Deck 5: The Political and Legal Environment

Question 1

Understanding the political and legal environment is easy because of the resolution titled The Uniform International Political and Legal Standards Act of 1999.

Answer 1

False

Question 2

When economic sanctions are imposed unilaterally by one country, they tend to be more effective than when imposed multilaterally by all countries.

Answer 2

False

Question 3

Boycotts are attempts by the government to control technology transfer.

Answer 3

False

Question 4

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.

Question 5

To succeed in a market, the international marketer needs much more than business know-how.

Question 6

Tariffs, voluntary restraint agreements, and quota systems are used to help capture terrorists at airports.

Question 7

Trade sanctions and embargoes can be used inter-changeably.

Question 8

The 9/11 terrorists attacks in the United States will lead to more sophisticated export controls.

Question 9

Marketing managers are interested in four main areas of political and legal circumstances. These areas are within the home country, within the host country, bilateral agreements, and agreements a country makes with itself.

Question 10

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

Question 11

Typically, the intent of trade sanctions is to bring commercial interchange to a complete halt.

Question 12

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

Question 13

Sanctions can be viewed as a middle ground between going to war and doing nothing.

Question 14

Bribes are an accepted way of operation in many foreign countries, and U.S. companies must learn these corporate culture rituals and participate in them in order to successfully compete.

Question 15

When the United Nations approves trade sanctions for a particular country, all countries must abide by this decision, and, usually, this process works flawlessly.

Question 16

One of the problems with detecting the transfer of cutting-edge technology that may be considered a threat to world security is that technology has become so miniaturized that it is easy to hide and hard to detect.

Question 17

Laws in the United States control all exports of goods, services, and ideas.

Question 18

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

Question 19

Theocracy is a form of government in which the theory of economic warfare takes precedence over nationalism.

Question 20

Even though firms that are expropriated may deplore the low levels of payment obtained, they frequently accept them in the absence of better alternatives.

Question 21

As required by government mandate, anyone wishing to export a product from the United States needs:

A) investment capital.
B) a board of directors.
C) a marketing plan.
D) an export license.

Question 22

The method in which countries try to deny or at least delay the acquisition of strategically important goods by adversaries is known as:

A) postulating.
B) export control systems.
C) production bondage.
D) pre-sanction warning.

Question 23

State-of-the-art technology has allowed high-technology items to be easily concealed because of:

A) miniaturization.
B) their low cost.
C) translation across international boundaries.
D) technology transfer.

Question 24

Intellectual property rights give:

A) individuals the right to free speech.
B) companies and inventors patents and trademarks on products they invented.
C) citizens the right to peaceful protests.
D) individuals and companies the right to own and sell property as they see fit.

Question 25

One technique governments use to put restraints on international marketers is to

A) use import controls.
B) block U.S. television programs from their nationwide TV systems.
C) require that all products be paid for with homeland currency.
D) require United Nations approval.

Question 26

When chemical firms are required to make payments on their production volume, is known as:

A) Environmental superfund
B) Environmental sanction
C) Environmental embargo.
D) Environmental rights.

Question 27

Government actions that distort the free flow of trade in goods, services, and ideas are:

A) punitive and exemplary.
B) controlled and erratic.
C) trade sanctions and embargoes.
D) unionized and secular.

Question 28

Goods that one country exports to another country and that have both military and civilian uses are called:

A) war implements.
B) strategic alliances.
C) techno-conflict.
D) dual-use items.

Question 29

Home countries may implement special laws and regulations to ensure that the international business behavior of their firms is conducted within the:

A) legal, moral, and ethical boundaries considered appropriate.
B) city, county, and state boundaries as defined by local governments.
C) social and cultural boundaries of the local government.
D) safety of the state laws.

Question 30

As a result of World War I, the League of Nations concluded that:

A) war is war, and companies cannot be protected in a war environment.
B) two companies were secretly sharing confidential security information.
C) economic sanctions force countries to behave peacefully in the international community.
D) policing compliance was impossible.

Question 31

In the past, the participants in international trade did so based on wage-based competition. What has been the new competitive focus in recent years?

A) Human capital competition
B) Military production competition
C) Currency devaluation competition
D) Technology based competition

Question 32

In general, which of the following statements best describes the political environment in most countries in terms of their support for international marketing efforts?

A) Only firms who pay tariffs are looked favorably upon by the host government.
B) Most countries are supportive of international marketing.
C) Most countries try to deny international marketers access to their markets.
D) Children are the largest group of consumers.

