 1916.

How does a variable levy affect domestic producers?

It prevents an imported good form being priced lower than the domestic good.

Government motivation for restricting trade includes

Not a desire for isolation

Do U.S. government assign specific amounts of sugar imports that can come from 40 nations. What type of quota does this represent?

Not absolute

Japan restricts the number of automobiles it's manufacturers can export to the United States each year. What is this an example of?

Not absolute quota

Timmerson Corp. was frustrated to learn that it would have to pay the same import duty on shipments worth $100 as it did for shipments costing $2000. What does that government have in place that creates this situation for Timmerson Corp.

Not an ad val

Governments provide stability by

Not fostering

The most common form of direct government participation in trade is

Not import duties

What is the role of the home country and risk assessment

Not it is used initially

How does a variable levy affect domestic producers?

Not it raises the cost

Agriculture trade restrictions are typically found

Not only in centralized

Social dumping occurs when exporting producers

Not take knowing

Social dumping occurs when an export and country

Not targets market

Unlike quotas, voluntary export restraints (VERs) are imposed by

Not the importing country

Country risk assessment is a measure of the

Not threat of nationalize

Tariffs on some products no longer serve their original purpose of protecting domestic producers but they are still levied by the government. What are these types of tariffs called

Nuisance

Countervailing duties are put in place to

Offset the effects of a subsidy

Government stability has to do with

Policies that are permanent or change gradually

Henson Electronic's Corp Decided to lower it's export price in order to force the domestic producers in the importing

Predatory dumping

Until just a few years ago, do United States levied a $.54 a gallon import duty on foreign produced ethanol. Which of the reasons for restricting trade does this represent?

Protect an infant industry

Tariff barriers maybe used to

Protect domestic industry from foreign, lower cost producers.

The primary reason tariffs are put in place is to

Raise the price of imports, to protect domestic good

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

Sell the firm to foreign investors

Dumping is defined as

Selling a product abroad for less than its production cost or cost in the home market

The national defense argument for trade restrictions suggests that

Some industries, even if they are not competitive, may need protection from imports

Peterson soft drink Corp. Imports flavors for use in its products. The company pays $.86 per pound on every shipment. which type of tariff does the company pay

Specific

The food and drug administration in the United States works to protect citizens from harmful products and companies must meet the regulation it sets. Which classification of non-quantitative nontariff barrier does this represent?

Standards

The national defense argument for trade restrictions has been used in the United States by the Trump administration for imposing tariffs on

Steel

An example of retaliatory trade restrictions is

The US response to the EU ban of hormone treated beef

Examples of expropriation without compensation involved the following governments

The United States confiscated Iranian property in the United States and Cuba

Atlas conversion factor

The arithmetic average of the current exchange rate and the exchange rates in the two preceding years, adjusted by the ratio of domestic inflation to the combined inflation rates of the euro zone, Japan, the United Kingdom, and the United States

Nationalization and privatization are implemented by

The government

In the Global Debate, voluntary American dolphin-safe tuna labeling is objected to on what grounds?

The labeling is seen as a nontariff barrier for unlabeled, imported tuna

Mercosur

The largest latin american trade agreement; includes Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, and Uruguay

Gross Domestic Product (GDP)

The sum total of the value of all the goods and services produced in a nation

Gross National Income (GNI)

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

How do you barriers to trade affect the citizens of a country

They cost consumers billions of dollars per year

The government of some countries may decide they want to extract more money from businesses. What measure might they take to achieve this?

They were nationalize businesses

The government of some countries may decide they want to extract more money from businesses. What measure might they take to achieve this?

They would nationalize businesses

Businesses that conduct country risk assessment do so

To protect their assets, including people and property.

Country risks are often political in include wars and coups.

True

Country risks are often political in nature and include wars and coups

True

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

True

Recently, many governments, including the US government have contracted out certain services to private companies

True

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

True

Unfair international competition for company can be minimized through that an action of national laws

True

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

True

When the US military contracts out security details in war zones, it engages in privatization

True

Japan has established trade barriers in the form of tariffs against

U.S. beef, citrus, and dairy products.

