Question 1

The most effective solution to a situation where a foreign government is demanding local participation in a multinational corporation's business activities in the host country is:

Accepted Answer

A)   joint ventures.
B)   licensing.
C)   expanding the investment base.
D)   planned domestication.
E)   political payoffs.F) A) and B)
G) B) and E)

Question 2

Brian is attempting to forecast political instability and help management identify and evaluate political events and their potential influence on current and future international business decisions. Brian is engaged in:

Accepted Answer

A)   political risk assessment.
B)   political securitization.
C)   democratization.
D)   risk conditioning.
E)   quantification of risk.F) All of the above
G) A) and D)

Question 3

International warfare is fast gaining popularity among nations.

Accepted Answer

A) True 
 B)False

Question 4

When a government seizes an investment of a foreign investor but some reimbursement for the assets is made, the government is following a process called:

Accepted Answer

A)   confiscation.
B)   expropriation.
C)   domestication.
D)   exchange controls.
E)   local-content laws.F) C) and E)
G) B) and D)

Question 5

Nationalism can take an anti-foreign business bias.

Accepted Answer

A) True 
 B)False

Question 6

Briefly discuss the role of PSAs and NGOs.

Accepted Answer

The impact of political and social activ...

Question 7

With which of the following would the phrase "Buy American" be most closely associated?

Accepted Answer

A)   Socialism
B)   Communism
C)   Nationalism
D)   Mercantilism
E)   PolarismF) B) and E)
G) B) and C)

Question 8

Many countries have domestication as a condition for investment.

Accepted Answer

A) True 
 B)False

Question 9

Risk of violence is not a consideration in assessing the political vulnerability of a multinational company's activities.

Accepted Answer

A) True 
 B)False

Question 10

Taxes must be classified as a _____ risk when used as a means of controlling foreign investments.

Accepted Answer

A)   political
B)   social
C)   financial
D)   environmental
E)   legalF) A) and B)
G) A) and C)

Question 11

The ideal political climate for a multinational firm is:

Accepted Answer

A)   a country where international laws do not apply.
B)   a country where favors can be purchased cheaply.
C)   a country with a stable and friendly government.
D)   a government where absolute power is a reality.
E)   an authoritarian government that can be dealt with through non-legal channels.F) None of the above
G) A) and B)

Question 12

When does an expropriated investment become a government-run entity?

Accepted Answer

A)   On democratization
B)   On domestication
C)   On nationalization
D)   On prioritization
E)   On socializationF) None of the above
G) A) and E)

Question 13

Price controls are used during inflationary periods to:

Accepted Answer

A)   control the cost of living.
B)   restrict exports to foreign countries.
C)   negotiate trade contracts favoring the host country.
D)   encourage imports.
E)   collect taxes on foreign investments.F) A) and E)
G) D) and E)

Question 14

Relations between governments and MNCs are generally positive if the investment:

Accepted Answer

A)   increases the volume of imports.
B)   uses globally produced resources.
C)   brings capital, technology, and/or skills.
D)   brings in more number of foreign nationals.
E)   outsources work back to its home country.F) B) and D)
G) None of the above

Question 15

Describe the characteristics of a sovereign state.

Accepted Answer

A sovereign state is independent and fre...

Question 16

The ancient Greeks conceived three fundamental forms of government. Which of the following refers to a government ruled by one?

Accepted Answer

A)   Aristocracy
B)   Monarchy
C)   Democracy
D)   Monopoly
E)   OligarchyF) B) and E)
G) B) and C)

Question 17

What was the goal of the April 2009 agreement arrived at by the G20 nations, which required them to cede some sovereignty?

Accepted Answer

A)   Include all G20 nations in the Security Council.
B)   Fix escalating oil prices.
C)   Increase infrastructure funding.
D)   Reject protectionism.
E)   Increase aid to South Africa.F) A) and B)
G) All of the above

Question 18

Which of the following is the principle U.S. agency that supports U.S. business abroad?

Accepted Answer

A)   State Department of Entrepreneurship
B)   Better Business Bureau
C)   Department of Commerce
D)   Department of Foreign Relations
E)   Department of DefenseF) C) and E)
G) A) and D)

Question 19

The government in Chile recently informed Clint Travis' company that his retail grocery chain in Chile would have to be gradually turned over to the people of Chile by the year 2050. Additionally, starting next year fifty percent of the board of directors of the Chilean operation of the company must be Chileans. Which of the following political risk actions is Mr. Travis' company facing in Chile?

