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Homework answers / question archive / San Francisco State University IBUS 330 International Business: The New Realities, 2e Chapter 7 Political and Legal Systems in National Environments 1)Corporate managers must adhere to the laws of the country in which they do business

San Francisco State University IBUS 330 International Business: The New Realities, 2e Chapter 7 Political and Legal Systems in National Environments 1)Corporate managers must adhere to the laws of the country in which they do business

Law

San Francisco State University

IBUS 330

International Business: The New Realities, 2e

Chapter 7 Political and Legal Systems in National Environments

1)Corporate managers must adhere to the laws of the country in which they do business.

 

 

 

  1. Most democracies also include elements of socialism.

 

 

  1. Market forces and free trade are encouraged in democracies and are supported by legal systems that apply fair and equal treatment to all citizens.

 

 

 

 

 

  1. Common law originated in Rome and can be found in France, Germany, and Latin America.

 

 

 

 

 

  1. Like most legal systems, Islamic law evolves with changing times to better meet the needs of Islamic society.

 

 

 

  1. Government agencies, institutions, and public officials influence the manner in which foreign firms conduct business.

 

 

 

 

  1. The European Union impacts international trade and business because of its ability to enact and enforce laws and regulations.

 

 

 

  1. Expropriation is the term used to describe a host-country government seizing the assets of a foreign corporation and providing no compensation in return.

 

 

 

  1. Embargoes are a policy tool used to forbid trade with particular countries.

 

 

  1. A foreign firm's entry strategy, operations, and performance are often dictated by foreign investment laws.

 

 

 

  1. Manufacturers and sellers face legal penalties and lawsuits due to product safety and liability laws that ensure accountability for damage, injury, or death from defective products.

 

 

  1. Employees working in foreign nations are used by firms to evaluate the political and cultural environment for any potential risks or threats which might harm the firm and its international interests.

 

 

 

  1. The protection of intellectual property rights is guaranteed and enforceable in nearly every country in the world.

 

 

 

  1. All of the following are ways that firms can benefit from a foreign market's political and legal systems except        .
    1. tax holidays
    2. subsidies
    3. legal protection
    4. cash incentives

 

 

  1. A company's potential loss of profitability caused by a nation's political or legal setting is known by which of the following terms?
    1. commercial risk
    2. currency risk
    3. cross-cultural risk
    4. country risk

 

 

  1. Country risk is also referred to as which of the following?

 

    1. political risk
    2. multilateral risk
    3. government risk
    4. legal factor risk

 

 

  1. An individual from a country with a high degree of political risk might most likely be from which of the following?
    1. Canada
    2. Singapore
    3. Iraq
    4. Japan

 

 

  1. An individual from a country with a low degree of political risk might most likely be from which of the following?
    1. Venezuela
    2. Canada
    3. Zimbabwe
    4. Iraq

 

 

  1. Which of the following helps explain why India was once characterized by high country risk?
    1. Taxes and financial incentives benefit Indian businesses over foreign firms.
    2. Indian business leaders distrust most European corporations.
    3. Political leaders enacted laws targeted against foreign firms.
    4. Indian leaders fear the modern influences of American firms.

 

 

  1. Which of the following characterizes country risk?
    1. The political and legal systems of adjacent nations greatly impact the country risk of nations that host foreign firms.
    2. Country risk changes only after the creation of laws and regulations that affect foreign firms.
    3. A nation's country risk level remains fairly constant until the election and installation of a new political leader.
    4. Although country risk never disappears, its intensity fluctuates with political changes and legal happenings.

 

 

 

  1. A political system includes each of the following except                               .
    1. lobbying groups
    2. trade unions
    3. legislative bodies
    4. investment banks

 

 

  1. The three major types of current political systems are                            .
    1. totalitarianism, socialism, and democracy
    2. socialism, democracy, and monarchy
    3. totalitarianism, liberalism, and fascism
    4. democracy, republicanism, and oligarchy

 

 

  1. Which of the following is not a typical principal function of a political system?
    1. regulate private sector investments
    2. establish stability based on laws
    3. provide protection from external threats
    4. govern the allocation of valued resources

 

 

  1. Which of the following countries is considered primarily socialist?
    1. Germany
    2. Canada
    3. Venezuela
    4. Libya

 

 

  1. Totalitarian states are characterized by all of the following except                               .
    1. dictator-led state political party
    2. state-supported religious ideology
    3. state-regulated public behavior
    4. free flow of information in the mass media

 

 

 

  1. Which of the following is the underlying principle of socialism?
    1. The welfare of individuals far outweighs the welfare of society.
    2. The well-being of the group supersedes the well-being of individuals.
    3. The rights of individuals should be balanced with societal needs.
    4. The state should protect itself from individual and group interests.

