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Copyright?2020McGraw-HillEducation.Allrightsreserved.
NoreproductionordistributionwithoutthepriorwrittenonsentofMcGraw-HillEducation.
InternationalMarketing,18e(Cateora)
Chapter6ThePoliticalEnvironment:ACriticalConcern
1)Sovereigntyisexclusivetothesupremepowersexercisedbyanationoveritsownmembers.
2)Sovereigntymaybethreatenedbyforeigninvestment.
3)AdherencetotheWorldTradeOrganization(WTO)doesnotresultinthelossofnationalsovereignty.
4)Foreignbusinessesnolongerneedtobeconcernedaboutthestabilityorinstabilityofprevailinggovernmentpolicies.
5)Pressurefromnationalistandself-interestgroupsaffectthestabilityofagovernment.
6)SaudiArabiabeganpermittingwomentovotein2015.
7)Nationalismsupportsforeignbusinessbecauseitimproveslocaleconomies.
8)Nationalisticfeelingsingeneralbearnorelationtothedomesticeconomy.
9)Propertymaylegallybeseizedbythegovernmentwithorwithoutcompensation.
10)Themostseverepoliticalriskofglobalbusinessisthegovernmentactionofdomestication.
11)Theultimategoalofdomesticationistorequirecompaniestoproducemoreproductstoexportthanwasthecasebeforedomestication.
12)Throughexpropriationandnationalization,nationalizedbusinesseshavebecomemoreefficient,technologicallystrong,andcompetitiveinworldmarkets.
13)BarringLatinAmerica,therisksofconfiscationandexpropriationhavedecreasedoverthelasttwodecades.
14)Manycountrieshavedomesticationasaconditionforinvestment.
15)Pricecontrolsareonlytargetedatnonessentialproducts.
16)Politicalsanctionsareusuallyanunsuccessfulmeansofachievingthegoalofforcingacountrytoacceptthedemandsoftheboycottingcountry.
17)Politicalandsocialactivistsgenerallyhavenoimpactonthenormalflowoftrade.
18)Nongovernmentalorganizationscanaffectthepolicydecisionsmadebygovernmentsthroughlobbying.
19)Riskofviolencedoesnottendtobeaconsiderationinassessingthepoliticalvulnerabilityofamultinationalcompany'sactivities.
20)Internationalwarfareisfastgainingpopularityamongnations.
21)Duetoadvancementsintechnology,itisrelativelyeasytodeterminewhetheracyberattackhasbeenlaunchedbyaroguestate,aterrorist,orahackerasaprank.
22)Asculturalandpoliticalscenariosvarysowidelyacrossnations,thereisnowaytogeneralizethetendencyforaparticularproducttobepoliticallysensitive.
23)Productsthathaveorareperceivedtohaveaneffectontheenvironmentaremorelikelytobepoliticallysensitive.
24)Itiscommonforasinglecompanytodirectlycontroloralterthepoliticalenvironmentofthecountrywithinwhichitoperates.
25)RelationsbetweengovernmentsandMNCsaregenerallynegative,particularlyiftheinvestmentmadebytheMNCsincreasesexportsorreducesimports.
26)Licensingisnoteffectiveinsituationswherethetechnologyisuniqueandtheriskishigh.
27)Planneddomesticationinvolvestakingoveranindustryinaforeigncountry.
28)ItisillegalforU.S.citizenstopayabribeunlessitisacommonpracticeinthehostcountry.
29)TheprincipalagencythatsupportsU.S.businessabroadistheGlobalChamberofCommerce(GCC).
30)TheAgencyforInternationalDevelopmentunderwritestradeandinvestmentsforU.S.firms.
31)Inthecontextofinternationallaw,a________governsitsownterritoryandmayenterintoagreementswithothernations.
A)bounded
B)sovereign
C)legal
D)liberal
E)neutral
32)Asovereignstateisonethat
A)isobligatedtobeamemberoftheWorldTradeOrganization.
B)hasitspoliticalandeconomicsystemsdeterminedbytheUnitedNationsDevelopmentProgram.
C)enjoysfulllegalequalitywithotherstates.
D)hasitsterritorygovernedbytheUnitedNations.
E)isboundedbyexternalcontrol.