Foreign Corrupt Practices Act (FCPA)

U.S. law regulating behavior regarding the conduct of international business in the taking of bribes and other unethical actions.

The practice of terrorism contributes to

Unstable environment that is detrimental to business

Examples of orderly marketing arrangements are

Voluntary export restraints

Patent treatment is standardized owing to

WIPO, TRIPS, and the Paris Union.

One of the problems associated with "cheap foreign labor" argument for restricting trade is that

We just don't account for all production costs

Anticompetitive legislation can be seen from a foreigner's perspective as

a barrier to trade.

Civil law is based on

a collection of codes and tends to be bureaucratic.

Extraterritoriality

a country's attempt to apply its laws to nonresidents and foreigners, and to activities that take place beyond its borders -tax and employment, antitrust, environmental laws

intellectual property

a creative work or invention that is protectable by patents, trademarks, trade names, copyrights, and trade secrets -TRIPS and WIPO work to standardize system

Gini Index

a mathematical formula that measures the amount of economic inequality in a society -a measure of the degree to which family income within a country is distributed equally

Extraterritoriality is

a nation's attempt to enforce its law beyond its borders.

Running afoul of miscellaneous laws in a foreign country is

a serious error, so the local law should be known.

Trademarks can be

a shape, color, design, sound, phrase, abbreviation by which the product is designated.

when measuring the value produced in an economy, most international organizations prefer to use? a) GNI b) GDP c) GNP d) PPP

a) GNI

some countries impose both an ad valorem duty and a specific duty on a single import. what type of duty are these countries using? a) compound b) duplex c) secondary d) elite

a) compound

In U.S. accounting law, the Sarbanes-Oxley Act a) holds corporate officers personally responsible for their corporate filings b) seeks to establish barriers to foreign listings on the U.S. stock exchanges c) is a response to reduced corporate earnings due to corruption d) attempts to establish GAAP practices for foreign companies

a) holds corporate officers personally responsible for their corporate filings

currently, what percentage of the worlds total population is found in developing countries? a) more than 75% b) around 25% c) close to 5% d) under 50%

a) more than 75%

Government stability has to do with? a) policies that are permanent or change gradually b) democratic processes and free elections c) a commitment to military strength d) leadership that listens to citizens and responds to their needs

a) policies that are permanent or change gradually

U.S. responses to foreign tariffs are likely to? a) raise the cost of the imported goods for U.S. consumers b) force a reduction in tariffs c) create equity across markets, which is the goal d) establish the fundamental rule of power rather than principle

a) raise the cost of the imported goods for U.S. consumers

Because of the importance of economic information to the control and planning functions at headquarters, the collection of data and preparation of reports are usually the responsibility of? A) the home office. B) national agencies. C) economic consultants. D) the international affiliate.

a) the home office

japan restricts the number of automobiles its manufacturers can export to the united states each year. what is this an example of? a) voluntary export restraint b) ad valorem tariff c) absolute quota d) sanction

a) voluntary export restraint

In some countries, when an import of a product reaches the government-specified amount, then no further imports of that product are allowed for the year. What type of quota does this represent?

absolute

Japan restricts the number of automobiles its manufacturers can export to the United States each year. What is this an example of?

absolute quota

At Kaiser Manufacturing, the company pays import duties that are a stated percentage of the invoice value of the product. Which type of tariff does the company pay?

ad valorem

countervailing duties

additional import taxes levied on imports that have benefited from export subsidies

The U.S. government assigns specific amounts of sugar imports that can come from 40 nations. What type of quota does this represent?

allocated

ad valorem duty

an import duty levied as a percentage of the invoice value of imported goods

Timmerson Corp was frustrated to learn that it would have to pay the same import duty on shipments worth $100 as it did for shipments costing $2,000. What does the government have in place that creates this situation for Timmerson Corp?

an official price

The practice of terrorism contributes to

an unstable environment that is detrimental to business

The U.S. antitrust law contains both civil and criminal penalties

and the criminal penalties apply to foreign companies even if the conspiracy took place outside the U.S.

