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International Marketing > Chapter 6 SmartBook > Flashcards

Chapter 6 SmartBook Flashcards

1
Q

A sovereign state can do which of the following?

A. govern neighboring sovereign states

B. determine its geographical borders

C. enforce its laws only within its boundaries

D. make deals with other sovereign nations

A

B and D

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2
Q

A sovereign state has the power to

A. regulate its national and international trade.

B. oppose direct foreign investment.

C. require its citizens to follow laws.

D. enforce its national laws anywhere in the world.

A

A, B and C

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3
Q

A sovereign state’s land is ultimately governed by

A

the sovereign state itself.

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4
Q

Identify the issue that may affect the stability of a government.

A

An extremist party gaining power

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5
Q

True or false: International companies lose money when doing business with politically radical governments.

A

F

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6
Q

______ refers to both the powers exercised by a state in relation to other countries and the supreme powers exercised over its own members.

A

Sovereignty

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7
Q

A sovereign state can

A. reject applications for citizenship.

B. regulate trade with foreign entities.

C. regulate who may enter and leave the state.

D. be controlled by another state.

A

A, B and C

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8
Q

In the context of international law, which of the following can be done by a sovereign state?

A. It can govern its own territory.

B. It can sign treaties with other states.

C. It can independently change its geographical boundaries.

D. It can have legal equality with other states only if it joins NATO.

A

A and B

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9
Q

The United States of America is a ______.

A

constitutional federal republic

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10
Q

Which of the following is the best type of sovereign state to do business with?

A. The one that is receptive to foreign investment

B. The one that has powerful self-interest groups

C. The one that has a stable government

D. The one that is prone to constant changes in government philosophies

A

A and C

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11
Q

True or false: Surprising and/or extreme political shifts in government policy deter foreign investment.

A

T

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12
Q

A multinational company can be profitable under any type of government if the government

A

has a stable foreign trade policy with the company.

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13
Q

Identify a way in which feelings of nationalism make themselves evident.

A

Citizens purchase only items made within their country

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14
Q

Identify the view of Cyrus the Great, monarch of Persia, toward government.

A

He theorized that the job of government is to care for its citizens

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15
Q

Identify a way in which militant nationalism is exhibited.

A

Confiscation of multinational corporations’ assets

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16
Q

The countries of Vanadia and Bardemia have an agreement to trade various perishable products. Vanadia noticed a decline in the sale of its products in Bardemia. However, perishables from other countries were doing well. Marketers from Vanadia found that the problem stemmed from Bardemians’ distrust of Vanadia due to previous military conflict. This scenario exemplifies ______.

A

targeted fear and animosity

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17
Q

Why is it important for foreign companies to understand the standpoints of the major political parties in the country they would like to do business with?

A

Because political parties in power shape trade policy.

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18
Q

Which of the following helps reduce disruptions to international trade?

A

Seeking resolutions to trade disputes

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19
Q

Feelings of nationalism are often exhibited through ______.

A

strict control over foreign investment

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20
Q

Genrapay Inc., a multinational firm, has a branch of operations in a country. Due to rampant militant nationalism, the government seized Genrapay’s assets without any form of reimbursement and proceeded to nationalize the firm. This scenario best exemplifies ______.

A

confiscation

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21
Q

Following the collapse of colonialism, ______ was seen as the best solution to all the criticisms of government.

A

democracy

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22
Q

True or false: After a country expropriates a foreign business, the business tends to become nationalized.

A

T

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23
Q

Countries that display militant nationalism may______.

A. Liberalize exchange controls

B. discourage foreign investment

C. reduce import tariffs

D. nationalize industries

A

B and D

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24
Q

When the government of a country seizes an investment but makes some reimbursement for the assets, it is engaged in ______.

A

expropriation

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25
Q

True or false: Nationalism refers to one country’s hostility toward and fear of another specific country.

A

F

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26
Q

What causes a country to exercise exchange control?

A

too much money leaving the country

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27
Q

Which of the following is a cause of political risk in international marketing?

A

Contentious trade disputes

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28
Q

When a country requires that any product marketed in the country must include a certain percentage of local material, it has

A

a local-content law.

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29
Q

______ is the most drastic political risk that foreign investors face.

A

Confiscation

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30
Q

What strategy do host countries use to encourage foreign companies to buy products made within the host country?

A

restriction of certain imports

31
Q

Why were nationalized businesses historically rarely able to improve a country’s economic development?

A. They were less efficient than private businesses.

B. They could not compete in the global marketplace.

C. They were locally owned.

D. They used poor-quality raw materials for production.

A

A and B

32
Q

Which tactic is designed to control foreign investment?

A

tax controls

33
Q

To understand what the people of a country believe and fear, and why they are prejudiced about certain matters, a marketer should be familiar with not only current events but also the nation’s entire history. T/F

A

T

34
Q

Multinational companies may encounter problems when

A

labor unions are powerful and supported by the government.

35
Q

What may happen to foreign investors when a host country’s currency is devalued?

A

Financial Loss

36
Q

Why are trade sanctions considered largely ineffective?

A

because traders from other major nations ignore them

37
Q

In the context of conditions for investment, some countries may mandate

A

local content to make up a portion of any product sold within a country.

38
Q

Identify a characteristic feature of political and social activists (PSAs).

A

They are an important political force that should not be dismissed.