33)________referstoboththepowersexercisedbyastateinrelationtoothercountriesandthesupremepowersexercisedoveritsownmembers.
A)Sovereignty
B)Self-governance
C)Federalism
D)Autocracy
E)Nationalism
34)InApril2009,theG20nationsagreedtocedesomesovereigntyand
A)includeallG20nationsintheSecurityCouncil.
B)raiseoilprices.
C)increaseinfrastructurefunding.
D)rejectprotectionism.
E)increaseaidtoSouthAfrica.
35)AdherencetotheWTOinevitablymeans
A)adefiniteincreaseinimporttariffsworldwide.
B)thelossofnationalsecuritytoalargeextent.
C)reductioninworldtradeofatleast70percent.
D)thelossofsomedegreeofnationalsovereignty.
E)completestoppageofforeigndirectinvestments.
36)Foramultinationalfirm,theidealpoliticalclimateisa
A)countrywhereinternationallawsdonotapply.
B)countrywherefavorscanbepurchasedeasily.
C)countrywithastableandfriendlygovernment.
D)governmentwithabsolutepower.
E)governmentthatradicallyshiftsitsphilosophy.
37)Whatisthetoppoliticalissueconcerningforeignbusinesses?
A)demographicprofileofpoliticalleaders
B)governmentpoliciesoninfrastructure
C)economicawarenessofpoliticalleaders
D)stabilityofprevailinggovernmentpolicies
E)membershipofgovernmentsintradetreaties
38)Whatisoneofthemainpoliticalcausesofinstabilityininternationalmarkets?
A)variedtaxingconventions
B)differencesineconomicphilosophies
C)globalfocus
D)environmentalawareness
E)tradedisputes
39)Monarchy,like________,isaformofgovernmentruledbyone.
A)aristocracy
B)dictatorship
C)democracy
D)monopoly
E)oligarchy
40)TheancientGreeksconceivedthreefundamentalformsofgovernment.Whichtermreferstoagovernmentruledbyone?
A)aristocracy
B)monarchy
C)democracy
D)monopoly
E)oligarchy
41)Whichgovernmentformcanbemostaccuratelydescribedasrulebyfew?
A)aristocracy
B)dictatorship
C)democracy
D)monopoly
E)monarchy
42)AccordingtoancientGreeks,whatfundamentalgovernmentformrepresentsrulebymany?
A)aristocracy
B)dictatorship
C)democracy
D)monopoly
E)monarchy
43)Whatisacommontermforaformofgovernmentinusetoday?
A)protectionism
B)duopoly
C)oligopoly
D)capitalism
E)oligarchy
44)Whatcountryrecentlyallowedwomentherighttovoteforthefirsttime?
A)Croatia
B)Iran
C)Bolivia
D)SaudiArabia
E)Venezuela
45)Whateventcausedadropin"economicfreedom"intheUnitedStates,accordingtotheHeritageFoundation?
A)HurricaneKatrina
B)thewarinIran
C)Obamacare
D)thebombingoftheWorldTradeTowers
E)theeconomicstimulusof2008–2009
46)________isanintensefeelingofstateprideandunity,anawakeningofacountry'speopletoprideintheircountry.
A)Nepotism
B)Absolutism
C)Fascism
D)Nationalism
E)Polarism
47)Whichactionismostlikelyamanifestationofnationalism?
A)membershipinbilateraltradetreaties
B)acalltobuyaglobalcounterpart'sproducts
C)restrictionsonimports
D)removaloftariffsandquotas
E)afocusonglobalsecurity
48)Withwhichtermwouldthephrase"BuyAmerican"bemostcloselyassociated?
A)socialism
B)communism
C)nationalism
D)abstractionism
E)polarism
49)Whatistrueofnationalism?
A)Themoreacountryfeelsthreatenedbysomeoutsideforcethelessnationalisticthecountrybecomes.
B)Acallto"buyourcountry'sproductsonly"isoneformofmanifestationofnationalfeelings.
C)Nationalistfeelingsleadtolossofcontroloverforeigninvestment.
D)Themoreacountry'sdomesticeconomydeclines,thelessnationalisticitbecomes.
