Question 1

Bureaucracy is listed as a political risk category by:

Accepted Answer

C

Question 2

As the ruble's value fell through most of 2014,European firms began to feel the effects.

Accepted Answer

As the ruble's value fell, it made imports more expensive for Russians, reducing their purchasing power for goods from European firms, thus impacting these firms' sales and revenues.

Question 3

British Petroleum,British Airways,and Rolls-Royce were privatized under Margaret Thatcher's administration.

Accepted Answer

Margaret Thatcher's administration was known for its strong push towards privatization, including the privatization of major British companies such as British Petroleum (partially privatized in the 1980s), British Airways (privatized in 1987), and Rolls-Royce (privatized in 1987).

Question 4

A current global phenomenon in both nonmarket and market structures is the trend toward capitalism.

Accepted Answer

The answer of A current global phenomenon in both nonmarket...

Question 5

If a foreign company is taken over by the host country government,and some form of compensation is paid,"expropriation" has occurred.

Accepted Answer

Expropriation refers to the act of a government taking private property for public use, with compensation provided to the original owners.

Question 6

The governmental action to dispossess a foreign company or investor is known as:

Accepted Answer

Expropriation refers to the governmental action of taking private property, often from foreign investors, for public use or benefit, typically with compensation.

Question 7

Which of the following statements does not reflect performance and service provided by Uber nationally and internationally?

Accepted Answer

The European Commission has not officially declared Uber to be fundamentally different from taxi services; rather, it has been involved in various legal and regulatory discussions about how Uber should be classified and regulated.

Question 8

Categories of political risk listed by EIU (Economist Intelligence Unit)include all of the following except:

Accepted Answer

Social injustice is not listed as a category of political risk by the Economist Intelligence Unit (EIU). The EIU typically focuses on risks directly related to political actions or instability, such as war, politically motivated violence, international disputes, and corruption, rather than broader social issues.

Question 9

In Europe,individual EU countries gave up the right to have their own currencies,ceded the right to set their own product standards,and have made other sacrifices in exchange for improved market access.

Accepted Answer

The European Union (EU) member states that adopted the euro as their currency gave up their national currencies. Additionally, EU countries adhere to common product standards and regulations to facilitate trade and market access within the single market.

Question 10

The Brexit issue can be viewed as a mandate by Britons to regain some of what their nation lost to the "collective sovereignty" of the EU28.

Accepted Answer

Brexit was largely driven by the desire among many Britons to regain national sovereignty and control over laws, borders, and immigration, which they felt had been diminished by membership in the European Union.

Question 11

Terms like crony capitalism and kleptocracy refer to rampant corruption and bribery within capitalism.

Accepted Answer

The answer of Terms like crony capitalism and kleptocracy refer...

Question 12

Russian consumers have little choice but to "buy local" since farmed salmon has expanded to keep up with booming demand.

Accepted Answer

Russian consumers have limited access to farmed salmon due to sanctions and geopolitical tensions, leading to a reliance on domestic sources which may not fully meet the booming demand.

Question 13

The roots of modern international law can be traced to the twentieth-century Peace of Westphalia.

Accepted Answer

The roots of modern international law can be traced back to the Peace of Westphalia, which occurred in 1648, marking the end of the Thirty Years' War in Europe. This event is often considered the beginning of the state system and the principles of sovereignty and non-interference in the affairs of other states, foundational to modern international law.

Question 14

Various types of political risk insurance to U.S.companies is provided by:

Accepted Answer

OPIC (Overseas Private Investment Corporation), now known as the U.S. International Development Finance Corporation (DFC), provides political risk insurance to U.S. companies investing in emerging markets. This insurance helps mitigate risks such as expropriation, political violence, and currency inconvertibility.

Question 15

________ refers to governmental action to dispossess a foreign company or investor.Compensation is generally provided,often not in the "prompt,effective,and adequate" manner provided for by international standards.

Accepted Answer

Expropriation refers to the act of a government taking privately owned property, typically for a public purpose, with compensation being offered to the dispossessed owner. However, the compensation may not always meet the international standards of being prompt, effective, and adequate.

Question 16

The high level of political risk currently evident in Russia can be attributed in part to:

Accepted Answer

The high level of political risk in Russia, which affects the environment for foreign companies, can be attributed to various factors including geopolitical tensions, economic sanctions, and internal policies that create an uncertain operating environment for international businesses. Changing the country's name, flag, borrowing from the IMF, or participation in the WTO are not direct causes of political risk in Russia.

Question 17

In Great Britain,the Wine and Spirit Association estimates that,on average,cars returning from France are loaded with 80 bottles of wine.This is most likely due to:

Accepted Answer

The primary reason cars returning from France to Great Britain are loaded with 80 bottles of wine, on average, is due to high excise and VAT taxes in Great Britain. Purchasing wine in France, where these taxes may be lower, allows individuals to save money even after considering the cost of travel.

Question 18

Any company doing business outside the home country should first carefully study the ________ in the target country.

Accepted Answer

Understanding the political culture of a target country is crucial for any company doing business internationally, as it affects regulations, business practices, and the overall business environment.

Question 19

If a foreign company is taken over by a host country government,and some form of compensation is paid,"confiscation" has occurred.

Accepted Answer

When a foreign company is taken over by a host country government and some form of compensation is paid, it is referred to as "nationalization" or "expropriation," not "confiscation." Confiscation typically involves the taking of property without the payment of compensation.

Question 20

What do value added taxes (VAT)encourage in countries such as China?

Accepted Answer

Value Added Taxes (VAT) can lead to cross-border shopping as consumers seek to purchase goods in areas with lower VAT rates, thus potentially saving money. This is especially true in regions where countries with differing VAT rates are geographically close to each other, encouraging consumers to shop in a country with a lower VAT to reduce the overall cost of their purchases.

Quiz 5: The Political,legal,and Regulatory Environments