IBA 350 Exam 2
________ refers to the possibility of loss or adverse effects on company operations and
profitability as a result of changes in acountry's politicaland/or legal environment. -
ANS-Country risk
An American company that does business overseas has to be concerned about local
events. Why should a company be concerned about political events and the legal
environment in the country in which it doesbusiness? - ANS-Changes in the political
climate might influence government interference in businesspractices, putting the
safety of thecompany's employees in jeopardy.
Which of the following best describes a politicalsystem? - ANS-It ensures stability
based on laws.
Which of the following statements best describessocialism? - ANS-Collective welfare
outweighs individual welfare.
China has added democratic approaches such as land reforms and open markets to
increase commercial activity. This example shows that________. - ANS-some
totalitarian regimes are evolving towards democracy and capitalism
Which of the following best characterizes ademocracy? - ANS-Private property rights
Which type of economic system is associated withtotalitarianism? - ANS-Command
economy
Which of the following describes a legal system with clear rules that are publicly
disclosed, enforcedfairly, and respected byindividuals, organizations, and the
government? - ANS-Rule of law
Which of the following does NOT describe Islamiclaw, also known as sharialaw? -
ANS-The origins of Islamic law date back to Roman law and the Napoleonic Code.
What is the basis of commonlaw? - ANS-Tradition, previouscases, and legal
precedents
What is the basis of civillaw? - ANS-Codified rules
, Which of the following participants is LEAST likely to transform anation's political and
legalsystem? - ANS-Private MNEs such as Unilever and Coca Cola
Asterix, a French themepark, spoke out against the Frenchgovernment's support for
the creation of Disneyland Paris because Disney is an American company. This
example shows that________. - ANS-rival domestic firms complain to their government
when foreign firms receive governmental support
Which of the following is a regional tradeorganization? - ANS-European Union(EU)
It has recently been found that special interest groups(SIGs) have unprecedented
access to politicians through social events. Why should companies be concerned with
theSIGs' access to governmentofficials? - ANS-SIGs influence elected officials who
can change policy.
What kind of government seizure compensatesforeign-owned businesses? -
ANS-Expropriation
huge MNE was the victim of creeping expropriation from a foreign government. Why is
creeping expropriation ethicallywrong? - ANS-It occurs after an MNE makes large
investments in acountry's property and facilities.
The United States has implemented trade sanctions on Iran and Syria. What is the
purpose ofsanctions? - ANS-Sanctions punish unwanted activities by foreign countries.
Activists organizeda(n) ________ of petroleum company BP following the oil spill in the
Gulf of Mexico. - ANS-boycott
An agricultural firm is considering doing business in a foreign country with
environmentallaws, foreign investmentlaws, e-commercelaws, an underdeveloped
legalsystem, and a socialistic government. Which of the following would most prevent
the company from maximizing itsprofits? - ANS-Environmental law would cause the
greatest hindrance because firms pay for pollution
Which of the following characterizesextraterritoriality? - ANS-Applyinghome-country
laws to persons outside national borders
Which of the following describes the Foreign Corrupt Practices Act(FCPA)? -
ANS-Firms are prohibited from offering bribes to foreign firms to obtain business.
________ refers to the possibility of loss or adverse effects on company operations and
profitability as a result of changes in acountry's politicaland/or legal environment. -
ANS-Country risk
An American company that does business overseas has to be concerned about local
events. Why should a company be concerned about political events and the legal
environment in the country in which it doesbusiness? - ANS-Changes in the political
climate might influence government interference in businesspractices, putting the
safety of thecompany's employees in jeopardy.
Which of the following best describes a politicalsystem? - ANS-It ensures stability
based on laws.
Which of the following statements best describessocialism? - ANS-Collective welfare
outweighs individual welfare.
China has added democratic approaches such as land reforms and open markets to
increase commercial activity. This example shows that________. - ANS-some
totalitarian regimes are evolving towards democracy and capitalism
Which of the following best characterizes ademocracy? - ANS-Private property rights
Which type of economic system is associated withtotalitarianism? - ANS-Command
economy
Which of the following describes a legal system with clear rules that are publicly
disclosed, enforcedfairly, and respected byindividuals, organizations, and the
government? - ANS-Rule of law
Which of the following does NOT describe Islamiclaw, also known as sharialaw? -
ANS-The origins of Islamic law date back to Roman law and the Napoleonic Code.
What is the basis of commonlaw? - ANS-Tradition, previouscases, and legal
precedents
What is the basis of civillaw? - ANS-Codified rules
, Which of the following participants is LEAST likely to transform anation's political and
legalsystem? - ANS-Private MNEs such as Unilever and Coca Cola
Asterix, a French themepark, spoke out against the Frenchgovernment's support for
the creation of Disneyland Paris because Disney is an American company. This
example shows that________. - ANS-rival domestic firms complain to their government
when foreign firms receive governmental support
Which of the following is a regional tradeorganization? - ANS-European Union(EU)
It has recently been found that special interest groups(SIGs) have unprecedented
access to politicians through social events. Why should companies be concerned with
theSIGs' access to governmentofficials? - ANS-SIGs influence elected officials who
can change policy.
What kind of government seizure compensatesforeign-owned businesses? -
ANS-Expropriation
huge MNE was the victim of creeping expropriation from a foreign government. Why is
creeping expropriation ethicallywrong? - ANS-It occurs after an MNE makes large
investments in acountry's property and facilities.
The United States has implemented trade sanctions on Iran and Syria. What is the
purpose ofsanctions? - ANS-Sanctions punish unwanted activities by foreign countries.
Activists organizeda(n) ________ of petroleum company BP following the oil spill in the
Gulf of Mexico. - ANS-boycott
An agricultural firm is considering doing business in a foreign country with
environmentallaws, foreign investmentlaws, e-commercelaws, an underdeveloped
legalsystem, and a socialistic government. Which of the following would most prevent
the company from maximizing itsprofits? - ANS-Environmental law would cause the
greatest hindrance because firms pay for pollution
Which of the following characterizesextraterritoriality? - ANS-Applyinghome-country
laws to persons outside national borders
Which of the following describes the Foreign Corrupt Practices Act(FCPA)? -
ANS-Firms are prohibited from offering bribes to foreign firms to obtain business.