E)Nationalisticfeelingsarenotprevalentineconomicallyprosperouscountries.
50)Withrespecttothepoliticalriskthatcanbefacedbyacompanyseekingtoinvestabroad,whichactionismostsevere?
A)confiscation
B)expropriation
C)domestication
D)exchangecontrols
E)local-contentlaws
51)Theseizingofacompany'sassetswithoutpaymentiscalled
A)confiscation.
B)expropriation.
C)domestication.
D)exchangecontrols.
E)local-contentlaws.
52)Whenagovernmentseizesaninvestmentofaforeigninvestorbutsomereimbursementfortheassetsismade,thegovernmentfollowsaprocesscalled
A)confiscation.
B)expropriation.
C)domestication.
D)exchangecontrols.
E)local-contentlaws.
53)Whenanexpropriatedinvestmentbecomesagovernment-runentity,itis
A)democratized.
B)domesticated.
C)nationalized.
D)prioritized.
E)socialized.
54)________occurswhenhostcountriesgraduallycausethetransferofforeigninvestmenttonationalcontrolandownershipthroughaseriesofgovernmentdecrees.
A)Confiscation
B)Expropriation
C)Domestication
D)Democratization
E)Socialization
55)ThegovernmentinChilerecentlyinformedMario'scompanythathisretailgrocerychaininChilewouldhavetobegraduallyturnedovertothepeopleofChilebytheyear2050asitisaforeigncompanyinChile.Additionally,startingthefollowingyear,50percentoftheboardofdirectorsoftheChileanoperationofthecompanymustbeChileans.WhatpoliticalriskactionisMario'scompanyfacinginChile?
A)confiscation
B)expropriation
C)domestication
D)patronization
E)nationalization
56)Whichstatementaboutdomesticationiscorrect?
A)Theultimategoalofdomesticationistoforcedomesticinvestorstosharemoreoftheprofitswiththegovernment.
B)Theriskofdomesticationappearstohavedecreasedoverthelasttwodecades.
C)Domesticationhasalwaysledtomoretechnologicallyadvancedandcompetitivebusinesses.
D)Countriesoftenrequirecompaniestobecomedomesticatedasaconditionforinvestment.
E)Domesticationreferstotheseizingofacompany'sassetswithoutpayment.
57)Marzilandfoundthatalargeamountofcapitalwasleavingthecountryduetoforeigncorporateownership,soitinstitutedcontrolsoverallmovementsofcapitaltoconservethesupplyofforeignexchange.Thesearecalled________controls.
A)exchange
B)local-content
C)price
D)tax
E)production
58)Ifthereisasubstantialamountofcapitalleavingacountry,whatisacountrymostlikelytoimplementtocontrolthesituation?
A)exchangecontrols
B)local-contentlaws
C)importrestrictions
D)taxcontrols
E)pricecontrols
59)InThailand,itisrequiredthatanymilkproductsoldinthecountrybyaforeigncompanymustusethemilkthatisatleast50percentproducedbyThaidairyfarmers.Whateconomicriskisfacedbytheinternationalproducersofmilkproductsinthissituation?
A)exchangecontrols
B)local-contentlaws
C)exportrestrictions
D)taxcontrols
E)pricecontrols
60)TheUnitedStatesrequiresthat50percentofallpartsusedtoconstructanautomobileintheUnitedStatesbemanufacturedintheUnitedStates.Asaresultofthis,whenToyotaMotorCompanybuildsautomobilemanufacturingplantsinTennesseeandOhio,itfaceseconomicrisksassociatedwith
A)exchangecontrols.
B)local-contentlaws.
C)exportrestrictions.
D)taxcontrols.
E)pricecontrols.
61)Taxesmustbeclassifiedasa(n)________riskwhenusedasameansofcontrollingforeigninvestments.
A)political
B)social
C)ignorable
D)environmental
E)harmless
62)ThegovernmentofNamibiaisstrappedforcash,andithasdecidedtotaxallforeigninvestments(suchasfoodpackagedinthecountry)byupto40percentoftheappraisedvalue.TheNamibiangovernmenthasfoundthatthisisthehandiestandquickestmeansoffindingoperatingfunds.Theeconomicriskindiscussionhereis
A)exchangecontrols.
