117. Under the Export Administration Act, a general license:
a. authorizes a business to import non-sensitive goods
b. authorizes a business to export non-sensitive goods
c. authorizes a business to export sensitive goods
d. requires an application with the Department of Commerce
e. none of the other choices
118. Under the Export Administration Act, a general license:
a. authorizes a business to import non–sensitive goods
b. authorizes a business to import sensitive goods
c. authorizes a business to export sensitive goods
d. requires an application with the Department of Commerce
e. none of the other choices
119. If you violate the export provisions of the Export Administration Act, you might face:
a. fines only
b. jail time only
c. civil or criminal penalties
d. a failure–to–consent letter
e. none of the other choices
120. Willfully violating the Export Administration Act could result in:
a. up to 50 years in prison
b. up to 20 years in prison
c. a lifetime prison sentence
d. deportation
e. loss of citizenship
121. Willfully violating the Export Administration Act could result in:
a. up to 50 years in prison
b. loss of citizenship
c. a lifetime prison sentence
d. deportation
e. none of the other choices are correct
122. A particular problem faced by software companies in international markets is:
a. excessively restrictive tariffs
b. piracy of their intellectual property
c. difficult customs procedures
d. inability to export to developing nations
e. lack of interest in the product overseas
123. A company that wants to sell products in a foreign country may:
a. export its products from its home to foreign nations
b. import its products to its home market
c. manufacture its products in foreign nations
d. export its products from its home market to foreign nations or manufacture its products in foreign nations
e. export its products from its home market to foreign nations or import its products to its home market or
manufacture its products in foreign nations
124. Which of the following is a motivation for foreign manufacturing:
a. reduced shipping costs
b. reduced labor expenses
c. reduced raw materials costs
d. securing long-term contracts in another country
e. all of the other specific choices are correct
125. If a business wants to have a bigger presence in international markets, which of the following production options
should it consider?
a. a franchise agreement
b. a joint venture
c. licensing agreement
d. a joint venture or a licensing agreement
e. a franchise agreement or a joint venture or a licensing agreement
126. In a wholly owned subsidiary, the foreign business:
a. owns at least half the operation
b. owns the whole operation
c. cannot own more than 25% of the operation
d. produces the goods in a home country and then exports them
e. none of the other choices are correct
127. When ownership is shared between foreign partners it is known as a:
a. wholly owned subsidiary
b. joint venture
c. licensing agreement
d. foreign partnership
e. joint subsidiary
128. When ownership is shared between foreign partners it is known as a:
a. wholly owned subsidiary
b. joint subsidiary
c. licensing agreement
d. foreign partnership
e. none of the other choices are correct
129. A licensing agreement involves:
a. a cooperative form of organization where local owners and foreign owners work together
b. a business arrangement where the foreign owner has complete ownership interest in the manufacturing
facilities
c. a business arrangement where the local government and the foreign owner work together
d. a contractual arrangement where one business grants another business access to its patents or other
technologies
e. a oral agreement between a local official and a foreign business where the two parties agree to share
information about the local business environment
130. Internationally, the most visible franchises are:
a. feedstock cooperatives
b. fast food restaurants
c. supermarket chains
d. gasoline stations
e. clothing stores
131. Burlite contracts to grant a French business access to its patents. The French company is responsible for producing
Burlite in France. This agreement is a:
a. licensing agreement
b. joint venture
c. wholly owned subsidiary
d. direct marketing agreement
e. none of the other choices
132. When a company arranges to have its products manufactured in a foreign plant, this is process is known as:
a. risk management
b. contract manufacturing
c. franchising
d. direct marketing
e. mixed venture manufacturing
133. Contract manufacturing occurs when:
a. a company arranges to have its products manufactured in a foreign plant
b. a company assembles its products in a country with high labor costs
c. a company sells the rights to assemble its product
d. a company sells the rights to use its brand name
e. none of the other choices are correct
134. An example of a U.S. company that makes great use of contract manufacturing is:
a. Singer Sewing Machines
b. John Deere Tractor Company
c. Universal Studios
d. Nike
e. Texas Instruments
135. The Foreign Corrupt Practices Act:
a. prohibits exporting goods that could corrupt foreigners
b. prohibits U.S. companies from bribing foreign officials
c. prohibits the import of corrupting goods, such as foreign pornography, into the U.S.
d. prohibits the payment of bribes to U.S. legislators by foreign lobbyists
e. all of the other choices
136. The Foreign Corrupt Practices Act:
a. prohibits exporting goods that could corrupt foreigners
b. prohibits the payment of bribes to U.S. legislators by foreign lobbyists
c. prohibits the import of corrupting goods, such as foreign pornography, into the U.S.
d. all of the other specific choices
e. none of the other choices
137. U.S. companies and their agents are prohibited from bribing foreign officials by the:
a. Foreign Anti-Corruption Act
b. Foreign Anti-Bribery Act
c. Foreign Corrupt Practices Act
d. Foreign Trade Corruption Prevention Act
e. Foreign Commerce Act
138. U.S. companies and their agents are prohibited from bribing foreign officials by the:
a. Foreign Anti-Corruption Act
b. Foreign Anti-Bribery Act
c. Foreign Commerce Act
d. Foreign Trade Corruption Prevention Act
e. none of the other choices are correct
139. In 2006 Congress ratified the
actions.
, which is supposed to bring international cooperation to corruption enforcement
a. United Nations Convention Against Corruption
b. United Nations Convention Against Bribery
c. International Convention Against Corrupt Business Practices
d. International No Bribe Pledge
e. International Agreement Against Corruption in Trade
140. In 2006 Congress ratified the
actions.