 

 

 

  1. Which form of government is characterized by private property rights and limited government?
    1. autocratic
    2. democratic
    3. socialist
    4. totalitarian

 

 

 

  1. What has been the impact of social democracy on international business relations in some European countries?
    1. Regulations have forced foreign firms to invest elsewhere.
    2. Politically conscious foreign firms invest in socialist nations.
    3. Low income tax rates have encouraged an influx of FDI.
    4. Political stability decreases the country risk of socialist nations.

 

 

 

  1. Which of the following is an element of socialism often found in democratic societies?
    1. government subsidies for foreign firms
    2. government sponsored businesses
    3. government regulation of the public sector
    4. government control of information technology

 

 

 

  1. Which of the following pairs of nations are on opposite ends of the political freedom scale?
    1. New Zealand and Chile
    2. China and Syria
    3. Japan and South Africa
    4. Cuba and Sweden

 

 

 

  1. A command economy can be characterized by all of the following except                                 .
    1. a totalitarian based environment
    2. limited government intervention
    3. state-driven industrial development
    4. extensive bureaucratic system

 

 

 

  1. Which of the following countries is considered a mixed economy?
    1. Norway
    2. Russia
    3. United States
    4. India

 

 

 

  1. An effective legal system is characterized by which of the following?
    1. ineffectual government restrictions
    2. systematically enforced laws and regulations
    3. political involvement in business transactions
    4. state-mandated judiciary organizations

 

 

 

 

  1. Which of the following terms is used to refer to the existence of a legal system based on clear rules and fair enforcement?
    1. civil law
    2. socialist law
    3. culture of law
    4. rule of law

 

 

 

  1. The U.S. Securities and Exchange Act encourages business transactions by                                 .
    1. protecting public companies from government scrutiny
    2. evaluating the inner-workings of privately owned firms
    3. requiring public companies to disclose their financial status
    4. shielding investors from bankruptcy and excessive taxation

 

 

 

  1. The Middle East is an example of a region primarily ruled by which of the following legal systems?
    1. religious
    2. socialist
    3. civil
    4. common

 

 

 

  1. Legal precedents and past practices are characteristic of which legal system?
    1. common
    2. religious
    3. socialist
    4. civil

 

 

 

  1. Common law can best be described as a system                            .
    1. designed from political and legislative regulations
    2. derived from religious texts and systems
    3. developed and recorded in a systematic manner
    4. based on legal interpretations of judges

 

 

 

  1. Which of the following types of organizations would wield the greatest power over a firm attempting to do business in Canada?
    1. Canada's Ministry of Foreign Affairs
    2. World Trade Organization
    3. North American Free Trade Area
    4. Organization for Economic Cooperation and Development

 

 

  1. Which of the following is a typical complaint of host-country competitors against foreign firms?
    1. Foreign firms burden the host-country with infrastructure requirements.
    2. Foreign firms do not have to obey host-country laws and regulations.
    3. Foreign firms receive financial support from host-country governments.
    4. Foreign firms lure local workers away from host-country businesses.

 

 

  1. Boycotts and protests have the potential to harm businesses by                           .
    1. preventing businesses from shipping their products to foreign markets
    2. reducing sales and requiring additional public relations activity
    3. destroying the ability of a firm to carry on normal business operations
    4. raising concerns about a firm's foreign operations by initiating lawsuits

 

 

  1. All of the following industries are particularly vulnerable to the threat of terrorism except

                     .

    1. agriculture
    2. entertainment
    3. retailing
    4. travel

 

 

  1. United States laws limit foreign investments that might affect which of the following areas?
    1. immigration reform
    2. labor negotiations
    3. national security
    4. rate of inflation

 

 

  1. The ban on cigarette advertisements in France falls under which of the following categories?
    1. environmental laws
    2. product and liability laws
    3. foreign investment laws
    4. marketing and distribution laws

 

 

  1. Repatriation laws affect MNEs that earn profits in foreign countries by                                .
    1. enforcing strict stipulations on cross-border transactions and joint ventures
    2. limiting the amount of net income and dividends that can be transferred to the home- country headquarters
    3. restricting the amount of money that can be re-invested into the foreign facility
    4. imposing restrictions on the distribution of products from the foreign facility

 

 

  1. Which of the following terms is used to refer to the application of home-country laws to conduct outside of national borders?
    1. anti-boycott regulations
    2. extraterritoriality
    3. transparency
    4. international contracts

 

 

  1. Which of the following is the term for a process used by managers to assess potential risks and threats to a firm?
    1. scanning
    2. Sarbanes reform
    3. conciliation
    4. arbitration

 

 

  1. A manager who wished to learn about country risk in a host country would most likely consult which of the following?
    1. analysis records of competitor firms
    2. employees working in the host country
    3. host country nationals working abroad
    4. employees working in the parent country

 

 

  1. Which of the following is the least adversarial method of resolving a contractual dispute?
    1. trial
    2. arbitration
    3. litigation
    4. conciliation