B)local-contentlaws.
C)taxrestrictions.
D)taxcontrols.
E)pricecontrols.
63)Pricecontrolsappliedduringinflationaryperiodsmayhavetheeffectof
A)controllingthecostofliving.
B)restrictingexportstoforeigncountries.
C)negotiatingtradecontractsfavoringthehostcountry.
D)encouragingimports.
E)collectingtaxesonforeigninvestments.
64)InNorthKorea,foreigninvestorsorproducersarerequiredtosellproductsatpricesstatedbytheNorthKoreangovernmentratherthanlettingmarketvalueanddemanddeterminetheprices.Thisimpliesthatthereisapplicationof
A)exchangecontrols.
B)local-contentlaws.
C)importrestrictions.
D)taxcontrols.
E)pricecontrols.
65)Whichoftheseitemsismostlikelytobesubjectedtopricecontrol?
A)leathergarments
B)mobilephoneaccessories
C)aspirinandantacids
D)camcordersandlenses
E)ceramictiles
66)Stoppingorrefusingtotradewithanothernationforpoliticalreasonsiscalled
A)monopolizing.
B)boycotting.
C)confiscation.
D)democratization.
E)expropriation.
67)Whatistrueofpoliticalsanctions?
A)Politicalsanctionsnormallycontrolandrectifysituationswithinanation.
B)Politicalsanctionsaregenerallyunsuccessful.
C)Politicalsanctionsareillegal.
D)TheUnitedNationsencouragesboycottsasameansofsettlingpoliticaldisputes.
E)Theuseofpoliticalsanctionsisthemosteffectivewaytoincreaseworldtrade.
68)Whatareeffectivetoolsthatpoliticalandsocialactivists(PSAs)usetospreadwordabouttheircauses?
A)politicalsanctions
B)monetarybarriersandtradeembargoes
C)theInternetandcellphones
D)local-contentlawsandquestionnaires
E)exportcontrols
69)WhichoftheseorganizationsisanNGO(nongovernmentalorganization)?
A)CentralIntelligenceAgency
B)PeaceCorps
C)MillenniumChallengeCorporation
D)Oxfam
E)FedEx
70)Whydoterrorismexpertspredictmultinationalbusinesseswillbetargetedbyterroristsmorefrequently?
A)Theyimposeexportcontrolsontheunderdevelopednations.
B)TheyarethemajorcauseforpoliticalsanctionsagainstArabnations.
C)Theyarelesswelldefendedthangovernmenttargets.
D)Theydestroyandpollutetheenvironment.
E)Theyaresubterfugeforespionageagents.
71)WhichformofterrorismismostlikelytousetheInternettoinflictdamage?
A)Germterrorism
B)Bioterrorism
C)Cyberterrorism
D)Ecoterrorism
E)Narcoterrorism
72)AstheFBIinvestigatessecuritybreaches,theanalysesaremoreoftenpointingto________asthemostseriousthreat.
A)Russiangovernmentsupportedhackers
B)religiousextremists
C)whitesupremacists
D)Americanroguehackers
E)theChinesegovernment
73)Baoisattemptingtoforecastpoliticalinstabilityandhelphiscompany'smanagementidentifyandevaluatepoliticaleventsandtheirpotentialinfluenceoncurrentandfutureinternationalbusinessdecisions.Baoisengagedin
A)politicalriskassessment.
B)politicalconfiscation.
C)democratization.
D)arbitration.
E)riskexpropriation.
74)Intermsofpoliticalrisk,whatposesthegreatestthreattointernationalmarketers?
A)newerenvironmentalregulationsapprovedbyglobaltradebodies
B)changeofeconomicpolicies
C)exchangeratefluctuationsaffectingmargins
D)thepossibilityofthegovernmentactuallyfailing
E)membershiporwithdrawalofmembershipofthegovernmentintradeblocs
75)RelationsbetweengovernmentsandMNCsaregenerallypositiveiftheinvestment
A)increasesthevolumeofimports.
B)usesgloballyproducedresources.
C)transferscapital,technology,andskills.
D)bringsinahighernumberofforeignnationals.
E)decreasesthevolumeofexports.
