quiz 2 Flashcards
Under Prime Minister Cameron, the British government sold the Royal Mail; shares can now be purchased on the London Stock Exchange. This is an example of
a.expropriation
b.centralization
c.privatization
d.nationalization
c. privatization
“The UK government continues to privatize. It sold the Royal Mail in October 2013 and you can buy shares of Royal Mail on the London Stock Exchange.”
Businesses are unlikely to profit from any political change or instability.
True/False
False
“Business does not crave stasis; often businesses can profit from opportunities that accompany change. Besides, stasis is unlikely in our increasingly complex global environment.”
Firms are nationalized when the goal of the government is to spread a socialist-communist ideology.
True/False
False
“One fundamental motivation for nationalization is the belief that governments can better ensure equal access to and control over basic services we consider public goods, such as education and health care, than private owners could do. In addition, government ownership can protect against corruption, put social goals ahead of profit, and reliably provide vital services like national defense.”
When the U.S. military contracts out support functions in war zones, it is engaged in nationalization.
True/False
False
“When any government contracts out government work to the private sector, it is engaged in privatization.”
Information that firms need in order to accurately assess a country’s risks varies according to what two major factors?
a. time needed for initial market entry and size of anticipated workforce
b. presence of competitors and presence of terrorist or criminal operations
c. qualifications of workforce and type of government
d. type of business and time needed to gain a satisfactory return on investment
d. type of business and time needed to gain a satisfactory return on investment
“The types of information a firm will need to judge country risks vary according to the nature of its business and the length of time required for the investment, loan, or other involvement to yield a satisfactory return.”
To avoid the risk of cybercrime, the best approach is to stay out of foreign markets.
True/False
False
“Cybercrime is borderless, no one government or legal system can control it.”
What should managers be aware of regarding the relationship between a risk analysis and the time period required for satisfactory return on investment opportunities?
a. Risk analysis is only useful for long-term opportunities in other countries.
b.Risk analysis is only useful for long-term opportunities in other countries.
c.The longer the time horizon, the more reliable the risk analysis.
d.The longer the time horizon, the less reliable the risk analysis.
d.The longer the time horizon, the less reliable the risk analysis.
“Problems often increase over the time of the investment and cannot be resolved. The longer the time horizon, the less reliable the risk analysis can be.”
The U.S. Foreign Corrupt Practices Act was designed to increase accounting transparency and to
a.punish foreign bribery of U.S. officials.
b.increase foreign competition for U.S. goods.
c.prohibit bribery of foreign officials.
d.drive down consumer prices in the United States.
c. prohibit bribery of foreign officials.
“Congress passed the Foreign Corrupt Practices Act (FCPA) in response to questionable payments by U.S. companies to foreign officials. Key provisions of the act prohibit bribery of foreign officials and set requirements for transparency of accounting transactions.”
What legal advantage does the international business community perceive in conducting business in Hong Kong compared to other regions in China?
a. It follows a religious law tradition.
b. It operates according to the common law system.
c. It strictly adheres to civil law.
d. It has a less developed legal system.
b. It operates according to the common law system.
“Hong Kong continues to offer legal advantages largely because Hong Kong has a tradition of law adopted from British colonial days that has been tried and tested and is trusted by international businesses. A World Bank indicator on the rule of law scores Hong Kong as a 92 out of 100. It gives China a 45.”
Legal uncertainties do not constrain the growth of international business.
True/False
True
“Despite legal uncertainties of doing business in other countries, international business activities will continue to increase in the future.”
Protecting a trade secret is usually less costly and time-consuming for businesses than initiating a patent.
True/False
True
“Trade secrets are the most common form of IP protection that international businesses pursue. Protecting a trade secret is usually less costly and time-consuming than initiating a patent; all you need to do is show you are making an effort to keep the confidential information secret.”
Which statement is accurate regarding international patent rights?
a. The legal rights of patent holders are universally applied.
b. A patent is viewed narrowly as a property right in most countries.
c. In the U.S., a utility patent lasts for 20 years.
d. In the EU, applicants must file separately for a patent in each member country.
c. In the U.S., a utility patent lasts for 20 years.
“Each country administers and handles patents differently. In the United States, a patent is viewed more narrowly as a property right that “excludes others from making, using, offering for sale, or selling the invention” and is divided into three types: utility, design, and plant. In the U.S., a utility patent is for an innovative, useful invention or process, and it gives the patent holder 20-year protection against use by others.”
Tran’s company has just offered him a position in the London office. He will live and work there for the next two years but retain his U.S. citizenship. Tran is surprised to learn that he must still pay U.S. employment taxes. This is an example of
a. international contract enforcement.
b. public international law.
c. UK/U.S. arbitration.
d. extraterritorial application of laws.
d. extraterritorial application of laws.
“A country’s attempt to apply its laws to nonresidents and foreigners, and to activities that take place beyond its borders is referred to as the extraterritorial application of laws.”
The accounting standards followed by U.S. companies are guided by
a. the SEC.
b. the AACSB.
c. the Fed.
d. the IASB.
a. the SEC.
“U.S. accounting practice is guided by the Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) and follows standards known as generally accepted accounting principles (GAAP).”
What was the immediate impact of Russia’s warning regarding ships sailing around Ukrainian ports?
a. Global grain prices rose sharply.
b. Ukraine’s grain exports remained unaffected.
c. Ukraine resumed its grain exports to the Black Sea.
d. Global grain prices dropped significantly.
a. Global grain prices rose sharply.
