International Business - Chapter 2
What two factors would make a country more desirable to do business with?
- market-based economy - democratic political institutions
Select the accurate description of a common law system.
A common law system has a degree of flexibility that other legal systems lack.
______ refers to a political system that values the needs of society over that of an individual.
Collectivism
______ law is the body of law that governs oral and written agreements associated with the exchange of goods, services, money and property.
Contract
______ refers to a political system in which the citizens exercise power directly or elect representatives to form a governing body.
Democracy
True or False: Unlike the economic system of a country, the legal system is NOT influenced by the prevailing political system.
False
______ property refers to property that is the product of any innovative activity, such as a screenplay, a music score, or the chemical formula for a new drug.
Intellectual
Which statement BEST describes a totalitarian system?
It is a form of government in which the state recognizes no limits to its authority and strives to regulate all aspects of public and private life.
______ rights determine how a resource or economic good is owned and used.
Property
What is the objective of a pure command economy?
allotment of resources for the overall good of society
A country that bases its laws on the traditions within the country's legal history operates under a _____ law legal system.
common
A(n) ______ is a document that specifies the conditions under which an exchange is to occur, detailing the rights and obligations of the involved parties.
contract
Political systems that emphasize individualism tend to promote _____.
democracy
Jenner is obtaining a patent for the new diet drink formulation he created. He hopes that Coca Cola and other companies will be interested in licensing his formula. Jenner is protecting his _____ property with the patent.
intellectual
The ______ system of a country refers to the rules, or laws that regulate behavior along with the system that enforces them.
legal
The political economy of a country refers to the interaction of the political, economic, and _____ systems of a country.
legal
Product ______ is the area of law that that holds a firm and its officers responsible for injuries caused by their product.
liability
In a pure ______ economy, all productive activities are owned privately -- not by the state.
market
Companies wishing to pursue business opportunities in Sweden would find that while some industries are privately owned, others are state-controlled. What type of economy does this represent?
mixed
In a ______ economy, both private enterprise and state ownership co-exist.
mixed
The system of government in a nation is called the ______ system.
political
The term ______ refers to the interconnection of the political, economic, and legal systems of a country.
political economy
What are the two ways property rights can be violated?
private action public action
Several years ago, a customer brought a lawsuit against McDonald's because the coffee she purchased at the drive-thru window was hot when she spilled it on herself in her car. This lawsuit was based on _____.
product liability
Collectivism refers to a political system that
restricts an individual's right to do something on the grounds that it runs counter to the "good of society".
The production of goods in a pure market economy are determined by
supply and demand
Even though there are many state-owned businesses in China, many Western businesses feel that should still invest in the country because
the nation is moving toward a market-based system.
In a command economy, businesses are owned by _____.
the state