76)MeteoraInc.isplanningtoentertheKenyanmarketbyestablishingamobilephonemanufacturingoperationinKenya.MeteoraismostlikelytohaveapositiverelationshipwithKenyangovernmentthroughitsinvestmentifit
A)useslocallyproducedresources.
B)importsphonecomponentsfromChina.
C)establishesanR&DcenterinCaliforniaandhasallitstechnologypatentedthere.
D)ensuresthatitsmiddleanduppermanagementareexpatriates.
E)bargainsforataxholidayforthenextfivefinancialyears.
77)Julietisconcernedwiththepotentialforpoliticalharassmentwhenhercompanyentersanewinternationalmarket.Toreducetheriskofpoliticalharassment,sheismostlikelytoconsiderusing________toenterthemarket.
A)externallyproducedproducts
B)asmallerinvestmentbase
C)foreigntechnology
D)ajointventure
E)thethreatofsanctions
78)Whatstrategyisusedbymultinationalcorporationstominimizepoliticalvulnerabilityandrisk?
A)expropriation
B)sanctions
C)buyouts
D)confiscation
E)licensing
79)Whichstrategycanbeeffectiveinforestallingorminimizingtheeffectofatotaltakeoverofamultinationalcorporation'sholdingsbyaforeigngovernment?
A)confiscation
B)soleproprietorship
C)expandingtheinvestmentbase
D)advertising
E)leasing
80)Whichstrategytominimizepoliticalvulnerabilityandriskhastheadvantageofengagingthepowerofseveralinvestorsandbanksinthehostcountrywheneveranykindofgovernmenttakeoverorharassmentisthreatened?
A)jointventures
B)licensing
C)expandingtheinvestmentbase
D)soleproprietorship
E)politicalbargaining
81)Whichstrategyismosteffectiveinminimizingpoliticalrisksforamultinationalcorporationinsituationsinwhichthetechnologyisuniqueandtheriskishigh?
A)tradeembargo
B)licensing
C)expandingtheinvestmentbase
D)plannedconfiscation
E)expropriation
82)Themosteffectivelong-rangesolutiontoasituationwhereaforeigngovernmentisdemandinglocalparticipationinamultinationalcorporation'sbusinessactivitiesinthehostcountryis
A)jointventures.
B)licensing.
C)expandingtheinvestmentbase.
D)planneddomestication.
E)politicalpayoffs.
83)Whileexpandingtheinvestmentbaseofacompany,whatcanbeusedasapowerfulallyindealingwiththreatsofgovernmenttakeoversorharassment?
A)banksthathavelentmoneytothehostgovernment
B)theWorldTradeOrganization
C)theInternationalLaborOrganization
D)regionaltradeblocs
E)opposingpoliticalparties
84)Anattempttolessenpoliticalrisksbypayingthoseinpowertointerveneonbehalfofthemultinationalcompanyisreferredtoasa
A)subornation.
B)protectionism.
C)politicalpayoff.
D)buyout.
E)rake-off.
85)WhatistheU.S.government'spolicytowardmultinationalcorporationsthatareconfrontedwithsituationswherebriberyisanissue?
A)Abribemaybepaidaslongasitisnotadomesticsituation.
B)Briberyisjustifiedifitisadocumentedtraditionalpracticeinacountry.
C)Abribecanbepaidinaforeigncountryifitistiedtonationalsecurity.
D)ItisillegalforaU.S.citizentopayabribe.
E)Theissuerevolvesaroundthecustomsofthecountryandeachissueisdecidedseparately.
86)WhatprincipleU.S.agencysupportsU.S.businessesabroad?
A)StateDepartmentofEntrepreneurship
B)BetterBusinessBureau
C)DepartmentofCommerce
D)DepartmentofForeignRelations
E)DepartmentofDefense
87)Withinthesamecountry,someforeignbusinessesmayfallpreytopoliticallyinducedharassment,whileothersmaybeplacedunderagovernmentumbrellaofprotectionandpreferentialtreatment.Whatfactorexplainsthisdifference?
A)thelevelofdomesticationachieved
B)thedifferencesinleveloftechnologybetweenthetwocountries
C)theculturaldifferencesbetweenthehostnationandthebusiness'shomecountry
D)theimporttariffssetbythehostcountry
E)theevaluationofacompany'scontributiontothenation'sinterest
88)Whatisthemostimportantreasonforacountrytoencourageforeigninvestment?