 

 

 

  1. Representative A is most likely from which of the following countries?
    1. Romania
    2. Zimbabwe
    3. Egypt
    4. Australia

 

 

 

  1. Representative B is most likely from which of the following countries?
    1. Spain
    2. North Korea
    3. Bolivia
    4. Greece

 

 

 

  1. Representative C is most likely from which of the following countries?
    1. Uruguay
    2. Indonesia
    3. Pakistan
    4. Afghanistan

 

 

 

 

  1. Which of the following questions would be more important for Zane legal experts to consider before recommending Country A or Country B?
    1. Have other corporations based in these two countries been profitable?
    2. What is the prevalence of industrial crime in these two countries?
    3. How would a contractual dispute with a local vendor be resolved?
    4. Would local environmental organizations target Zane for its manufacturing practices?

 

 

  1. Which of the following statements is most likely applicable to Country B?
    1. Individual rights are less important than states' rights.
    2. Ethics and morality are the underlying tenets.
    3. Rules and principles are the basis of judicial decisions.
    4. Detailed contracts clearly state all potential contingencies.

 

 

 

  1. Which of the following supports Country B over Country A?
    1. Most countries in the world follow the principles of common law.
    2. The flexibility of common law allows for judicial interpretation in unique cases.
    3. Common law nations administer justice based on a structured set of rules.
    4. The legislative origin of common law precedents offers judicial equity.

 Page Ref: 182 Skill: Critical Thinking

; Reflective thinking skills

 

  1. Which of the following supports Country A over Country B?
    1. Contractual noncompliance provisions are broader in scope.
    2. Contracts are so detailed that they are expensive to draft.
    3. Intellectual property rights are loosely upheld and enforced.
    4. Judges confer with legislators on international business issues.

 

 

 

  1. Which of the following is the most important issue to consider when determining the best entry strategy for Super Sports?
    1. What are the regulations regarding income repatriation?
    2. What type of promotion and advertising is prohibited?
    3. What are the restrictions on inward foreign direct investment?
    4. Is the recycling of product packaging mandatory?

 

 

  1. Which of the following supports a decision in favor of Super Sports opening a store in Norway?
    1. MNEs may transfer profits back to the home country without restriction.
    2. The opening of warehouse-style stores requires the approval of local retailers.
    3. Product injury cases generally rule in favor of plaintiffs regardless of evidence.
    4. Advertising and marketing are banned under local distribution laws.

 

 

  1. Which of the following would most likely be opposed to Super Sports opening a store in Norway?
    1. labor unions
    2. local sports retailers
    3. international banks
    4. local sports enthusiasts

 

 

 

  1. In a short essay, describe how the political and legal systems of a host-country can both harm and benefit a foreign firm.

 

 

 

  1. In a short essay, describe the two elements which contribute to country risk. Provide examples of countries with both high and low country risk, and explain the reasons for these two distinctions.

 

 

 

  1. In a short essay, provide an overview of totalitarianism, socialism and democracy. Provide examples of nations which adhere to each system.

 

 

  1. In a short essay describe country risk, and discuss how political and legal systems contribute to country risk. Explain the differences between political systems and legal systems in your answer.

 

 

 

 

 

 

 

 

 

  1. In a short essay, explain the connection between democracy and economic freedom. What are some of the characteristics associated with political and economic freedom?

 

 

 

  1. In a short essay, discuss command economies. Provide examples of nations that exhibit characteristics of command economies and why command economies are no longer common today.

 

 

 

 

  1. In a short essay, compare and contrast common law with civil law specifically as the two systems relate to international business.

 

 

 

 

 

  1. In a short essay, explain the purpose of special interest groups. How do these organizations affect international business? Provide examples to support your answer.

 

 

 

  1. What effect does war have on international business? Explain your answer in a short essay and provide an example for illustration.

 

 

  1. In a short essay, provide examples of countries with strict and weak environmental laws. How do the environmental regulations impact firms doing business in these nations?

 

 

 

  1. What are some of the risks and benefits for firms involved with international e- commerce? Explain your answer in a short essay.

 

 

  1. In a short essay, explain the term extraterritoriality. Provide examples to illustrate how

 

extraterritoriality affects international business.

 

 

  1. What is transparency? In a short essay, explain how transparency varies around the world.

 

 

  1. In a short essay, describe the similarities and differences of common law and civil law, and explain how inadequate or underdeveloped legal systems pose a risk for international businesses.

 

 

 

 

 

 

 

  1. In a short essay, describe the methods used by governments to seize the assets of foreign firms. How would proactive environmental scanning mitigate this risk?

 

 

 

 

 

  1. In a short essay, explain why contract laws can represent a country risk arising from the host country legal environment, and explain the three approaches firms typically employ to settle international contractual disputes.

 

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