Accepted Answer

A)   Confiscation
B)   Expropriation
C)   Domestication
D)   Patronization
E)   SocializationF) B) and D)
G) B) and C)

Question 20

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

Accepted Answer

A)   Sovereignty
B)   Self-governance
C)   Ethnocentrism
D)   Autocracy
E)   Non-interventionismF) B) and C)
G) D) and E)

Exam 6: The Political Environment: a Critical Concern

Brian is attempting to forecast political instability and help management identify and evaluate political events and their potential influence on current and future international business decisions. Brian is engaged in:

Correct Answer
verified

Price controls are used during inflationary periods to:

Correct Answer
verified

Many countries have domestication as a condition for investment.

Correct Answer
verified

When does an expropriated investment become a government-run entity?

Correct Answer
verified

With which of the following would the phrase "Buy American" be most closely associated?

Correct Answer
verified

The most effective solution to a situation where a foreign government is demanding local participation in a multinational corporation's business activities in the host country is:

Correct Answer
verified

Taxes must be classified as a _____ risk when used as a means of controlling foreign investments.

Correct Answer
verified

When a government seizes an investment of a foreign investor but some reimbursement for the assets is made, the government is following a process called:

Correct Answer
verified

Briefly discuss the role of PSAs and NGOs.

Correct Answer
verified
The impact of political and social activ...
View Answer

The ideal political climate for a multinational firm is:

Correct Answer
verified

Which of the following is the principle U.S. agency that supports U.S. business abroad?

Correct Answer
verified

The ancient Greeks conceived three fundamental forms of government. Which of the following refers to a government ruled by one?

Correct Answer
verified

What was the goal of the April 2009 agreement arrived at by the G20 nations, which required them to cede some sovereignty?

Correct Answer
verified

Correct Answer
verified

Risk of violence is not a consideration in assessing the political vulnerability of a multinational company's activities.

Correct Answer
verified

Relations between governments and MNCs are generally positive if the investment:

Correct Answer
verified

Nationalism can take an anti-foreign business bias.

Correct Answer
verified

Describe the characteristics of a sovereign state.

Correct Answer
verified
A sovereign state is independent and fre...
View Answer

International warfare is fast gaining popularity among nations.

Correct Answer
verified

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

Correct Answer
verified

Exam 6: The Political Environment: a Critical Concern

Brian is attempting to forecast political instability and help management identify and evaluate political events and their potential influence on current and future international business decisions. Brian is engaged in:

Correct AnswerverifiedShow Answer

Price controls are used during inflationary periods to:

Correct AnswerverifiedShow Answer

Many countries have domestication as a condition for investment.

Correct AnswerverifiedShow Answer

When does an expropriated investment become a government-run entity?

Correct AnswerverifiedShow Answer

With which of the following would the phrase "Buy American" be most closely associated?

Correct AnswerverifiedShow Answer

The most effective solution to a situation where a foreign government is demanding local participation in a multinational corporation's business activities in the host country is:

Correct AnswerverifiedShow Answer

Taxes must be classified as a _____ risk when used as a means of controlling foreign investments.

Correct AnswerverifiedShow Answer

When a government seizes an investment of a foreign investor but some reimbursement for the assets is made, the government is following a process called:

Correct AnswerverifiedShow Answer

Briefly discuss the role of PSAs and NGOs.

Correct AnswerverifiedThe impact of political and social activ...View AnswerShow Answer

The ideal political climate for a multinational firm is:

Correct AnswerverifiedShow Answer

Which of the following is the principle U.S. agency that supports U.S. business abroad?

Correct AnswerverifiedShow Answer

The ancient Greeks conceived three fundamental forms of government. Which of the following refers to a government ruled by one?

Correct AnswerverifiedShow Answer

What was the goal of the April 2009 agreement arrived at by the G20 nations, which required them to cede some sovereignty?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Risk of violence is not a consideration in assessing the political vulnerability of a multinational company's activities.

Correct AnswerverifiedShow Answer

Relations between governments and MNCs are generally positive if the investment:

Correct AnswerverifiedShow Answer

Nationalism can take an anti-foreign business bias.

Correct AnswerverifiedShow Answer

Describe the characteristics of a sovereign state.

Correct AnswerverifiedA sovereign state is independent and fre...View AnswerShow Answer

International warfare is fast gaining popularity among nations.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The impact of political and social activ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A sovereign state is independent and fre...
View Answer

Correct Answer
verified

Correct Answer
verified