39
Q

The use of import restrictions to encourage the development of domestic industry becomes a problem when

A

a country cannot supply a consumer demand.

40
Q

Governments around the world have applied some of the toughest trade ______ on the Putin administration and the Russian economy.

A

sanctions

41
Q

How do some underdeveloped countries quickly acquire operating funds?

A

Severe taxation of profitable foreign businesses

42
Q

Identify the goals of terrorism.

A. It aims to raise doubt regarding the quality of the products of multinational companies.

B. It targets multinationals in order to cast a shadow on the culture that they promote.

C. It aims to acquire money through kidnapping high-level employees and demanding ransom.

D. It aims to disrupt daily life and cause widespread terror.

A

C and D

43
Q

Which of the following are labor problems that companies can face in foreign countries?

A. Companies may be allowed to operate with no laws or regulations.

B. Companies may be required to share profits.

C. Companies are not allowed to negotiate with local governments and labor unions.

D. Companies may not be allowed to lay off workers.

A

B and D

44
Q

Identify a true statement regarding Steven Pinker’s arguments about warfare, strife, and violence on the planet.

A

At this point in time, humanity has less to fear regarding violence than in previous eras.

45
Q

Identify a risk related to international marketing.

A

A country or group of countries may boycott businesses from a specific country.

46
Q

Which of the following is a threat to international marketing?

A

Cyber attacks

47
Q

Which of the following statements is true about political and social activists (PSAs)?

A

They can be a strong force in marshaling public opinion.

48
Q

Identify a true statement regarding the risks of international marketing.

A

It remains challenging to assess which products and companies are politically vulnerable.

49
Q

Identify a true statement regarding international marketing.

A

Marketing products that are politically sensitive in a host country should be avoided if possible.

50
Q

What makes U.S. companies doing business in foreign countries attractive as targets for terrorism?

A

They are symbols of the political and cultural system that terrorists disagree with.

51
Q

Identify the true statements regarding political risk assessment.

A. It is an attempt to predict political instability.

B. It helps managers identify and assess political events.

C. It should not be used to evaluate possible future international business decisions.

D. It can predict the possible devaluation of currency.

A

A and B

52
Q

According to Steven Pinker, which of the following reasons explain lower rates of violence on the planet?

A. An increase in the interruptions to the flow of trade

B. The division of the world into three spheres of influence based on trade

C. An increase in the involvement of women in the government

D. Laws and governance

A

C and D`

53
Q

A multinational company can improve relations with the government of a host country by

A

increasing the host country’s exports.

54
Q

Identify the problems related to cyberterrorism.

A. All cyberattacks can be stopped before they cause considerable damage.

B. Determining the nature of the cyberattack is not easy.

C. Each wave of viruses gets less damaging as technology advances.

D. Tracing the crime back to the cyberterrorists and criminals is difficult.

A

B and D

55
Q

Identify an accurate statement about joint ventures.

A

Establishing joint ventures with a third-country MCN may reduce financial vulnerability in a host country.

56
Q

Countries attract international investment in certain high-priority sectors by offering

A. company registration.

B. exemption from exchange controls.

C. private litigation.

D. tax breaks.

A

B and D

57
Q

Identify a way in which multinationals can reduce their political vulnerability and risk when doing business in host countries.

A

By engaging multiple investors and banks in the investment

58
Q

Which of the following products are most likely to be categorized as politically sensitive?

A

Products that symbolize the company’s home country

59
Q

What is a major liability for international marketers?

A

failure of the host country’s government

60
Q

Identify a risk to MNCs that stems from their use of licensing to reduce political vulnerability.

A

They risk losing money if a licensee discontinues paying the licensing fee.

61
Q

Which of the following best explains why foreign companies may encounter hostile political environments?

A

Many believe foreign companies care only about profit and exploit their nation’s resources.

62
Q

Planned domestication means ______.

A

involving the host country’s citizens in all aspects of company functions

63
Q

Multinationals can reduce their political vulnerability by ______.

A

creating joint ventures with the host country or a third country

64
Q

A multinational company can avoid potential political risks by ______.

A

influencing policies of the host government

65
Q

When multinationals include several investors and banks in financing an investment in a host country, they can be protected from government takeover if the ______.

A

financing banks have made loans to the host country

66
Q

Political payoffs ______.

A

are against the law in the United States, but they are a common practice in certain countries

67
Q

Why should a government support foreign investment?

A

to accelerate the development of its economy

68
Q

Identify a strategy that may drastically minimize the political vulnerability of an MNC in situations where a company has an exclusive technology.

A

Licensing

69
Q

What is a good solution for a MNC that is doing business in a host country that insists upon local participation in the company?

A

planned domestication

70
Q

A batch of automobiles produced by the overseas manufacturing unit of a multinational automobile manufacturer was recalled due to defects in engine transmission. Instead of blaming faulty manufacturing, the MNC decided to fix its design and inspection routines and publicly admitted its guilt in the matter. Identify the strategy used by the MNC to avoid political risks in its overseas operations.

A

Political bargaining

71
Q

Which of the following is the least recommended approach to avoiding political vulnerability and risk?

A

Which of the following is the least recommended approach to avoiding political vulnerability and risk?

72
Q

True or false: One government may both encourage and discourage international marketing.

A

T

73
Q
A

International Marketing (9 decks)

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