A)toimprovetheglobalimageofacountry
B)toacceleratethedevelopmentofaneconomy
C)toevadepoliticaltensionsbetweencountries
D)tominimizenegativepoliticalfalloutswithinthedomesticeconomy
E)toimprovetiesbetweentheinvestingcountryandthehostcountry
89)WhichagencyunderwritestradeandinvestmentsforU.S.firms?
A)Export-ImportBank
B)theFederalTradeCommission
C)theAgencyforInternationalDevelopment
D)SocialSecurityAdvisoryBoard
E)theOverseasPrivateInvestmentCorporation
90)Waldo'scompanywasexpandingintosomeunderdevelopedcountries,andneededtoacquireriskinsurancetocoverpotentialfalloutfrompoliticalunrestthatwasoccurringinthosecountries.WhatorganizationmightbeabletoprovidethisforWaldo?
A)CommodityFuturesTradingCommission(CFTC)
B)theFederalTradeCommission(FTC)
C)theSmallBusinessAdministration(SBA)
D)theUnitedStatesInternationalTradeCommission(USITC)
E)theOverseasPrivateInvestmentCorporation
91)Youliveinanationthatisconsideredtobeasovereignstate.Whatdoesthismean?
92)Discussstabilityofgovernmentsandlistthemainpoliticalcausesofinstabilityininternationalmarkets.
93)Describetheconceptofnationalismandlistsomeofthewaysitmanifests,particularlyintoday'spoliticalenvironment.
94)Discussthetermsconfiscation,expropriation,anddomestication.Chooseoneoftheseconceptsanddescribeasituationinwhichitmightoccur.
95)Listandbrieflydiscussthevariouseconomicrisksthatinternationalcompaniesmustfacewhentheyseektomarketabroad.
96)BrieflydiscusstheroleofPSAsandNGOs.
97)Discussthethreatsposedbycyberterrorismorcyberattacks.Giveanexampleofarecentoccurrenceofthese.
98)WhataretheconditionsunderwhichrelationsbetweengovernmentsandMNCsaregenerallypositive?
99)RanzanInc.hasinvestedinacountryshowingsignsthatitwillusedomesticationinthenearfuturetoforceforeigninvestorstosharemoreoftheprofitswiththegovernment.CiteanddescribeastrategytodealwiththispotentialofdomesticationthatRanzancouldfollowtoensurethatitsbusinessremainsprofitable.
Compareandcontrastthegovernmentagenciesthatareinvolvedinpromotingforeigninvestmentandinternationalbusiness.
InternationalMarketing,18e(Cateora)
Chapter6ThePoliticalEnvironment:ACriticalConcern
1)Sovereigntyisexclusivetothesupremepowersexercisedbyanationoveritsownmembers.
Answer:FALSE
Explanation:Sovereigntyreferstoboththepowersexercisedbyastateinrelationtoothercountriesandthesupremepowersexercisedoveritsownmembers.
Difficulty:1Easy
Topic:DifferencesinPoliticalSystems
LearningObjective:06-01Whatthesovereigntyofnationsmeansandhowitcanaffectthestabilityofgovernmentpolicies.
Bloom's:Remember
AACSB:AnalyticalThinking
Accessibility:KeyboardNavigation
2)Sovereigntymaybethreatenedbyforeigninvestment.
Answer:TRUE
Explanation:Foreigninvestmentcanbeperceivedasathreattosovereigntyandthusbecomearallyingcrybyopposingfactions.
Difficulty:1Easy
Topic:BenefitsandChallengesofForeignDirectInvestment
LearningObjective:06-01Whatthesovereigntyofnationsmeansandhowitcanaffectthestabilityofgovernmentpolicies.
Bloom's:Remember
AACSB:AnalyticalThinking
Accessibility:KeyboardNavigation
3)AdherencetotheWorldTradeOrganization(WTO)doesnotresultinthelossofnationalsovereignty.