Intellectual property includes

anything that is the result of things created using someone's intellect.

The U.S. and the EU both

apply antitrust law extraterritorially

In the U.S. and EU, attitudes toward competition

are based on differing assumptions, with the U.S. following a per se concept and the EU concerned about the existence of harm.

U.S. antitrust law is applied

as widely as possible, whether or not the alleged corruption took place inside the U.S. and whether or not the business is American.

reduction in birthrates are occurring worldwide because? a) governments are scaling back family planning programs b) an increased level of urbanization c) women are experiencing a decline in status d) governments are encouraging higher levels of marriage and at earlier ages

b) an increased level of urbanization

if the united states and italy fell into a trade dispute, which form of international law would govern the situation? a) litigation b) public c) civil d) private

b) public

the primary reason tariffs are put in place is to? a) raise government revenue at the cost of importers b) raise the prices of imports to protect domestic goods c) punish countries over political issues d) encourage foreign consumption

b) raise the price of imports, to protect domestic goods

nationalization and privatization are implemented by? a) big business b) the government c) international affiliates d) consumers

b) the government

The most important sources of international law are

bilateral and multilateral treaties, along with customary law.

The main sources of international law are

bilateral and multilateral treaties, along with customary law.

The source of most international law is

bilateral and multilateral treaties, many initiated by the UN.

The FCPA has

brought the discussion of bribery into the open, which has, overall, been positive.

underground economy

buying and selling of goods and services that is concealed from the government to avoid taxes or regulations or because the goods and services are illegal

the most important sources of international law are? a) the UN International Court of Justice b) the US Supreme Court and the EU Court of Justice c) Bilateral and multilateral treaties, along with customary law d) civil and common law

c) bilateral and multilateral treaties, along with customary law

Smaller nations would like patent protection to be? a) extended, to allow for them to build their competative advantage b) extended, so they can recoup development costs c) reduced, so that they can make money sooner d) dissolved, so they can increase their profits

c) reduced, so that they can make money sooner

what is the purpose of economic analysis? a) to anticipate political developments within and across countries b) to forecast exchanges c) to assess overall outlook for the economy and the impact of economic changes on the firm d) to compare the rate of economic and political change in order to determine financial variances

c) to assess the overall outlook for the economy and the impact of economic changes on the firm

A company from a Sharia-based legal system

can follow that system internally and also has to follow the local law of the host country.

One area of U.S. tort cases of concern to international businesses is that they

can result in large monetary awards.

The three main approaches to law are

civil common religious

the three main approaches to law are?

civil, common, and religious law

The three main approaches to law are

civil, common, and religious.

Enforcing contracts that cross international borders is

complicated and governed in most nations by the CISG.

the trend for firms in regard to country risk assessment (CRA) is to

concentrate much more on CRA in making decisions about foreign activities

Social dumping occurs when an exporting country

creates unfair competition based on lower costs because the exporting country provides little social support system to the worker

one reason a government chooses to restrict trade would be to? a) eliminate domestic jobs b) foster relations with other nations c) indicate an isolationist stance d) protect domestic infant industries

d) protect domestic infant industries

when governments nationalize a firm they dont seek to? a) extract more money from the firm b) increase the firms profitability c) preserve jobs d) sell the firm to foreign investors

d) sell the firm to foreign investors

Customs procedures in many countries often

discriminate against imports and favor exports

age distrobution

distribution of age groups within populations varies widely, but developing countries generally have younger populations than do industrial countries due to higher birth rates

Jameson Electronics Corp. has $25,000 worth of holiday lights inventory that will soon become obsolete due to the seasonal nature of the product. The company decides to sell the inventory at a lower cost in its international market without changing pricing in its domestic market. What type of action is the company taking?

dumping

In the U.S. court system, tort claims may result in

exceedingly large awards.

