INT CH5

Laws that prohibit below-cost sales of products are known as _____ laws.

antidumping

When the United Nations (UN) votes on economic sanctions for a country:

any permanent member of the Security Council can veto the sanctions.

When firms refuse to do business with someone, often for political reasons, this is known as _____.

boycotting

Many adverse governmental actions are a result of a host country's opposition to _____.

colonial remnants

Code law differs from common law in that code law:

is based on a comprehensive set of written statements.

Which of the following is NOT a method of controlling imports?

Confiscation

_____ results in a transfer of ownership from the foreign firm to the host country without providing compensation for the firm.

Confiscation

Political and legal factors often play critical roles in international marketing activities.

TRUE

Political risk can be the result of government action, but it can also be outside the control of government.

TRUE

Trade sanctions and embargoes can be used interchangeably.

TRUE

Voluntary restraint agreements are self-imposed restrictions aimed at avoiding punitive trade actions from the host.

TRUE

Which act passed in 1977 made it a crime for U.S. firms to bribe foreign officials for business purposes?

The Foreign Corrupt Practices Act

The charter of the United Nations allows for sanctions as an enforcement action by regional agencies. Which of the following is NOT an example of a regional agency?

The Organization of American Unity

Which 2002 law protects investors by improving the accuracy and reliability of corporate disclosures, and also covers issues like corporate responsibility, financial transparency, and accounting oversight?

The Sarbanes-Oxley Act

Which of the following is true about export controls?

The U.S. export control system is based on the Export Administration Act.

In the United States, the _____ excludes from antitrust prosecution those firms that are cooperating to develop foreign markets.

Webb-Pomerene Act

Nuclear nonproliferation is a determinant for export control.

TRUE

One key concern with trade sanctions is the fact that governments often consider them as being free of cost.

TRUE

Which of the following is true about the legal procedures preferred by businesses?

Arbitration results in much quicker decisions, and hence is more preferred by businesses.

Which of the following is NOT considered a political risk?

Deflation

Which of the following is a characteristic of a market-based corporate governance regime?

Dispersed ownership

_____ occurs when a government demands partial transfer of ownership and management responsibility and imposes regulations to ensure that a large share of the product is locally produced and a larger share of the profit is retained in the country.

Domestication

_____ are designed to deny or at least delay the acquisition of strategically important goods by adversaries.

Export control systems

Boycotts place a tax on imports and raise prices.

FALSE

Bribing foreign officials in order to gain contracts is considered permissible in the United States.

FALSE

Code law is based on tradition and depends less on written statutes than on precedent and custom.

FALSE

Countries with the common law system have much more rigid laws than those with the code law system.

FALSE

Economic sanctions that are imposed unilaterally by one country tend to be more effective than those imposed multilaterally by countries.

FALSE

Expropriation is a term used to describe the U.S. government's investment in foreign technology with the intent to spur development of trade partners.

FALSE

In making decisions about a firm's international marketing activities, managers will need to concentrate on the legal circumstances of the host country but not the home country.

FALSE

Permitting a foreign national from a controlled country to have access to a highly sensitive computer program in the United States is not considered as an export.

FALSE

The term "embargo" refers to products that are packaged in one country in a particular way, and then altered to fit the international marketplace in another country.

FALSE

Today's export controls use a "strategic balance" approach affecting specific hotspots rather than the "tactical balance" approach.

FALSE

Which of the following refers to a legal entitlement of exclusive rights to use an idea, piece of knowledge, or invention?

Intellectual property

Which of the following best describes "ehrbarer Kaufmann"?

It focuses on maintaining long-term successful international trade efforts with distant and often unfamiliar people.

Which of the following is true about expropriation?

It immediately transfers a certain amount of wealth and resources from foreign companies to the host country.

Which of the following is true about common law?

It is based on tradition and depends on precedent and custom.

Which of the following is true about domestication?

It results in inefficiencies due to lack of market discipline, and thus affects the international competitiveness of operations abroad.

Which of the following is an example of a dual-use item?

Life jackets

Which of the following statements about legal differences and restraints is true?

Many common law countries have adopted commercial codes to govern the conduct of business.

Which of the following is true about import controls?

Nontariff barriers like voluntary restraint agreements are self-imposed restrictions and cutbacks aimed at avoiding punitive trade actions from the host.

As firms become increasingly multinational, governments respond by increasing global cooperation to achieve the same principles of taxation and corporate ethics laws across nations.

TRUE

Corporate governance frameworks ensure the board of directors' accountability to the company and its shareholders.

TRUE

If supply chains are complex and multinational, the effects of terrorism can potentially spread across the globe from an initially local focus.

TRUE

Lobbyists are well-connected individuals and firms that can provide access to policymakers and legislators.

TRUE

_____ refer to governmental actions that distort the free flow of trade in goods, services, or ideas for decidedly adversarial and political, rather than strictly economic, purposes.

Trade sanctions and embargoes

Events caused by factors outside the control of government include all of the following EXCEPT:

confiscation.

The relationships among stakeholders that determine and control the strategic direction and performance of an organization are called _____.

corporate governance

Confiscation differs from domestication in that confiscation:

does not provide compensation to the foreign firm.

As required by government mandate, anyone wishing to export a product from the United States needs a(n) _____.

export license

The seizure of foreign assets by a government with payment of compensation to owners is known as _____.

expropriation

The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS):

gives developing countries more time to implement changes related to intellectual property.

State ownership of enterprise, lack of transparency, and no minority influence are characteristics of a _____ corporate governance regime.

government affiliated

When products and goods enter a market in ways not desired by their manufacturers, this is known as _____ market activities.

gray

The phenomenon when buyers become uncertain about the state of their nation's economy, leading to a sharp reduction in demand for both consumer and industrial goods is known as _____.

the chill effect