Answer:FALSE
Explanation:AdherencetotheWTOinevitablymeansthelossofsomedegreeofnationalsovereigntybecausethemembernationshavepledgedtoabidebyinternationalcovenantsandarbitrationproceduresthatcanoverridenationallawsandhavefar-reachingramificationsforcitizens.
Difficulty:1Easy
Topic:TheWorldTradingSystem,GATT,andtheWTO
LearningObjective:06-01Whatthesovereigntyofnationsmeansandhowitcanaffectthestabilityofgovernmentpolicies.
Bloom's:Remember
AACSB:AnalyticalThinking
Accessibility:KeyboardNavigation
4)Foreignbusinessesnolongerneedtobeconcernedaboutthestabilityorinstabilityofprevailinggovernmentpolicies.
Answer:FALSE
Explanation:Thestabilityorinstabilityofprevailinggovernmentpoliciesisatthetopofthelistofpoliticalissuesconcerningforeignbusinesses.Governmentsmightchangeornewpoliticalpartiesmightbeelected,buttheconcernofthemultinationalcorporationisthecontinuityofthesetofrulesorcodesofbehaviorandthecontinuationoftheruleoflaw—regardlessofwhichgovernmentisinpower.
Difficulty:1Easy
Topic:TheWorldTradingSystem,GATT,andtheWTO
LearningObjective:06-01Whatthesovereigntyofnationsmeansandhowitcanaffectthestabilityofgovernmentpolicies.
Bloom's:Understand
AACSB:AnalyticalThinking
Accessibility:KeyboardNavigation
5)Pressurefromnationalistandself-interestgroupsaffectthestabilityofagovernment.
Answer:TRUE
Explanation:Radicalshiftsingovernmentphilosophywhenanopposingpoliticalpartyascendstopower,pressurefromnationalistandself-interestgroups,weakenedeconomicconditions,biasagainstforeigninvestment,orconflictsamonggovernmentsareallissuesthatcanaffectthestabilityofagovernment.
Difficulty:1Easy
Topic:DifferencesinPoliticalSystems
LearningObjective:06-01Whatthesovereigntyofnationsmeansandhowitcanaffectthestabilityofgovernmentpolicies.
Bloom's:Remember
AACSB:AnalyticalThinking
Accessibility:KeyboardNavigation
6)SaudiArabiabeganpermittingwomentovotein2015.
Answer:TRUE
Explanation:SaudiArabiaprecludedwomenfromvotinguntiltheKingpermitteditin2015.
Difficulty:1Easy
Topic:DifferencesinPoliticalSystems
LearningObjective:06-02Howdifferentgovernmentaltypes,politicalparties,nationalism,targetedfear/animosity,andtradedisputescanaffecttheenvironmentformarketinginforeigncountries.
Bloom's:Remember
AACSB:AnalyticalThinking
Accessibility:KeyboardNavigation
7)Nationalismsupportsforeignbusinessbecauseitimproveslocaleconomies.
Answer:FALSE
Explanation:Nationalismcanbestbedescribedasanintensefeelingofnationalprideandunity,anawakeningofanation'speopletoprideintheircountry.Thispridecantakeananti-foreignbusinessbias,whereminorharassmentandcontrolsofforeigninvestmentaresupported,ifnotapplauded.
Difficulty:1Easy
Topic:TheDebateConcerningGlobalandRegionalEconomicIntegration
LearningObjective:06-02Howdifferentgovernmentaltypes,politicalparties,nationalism,targetedfear/animosity,andtradedisputescanaffecttheenvironmentformarketinginforeigncountries.
Bloom's:Remember
AACSB:AnalyticalThinking
Accessibility:KeyboardNavigation
8)Nationalisticfeelingsingeneralbearnorelationtothedomesticeconomy.
Answer:FALSE
Explanation:Generally,themoreacountryfeelsthreatenedbysomeoutsideforceorthedomesticeconomydeclines,themorenationalisticitbecomesinprotectingitselfagainstintrusions.
Difficulty:1Easy
Topic:TheDebateConcerningGlobalandRegionalEconomicIntegration
LearningObjective:06-02Howdifferentgovernmentaltypes,politicalparties,nationalism,targetedfear/animosity,andtradedisputescanaffecttheenvironmentformarketinginforeigncountries.
Bloom's:
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