A patent gives the inventor

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

Patents are government grants that give the owner

exclusive rights to use, sell, manufacture, or exploit the invention or process.

The EU applies its competition policy

extraterritorially.

The Smoot-Hawley Tariff Act was the result of lobbying efforts by which group?

farmers

The Alien Tort Statute allows foreigners to

file claims in U.S. courts for violations of international law that may have occurred beyond the U.S. borders.

a specific duty is a

fixed sum charged for a specified number of units of the product

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

foreign investors can assume that their interests will be protected

Treaties

formal agreements between nations also called: conventions, covenants, compacts or protocols

Patents

government grant giving the inventor of a product or process the exclusive right to manufacture, exploit, use, and sell that invention or process -country specific laws vary widely -patent trolls and pirates challenge the patent system

In U.S. accounting law, the Sarbanes-Oxley Act

holds corporate officers personally responsible for their corporate filings.

The U.S. Foreign Corrupt Practices Act

includes uncertainties such as terminology, definitions, accounting standards, and behavior standards.

Where litigation should occur in a dispute on an international transaction

is often a complex issue to untangle.

Tax law

is often applied globally

stability

issues with lack of Peace and Predictability stable maintains itself in power and whose fiscal, monetary, and political policies are predictable and not subject to sudden change instable cannot maintain itself in power or makes sudden, unpredictable, or radical policy changes

litigation

legal proceedings conducted to determine and enforce particular legal rights -can be complicated and expensive -discovery process used to find facts relevant to litigation -cross border litigation prompts question of which law should apply choice of law or choice of forum

Patent trolling is a process of

looking for loopholes in patent protection and exploiting them.

Government stability is a characteristic of a government that

maintains predictability in fiscal,monetary, and political policies

Unlike antitrust or competition proceedings in the EU, in the U.S. such proceedings

may involve civil and criminal penalties.

Patent trolls are

modern highway robbers who exploit loopholes in IP protection.

The Foreign Corrupt Practices Act has

moved the discussion of transparency and corruption out into the open

Strict liability requires

no proof of the manufacturer's negligence

non-tariff barriers

non tax methods of increasing the cost or reducing the volume of imported goods

If you are an international businessperson arrested and taken into custody in a foreign country, the best approach is to

notify your embassy, try to understand the issues, and contact local assistance, such as a lawyer.

Quantitative barriers

numerical limits for specific goods imported during a specific time

environmental dumping

occurs when an exporter can sell at lower costs due to the country's lax environmental standards

Where litigation in international disputes should occur is

often complex, so contracts should include choice of law and choice of forum clauses.

Arbitration is a private solution that is

often preferred by foreign litigants because it is perceived as fairer, faster, cheaper, and more confidential than are the courts.

Arbitration is

often preferred by foreign litigants in the U.S., for speed and privacy

Punitive damages are found

only in the U.S.

Trade obstacles can take the form of

political, financial, or legal regulations

Henson Electronics Corp. decided to lower its export price in order to force the domestic producers in the importing nations out of business. Once these competitors are gone. Henson Electronics plan to raise its prices. What is this an example of?

predatory dumping

Incoterms (International Commercial Terms)

predefined commercial terms established by the international chamber of commerce -FAS (Free alongside ship-port of call) -CIF (cost, insurance, freight-foreign port) -CFR (cost and freight-foreign port)

Antitrust law is intended to

prevent large concentrations of economic power, such as monopolies.

The Foreign Corrupt Practices Act (FCPA) is U.S. legislation that

prohibits bribery by American companies abroad.

One reason a government chooses to restrict trade would be to

protect domestic infant industries

Governments provide stability by

protecting business from unfair competition and from attacks and theft

kidnapping

provide source of operating funds for terrorists

Arbitration is often preferred when the contract stipulates U.S. law and one of the litigants is foreign because it is

quicker, cheaper, and more private than the U.S. court system.

