Chapter 6 Global Business
15. Which of the following laws provides for (after a certain deductible) U.S. government insurance coverage for the risk of a U.S. business or property being attacked by a "foreign person or foreign interest?" a. Foreign Corrupt Practices Act b. Overseas Private Investment Act c. Terrorism Risk Insurance Act d. Antitrust Act e. United We Stand Act
C
3. Most, if not all, democracies today are what are known as _____ democracies. a. athenian b. totalitarianism c. representative d. egalitarian e. communism
C
3. Singapore historically has had a highly anti-business political system in a parliamentary model context, with one ruling party, in power since 1959.
F
4. Under Communist economic ideology, collectivistic rights give way in the extreme to individual rights.
F
6. China, with its strong individualistic, entrepreneurial, free-market spirit, historically has been viewed as the leading economically capitalistic economy in the world.
F
8. Fortunately for global businesses, economic risks are independent of political risks.
F
9. A country's potential nationalization of companies in the oil industry would represent a macropolitical risk.
F
1. _____ is Greek for "rule by the people"; it is a form of government in which all citizens have the right to vote. a. Democracy b. Totalitarianism c. Dictator d. Egalitarianism e. Communism
A
12. _____ risks are the risks that political forces or problems in a given country will have a meaningful negative impact upon the conduct of business in that country. a. Political b. Environmental c. Individual d. Economic e. Financial
A
17. A situation where businesses are able to illegally alter relevant private and/or public decision making by way of bribes, kickbacks, blackmail, extortion, and related activities is known as _____. a. corruption b. an ethical violation c. dishonesty d. treachery e. deceitfulness
A
23. According to the text regarding a study of corporate bribery in developed countries conducted by Transparency International, _____ had the most corporate bribery. a. Russia b. Belgium c. Canada d. Brazil e. Taiwan
A
24. The practice of making illegal payments to government officials or engaging in blackmail, extortion, or other related activities to obtain government contracts or governmental approval for business activities is called _____ corruption. a. public b. private c. open d. closed e. external
A
25. The _____ is a U.S. law that prohibits U.S. companies from bribing or otherwise corrupting foreign government officials to win foreign government contracts or obtain other foreign government assistance for their businesses. a. Foreign Corrupt Practices Act b. Overseas Private Investment Act c. Terrorism Risk Insurance Act d. Antitrust Act e. United We Stand Act
A
26. A legal system based on a comprehensive listing of legal rules in sets of written codes of law is known as a _____ law legal system. a. civil b. common c. theocratic d. representative e. family
A
28. Of the following statements about common law legal systems, which is NOT true? a. They originated in Asia in 1250. b. A key advantage of this approach is that judges have a fair amount of flexibility to change their interpretations of the law based on changing societal developments. c. One downside of the common law approach is that it gives much power to the courts and judges. d. It is a legal system where legislative bodies generally enact specific legal rules giving judges or courts considerable authority in interpreting these rules based on precedent and other factors. e. Some say that in common law countries it is often appointed judges who "make the law" rather than elected legislators.
A
5. Of the following statements, which is NOT true about totalitarian governments? a. Finland, South Korea, and Norway are run by a military dictatorship. b. Iran has a totalitarian government where religious "Ayatollahs" hold principal sway. c. A totalitarian variant is the absolute monarchy. d. King Henry VIII who ruled England was an absolute monarch. e. The dictatorships that prevailed in Eastern Europe during the Cold War are an example of military dictatorships.
A
6. Which of the following is NOT true about family planning in China? a. Beginning in 1850, the communist government of China formally adopted a "one child" family planning policy. b. The goal of the program has been to help alleviate China's overpopulation problem. c. The program has resulted in "gendercide." d. Young Chinese men are finding it very difficult to get married. e. Observers have attributed about 50 percent of the increase in China's saving rate over the past 25 years due to its one child policy.
A
16. Which of the following is a U.S. government agency that sells political risk insurance to U.S. businesses operating in countries with which the U.S. has a bilateral investment treaty? a. Foreign Corrupt Corporation b. Overseas Private Investment Corporation c. Terrorism Risk Corporation d. Antitrust Corporation e. United Corporation
B
18. _____ corruption is business corruption involving other private businesses, individuals, or groups. a. Public b. Private c. Open d. Closed e. External
B
2. _____ government is a system of government in which individuals govern without the support or consent of the citizenry. a. Athenian b. Totalitarianism c. Representative d. Egalitarian e. Communism
B
20. Paying "protection money" or giving sales kickbacks to an organized crime group would represent at example of _____ corruption. a. public b. private c. open d. closed e. external
B
21. A supplier paying a bribe to an officer of a company that purchases its products to help "facilitate" the purchase of said products is an example of _____ corruption. a. public b. private c. open d. closed e. external
B
22. A 2010 survey asked individuals whether they or someone in their household had paid a bribe in the past 12 months. The survey found a _____ percent bribery rate in the United States. a. 1 b. 5 c. 13 d. 22 e. 33
B
27. A legal system where legislative bodies generally enact specific legal rules giving judges or courts considerable authority in interpreting these rules based on precedent and other factors is called a _____ law legal system. a. civil b. common c. theocratic d. representative e. family
B
4. Of the following statements, which is NOT true about democracies? a. Democracy is Greek for "rule by the people." b. Most, if not all, democracies today are what are known as athenian democracies. c. Some democracies, such as Japan, Spain, and Great Britain, also have ceremonial monarchs d. Opposite democracies are totalitarian countries. e. Athenian democracy was developed around 500 BCE.
