International Business Chapter 2

The central message of collectivism is that individual economic and political freedoms are the ground rules on which a society should be based.

False

The communists believed that socialism could be achieved by democratic means and turned their backs on violent revolution and dictatorship.

False

The parties to an agreement normally resort to contract law when one party feels the other has violated either the letter or the spirit of an agreement.

True

When Penelope returned home from vacation, she found her store had been robbed and her most valuable merchandise was gone. This violation of property rights is considered private action.

True

Which of the following areas of international trade is regulated by the Foreign Corrupt Practices Act?

preventing bribery and unethical acts in the conduct of international business

The research and development division of a company has recently designed a new coffee vending machine that is likely to sell very well in the market. It is compact, user-friendly, and provides unprecedented efficiency in terms of cost per cup. Consequently, the company fears that its competitors would soon mimic the design of its product. To protect its product, the company is now seeking a

patent.

The local grocery in a small southern city is the only option for the residents, so it has a monopoly on the grocery business there. When the population of the city grows and demand for groceries increases, what is the grocery store most likely to do?

Restrict output and let prices rise.

Which of the following statements about the Trade-Related Aspects of Intellectual Property Rights (or TRIPS) agreement is true?

It obliged WTO members to grant and enforce patents lasting at least 20 years and copyrights lasting 50 years.

Modern socialists trace their intellectual roots to _____, although socialist thought clearly predates this individual.

Karl Marx

A nation's legal system is usually of very little interest to international business managers.

False

Contracts under a civil law system tend to be very detailed with all contingencies spelled out.

False

The Trade-Related Aspects of Intellectual Property Rights agreement attempts to reduce intellectual property protections to enhance trade.

False

Which of the following statements about the legal systems of countries is true?

They can affect the attractiveness of a country as an investment site or market.

A theocratic law system is one in which the law is based on religious teachings.

True

Which of the following is a safeguard that representative democracies use to ensure that their elected officials are held responsible for their actions?

an individual's right to freedom of expression, opinion, and organization

A law system that is based on a detailed set of laws organized into codes is

civil

When _____ is emphasized, an individual's right to do something may be restricted on the grounds that it runs counter to "the good of society."

collectivism

Under the _____, cases are judged with reference to three characteristics: tradition, precedent, and custom.

common law system

One key component of a country's legal system is

defining the rights and obligations of those involved in business transactions.

Plato _____; he believed that society should be stratified into classes, with those best suited to rule administering society for the benefit of all.

did not equate collectivism with equality

Which of the following is a feature of a democracy?

governance by people or elected representatives

In a(n) _____ society, the welfare of society is best served by letting people pursue their own economic self-interest.

individualist

In 2008, the U.S. government took an 80 percent stake in AIG to stop that financial institution from collapsing, the theory being that if AIG did collapse, it would have very serious consequences for the entire financial system. What type of economy is this an example of?

mixed

In Russia, in the chaotic period following the collapse of communism, an outdated legal system, coupled with a weak police force and judicial system, allowed the Russian Mafia to demand "protection money" from business owners. Any business owner who rebelled had to face violent retribution. This violation of property rights exemplifies

private action.

What term is used to describe a state in which authoritarian elements have captured some or much of the machinery of state and use this in an attempt to deny basic political and civil liberties?

pseudo-democracies