The primary reason tariffs are put in place is to

raise the price of imports, to protect domestic goods

The intent of the Foreign Corrupt Practices Act is to

reduce corruption and thereby make the costs of doing business transparent.

Smaller nations would like patent protection

reduced, so that they can enter the game earlier, possibly with generics.

trademarks

shape, color, design, phrase, abbreviation, or sound used by merchants or manufacturers to designate and differentiate their products -vary from country to country

In Sharia law, interest is forbidden

so equity partnerships, where business risk is shared, tend to be the approach to developing working capital.

The ISO and the IEC both promote

standardization in technology-related fields through specifications.

The Food and Drug Administration in the United States works to protect citizens from harmful products and companies must meet the regulations it sets. Which classification of nonquantitative nontariff barrier does this represent?

standards

Tariffs

taxes on imported goods for the purpose of raising their price to reduce competition for local producers or stimulate local production

Trade names are protected under

the International Convention for the Protection of Industrial Property

Punitive damages in product liability cases can be awarded in

the U.S.

Democratic nations that follow free-trade capitalism sometimes nationalize businesses, such as

the U.S. bailout during the 2009 financial crisis, when the U.S. government took control of several large U.S. corporations

One difference between the U.S. and EU approach to antitrust law is that

the U.S. follows the per se concept, wherein actions are illegal whether they have done harm

Antitrust laws differ among countries, and complying with them is often difficult for the firm, so

the U.S. government is pushing for a world organization to clear antitrust issues.

Economic Growth Rate

the annual percentage change of real GDP, rapid and rising rate imply consumer demand

The legal system of a country is

the collection of governing principles, legislation, and regulations enacted to provide for the welfare of the country.

copyrights

the exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and dispose of their work as they see fit -protects tangible property

In Japan, product liability requires that

the plaintiff prove design or manufacture negligence.

Privitization

the selling of government owned property to the private sector to gain more efficiency in business operations, to raise money or to change in political climate/philosophy

Anyone studying legal forces affecting international business soon realizes

the variety of these forces complicates the task of understanding the laws.

Many U.S. laws affect activities of international firms, and

there is no coordination or consolidation of them.

Miscellaneous foreign laws can cause difficulties for the uninformed businessperson because

these laws may not be obvious or in accord with laws at home

Trade obstacles are considered to be legal forces because a) customs is controlled by a country's national police or army b) their compliance is costly to the firm and consumer c) they are protected by the courts d) they are often based on litigation

they are often based on litigation

some nontariff barrier are difficult to discourage because

they consist of government subsidies and standards

Legal uncertainties have affected international business (IB)—

they have not, though, slowed down the growth of IB; instead, they have made conducting IB more complex.

Trade obstacles are considered to be legal forces because

they often are based on legislation, and noncompliance can carry punishment.

If two English multinational companies had a dispute arising in New York City, and there were no choice of law or choice of forum clauses in their contract, it is likely that

they would bring their dispute to an English court.

The concept of strict liability, as found in the U.S. legal system, applies

to harm done by the designer/manufacturer without the need to prove negligence.

If an international manager runs afoul of a miscellaneous law while working abroad, calling the embassy

to let them know of the situation may be a good idea, but usually the embassy cannot help much.

With patents, there is standardization

to some degree, through the EPO within the EU.

unit labor cost

total direct labor costs divided by units produced -low or slowly rising labor unit costs may indicate opportunity to lower production costs and may indicate locations of new competition in world markets -change in wage rates may cause companies to change their international source of supply

FCPA includes

uncertainties that make its application problematic

social dumping

unfair competition from lower labor costs and poor working conditions

In Japan, anti-trust legislation

was introduced by the U.S. and did not harmonize well with Japanese values.

Usually, to assume that foreign law

will differ from U.S. law and must be understood is a reasonable approach.

Standardization of law

would make IB work more smoothly because uniform, predictable laws would result.