B
9. Which of the following is NOT true about socialism? a. Socialism involves an economic ideology in which the government or state plays a strong role in the economy and may own stakes in certain businesses. b. Countries with socialist economies aspire to be "classless." c. Socialistic economies tend to be somewhat more collectively than individualistically oriented. d. Many European countries have strong socialistic orientations. e. Socialistic countries put a high degree of importance upon worker and labor rights.
B
30. A party wishing to sell a given piece of commercial real estate to another party would enter into a real estate agreement with the other party. This is an example of which type of law? a. Tax b. Common c. Contract d. Theocratic e. Criminal
C
32. "Coca-Cola," the Nike "swoosh" logo, and McDonald's "golden arches" are examples of _____. a. intellectual property b. patents c. trademarks d. generalized trademarks e. contracts
C
11. A country that has particularly militant labor unions known for frequent unplanned or wildcat strikes, or perhaps a country known for holding corporate executives hostage until their demands are met, are examples of _____ risk. a. political b. environmental c. individual d. economic e. financial
D
14. The potential overthrow of a democratically elected presidential regime by a military junta is likely a(n) _____ risk. a. marketing b. environmental c. individual d. macropolitical e. micropolitical
D
33. The words "aspirin," "escalator," and "zipper" are examples of _____. a. intellectual property b. patents c. trademarks d. generalized trademarks e. contracts
D
8. _____ refers to an economic system where businesses are privately owned with a strong individualistic profit orientation. a. Totalitarianism b. Democracy c. Communism d. Capitalism e. Socialism
D
10. Which of the following is NOT true about capitalism? a. Capitalism refers to an economic system where businesses are privately owned with a strong individualistic profit orientation. b. Very little role for government exists in a purely capitalistic or "free market" economic system. c. Individual gains and losses of wealth can be very large. d. Individual incentives are at the core of capitalistic economic ideology. e. Historically, Russia has been viewed as the leading economically capitalistic economy in the world.
E
13. A country's potential nationalization of companies in the oil industry would represent a(n) _____ risk. a. marketing b. environmental c. individual d. macropolitical e. micropolitical
E
19. _____ involves unlawful arts or violence threatening the physical safety of others. a. Persecuting b. Oppressing c. Intimidating d. Bullying e. Terrorism
E
29. _____ establishes which violations of a nation's laws are crimes punishable by possible incarceration. a. Democratic b. Common c. Theocratic d. Representative e. Criminal
E
31. Laws to promote "fair competition" among businesses are known as _____ laws. a. tax b. common c. contract d. theocratic e. antitrust
E
7. _____ involves an economic ideology in which the government or state plays a strong role in the economy and may own stakes in certain businesses. a. Totalitarianism b. Democracy c. Communism d. Capitalism e. Socialism
E
1. Totalitarian government refers to a form of government in which total (all) citizenry have the right to vote.
F
13. Tax law is the body of law governing legally enforceable agreements between parties to engage in economic exchange.
F
10. Rankings of countries throughout the world by potential political risks typically place Scandinavian and European countries such as Norway, Sweden, Switzerland, Luxembourg and Denmark near the top of the list, meaning that companies engaging in business in these countries face the least number of potential political risks.
T
11. There are essentially two kinds of business corruption: private corruption and public corruption.
T
12. In the world today, Islamic law, as followed in countries such as Iran and Saudi Arabia, is the primary example of theocratic law in operation.
T
14. Patent rights generally remain enforcable for 5-20 years, depending on the invention and the country.
T
2. The openness of democratic countries like Finland, and the protections such countries tend to generally provide for property rights and freedom of expression, usually make those countries more hospitable places to conduct global business than countries with totalitarian or semi-totalitarian political regimes.
T
5. Very little role for government exists in a purely capitalistic or "free market" economic system.
T
7. Currency devaluation and conversion restrictions are two of the many economic risks companies take when engaging in international business.
T