Question 33

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

A) Mapping
B) Quota systems
C) Voluntary restraint agreements
D) Tariffs

Question 34

Today's export controls use a(n) _____ approach affecting specific hotspots.

A) tactical balance
B) strategic balance
C) economic balance
D) managerial balance

Question 35

What are the four areas of major concern which get government attention in most international markets?

A) Product, price, differentiation, and protection
B) Markets, media, money, and mechanics
C) Trade sanctions, export controls, import controls, and regulation of business behavior
D) Currency fluctuation, international monetary fund, taxes, and supply forecasts

Question 36

The Environmental Superfund requires:

A) Superfund participants to include underfunded nations in their tax base.
B) the United Nations be notified of new oil refinery construction.
C) chemical firms to pay fees based on their production volume.
D) that three trees be planted for every barrel of oil produced in an OPEC country.

Question 37

The character of the United Nations allows for sanctions as enforcement action by regional agencies. Which one is not an example of a regional agency?

A) Organization of American Unity
B) Organization of African Unity
C) Organization of American States
D) The Arab League

Question 38

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

A) only nations who are members of the UN can embrace it.
B) any permanent member of the Security Council can veto the sanctions.
C) all nations must comply.
D) a new set of rules must be written for the specific infractions.

Question 39

Dual-use products pose a problematic scenario for countries because:

A) most nations are not in the defense business.
B) it is hard for nations to agree on what is a military use and what is a civilian use.
C) all products cannot be screened by the United Nations.
D) trade embargoes disallow certain products to be used by major suppliers.

Question 40

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

A) embezzlement.
B) soft goods solicitation.
C) fortressing.
D) the gray market.

Question 41

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, this is called:

A) bribery.
B) generalization.
C) domestication.
D) pinpointing.

Question 42

What is the best course of action for a manager when conducting business in a foreign market environment?

Question 43

Laws that prohibit below-cost sales of products are known as:

A) underpricing laws.
B) skimming laws.
C) antidumping laws.
D) foreclosure laws.

Question 44

In 1991, the chairman of the German Treuhard was assassinated at his home in Germany by the Red Army Faction because of his:

A) representation of communism.
B) representation of capitalism.
C) representation of socialism.
D) representation of corruption.

Question 45

When firms refuse to do business with someone, often for political reasons, this is called:

A) image tarnishing.
B) speculation.
C) boycotting.
D) substantiation.

Question 46

List and briefly describe the 3 different types of political risk.

Question 47

Events caused by factors outside the control of government include all but which of these?

A) Confiscation
B) Strikes
C) Extortion
D) Revolution

Question 48

When a country transfers the ownership of the foreign firm from the firm to itself (the country), this is known as:

A) obfuscation.
B) fraternalism.
C) confiscation.
D) asset seizure.

Question 49

The seizure of foreign assets by a government with payment of compensation to owners is called:

A) expatriation.
B) appropriation.
C) expropriation.
D) exhausting resources.

Question 50

On occasion, the international marketer may be caught between clashing home and host country laws. How should the marketer handle such a situation?

Question 51

The act issued by the United States to exclude from anti-trust prosecution those firms that are cooperating to develop foreign markets is called the:

A) Putnam-Trust Act of 1916.
B) Foreign Trade Adjustment Act.
C) The Webb-Pomerene Act of 1918.
D) The North American Free Trade Agreement of 1999.

Question 52

Over-investing is characterized by international marketers:

A) fueling economic systems by producing free labor pools.
B) buying more land, space, and equipment than is needed.
C) using existing buildings and technology to open the new market.
D) seeking foreign investment in stock portfolios.

Question 53

Which of the following statements is true?

A) Countries differ in their laws as well in their use of these laws.
B) Countries differ in their laws, but their use of these laws are constant.
C) Only countries with democratic governments make laws.
D) Laws rarely affect international marketing.

Question 54

Coups have occurred in all of the following countries except:

A) Australia.
B) Ghana.
C) Ethiopia.
D) Venezuela.

Question 55

A major political risk in many countries involves what type of change?

A) Conflict and assault
B) Assault and violence
C) Frustration and conflict
D) Conflict and violence

Question 56

Food and health care are many times subject to:

A) price controls.
B) quotas.
C) situational variances.
D) prolonged statutory differences.

Question 57

Many adverse governmental actions are a result of the desire of the host country's nationals to maintain their independence and opposition to:

A) buying foreign products.
B) colonial remnants.
C) war.
D) global warming.

Question 58

Which of the following is not considered a political risk?

A) deflation
B) tariffs
C) expropriation of assets
D) restriction in repatriation of profits