, which is supposed to bring international cooperation to corruption enforcement
a. International Agreement Against Corruption in Trade
b. United Nations Convention Against Bribery
c. International Convention Against Corrupt Business Practices
d. International No Bribe Pledge
e. none of the other choices are correct
141. According to a study of large trading nations by Transparency International, which country was most likely to have
firms that would pay bribes:
a. the United States
b. Canada
c. Singapore
d. Russia
e. Britain
142. Sam would like to get a contract with the government of Venezuela. To help get the contract, Sam pays Juan, a
Venezuela citizen, to use his “influence” to help. Sam knows Juan is likely to bribe the government official in charge
of the contract. Sam’s actions are:
a. legal because Juan is a private citizen
b. legal because Juan may not be controlled by U.S. law
c. illegal based on IRS regulations
d. illegal based on US anti-dumping regulations
e. illegal under the Foreign Corrupt Practices Act
143. Under the Foreign Corrupt Practices Act, bribes are allowed when:
a. the payment is necessary and routine
b. the payment is made secretly
c. the payment does not increase profits at the cost of the inhabitants of the country
d. bribes are never allowed
e. the U.S. manager is unaware of the bribe
144. Under the Foreign Corrupt Practices Act, US companies must meet which of the following requirements?
a. accounting requirements
b. bookkeeping requirements
c. internal accounting controls
d. accounting and bookkeeping requirements
e. accounting and bookkeeping requirements and internal accounting controls
145. Who is responsible for criminal enforcement of the Foreign Corrupt Practices Act:
a. the Secretary of State
b. the Secretary of Trade
c. the Department of Justice
d. the Bureau of Trade Management
e. the Supreme Court
146. Who is responsible for criminal enforcement of the Foreign Corrupt Practices Act:
a. the Secretary of State
b. the Secretary of Trade
c. the Supreme Court
d. the Bureau of Trade Management
e. none of the other choices are correct
147. If a company is found guilty of violating the Foreign Corrupt Practices Act, it may face:
a. fines of up to $2 million per violation
b. fines of up to $100,000 for its managers or officers and prison time
c. fines of up to $10,000 for its managers
d. fines of up to $2 million per violation plus fines of up to $100,000 for its managers and prison time
e. fines of up to $2 million per violation plus fines of up to $10,000 for its managers
148. In U.S. v. King, King was a major investor in OSI, which was working on a land project in Costa Rica. He was
accused by the U.S. government of violating the Foreign Corrupt Practices Act (FCPA) by bribing government
officials in Costa Rica, in an effort to make the land deal work. The U.S. courts held that King:
a. as an investor in OSI could not be prosecuted, but the company itself could be
b. did bribe the officials, but that since that is how government licenses are regularly obtained in that country, it
did not violate the FCPA
c. could not be prosecuted in the U.S. for an act that may have occurred in another nation; it would be up to the
government of Costa Rica to prosecute King
d. could be fined up to $100,000 for violating the FCPA but could not be imprisoned
e. could be sentenced to prison for violating the FCPA
149. In U.S. v. King, King was a major investor in OSI, which was working on a land project in Costa Rica. He was
accused by the U.S. government of violating the Foreign Corrupt Practices Act (FCPA) by bribing government
officials in Costa Rica, in an effort to make the land deal work. The U.S. courts held that King:
a. as an investor in OSI could not be prosecuted, but the company itself could be
b. did bribe the officials, but that since that is how government licenses are regularly obtained in that country, it
did not violate the FCPA
c. could not be prosecuted in the U.S. for an act that may have occurred in another nation; it would be up to the
government of Costa Rica to prosecute King
d. could be fined up to $100,000 for violating the FCPA but could not be imprisoned
e. none of the other choices
150. In U.S. v. King, King was a major investor in OSI, which was working on a land project in Costa Rica. He was
accused by the U.S. government of violating the Foreign Corrupt Practices Act (FCPA) by bribing government
officials in Costa Rica, in an effort to make the land deal work. The U.S. courts held that:
a. no reasonable person could have inferred that the actions undertaken by King would result in the paying of a
bribe, so he was not guilty of violating the FCPA
b. the recordings showed that King did not knowingly participate in offering bribes, so he could not be convicted
under the FCPA
c. there was not sufficient evidence that King knowingly participated in and approved of offering a bribe so he
could not be convicted under the FCPA
d. there was sufficient evidence that King knowingly participated in and approved of offering a bribe so he
could be convicted under the FCPA
e. the case was unclear and should be reevaluated by the World Trade Organization
151. In U.S. v. King, King was a major investor in OSI, which was working on a land project in Costa Rica. He was
accused by the U.S. government of violating the Foreign Corrupt Practices Act (FCPA) by bribing government
officials in Costa Rica, in an effort to make the land deal work. The U.S. courts held that:
a. no reasonable person could have inferred that the actions undertaken by King would result in the paying of a
bribe, so he was not guilty of violating the FCPA
b. the recordings showed that King did not knowingly participate in offering bribes, so he could not be convicted
under the FCPA
c. there was not sufficient evidence that King knowingly participated in and approved of offering a bribe so he
could not be convicted under the FCPA
d. the case was unclear and should be reevaluated by the World Trade Organization
e. none of the other choices are correct
152. In Japan business cards are:
a. exchanged formerly at first meeting and treated with respect
b. exchanged only after months of relationship building
c. rarely used
d. glanced at and then discarded
e. restricted to very rich people
153. The potential loss or profit that occurs between the time currency is acquired and the time it is exchanged for
another currency is known as:
a. currency change
b. currency risk
c. exchange risk
d. exchange change
e. currency management
154. The potential loss or profit that occurs between the time currency is acquired and the time it is exchanged for
another currency is known as:
a. currency change
b. currency risk
c. currency management
d. exchange change
e. none of the other choices are correct
155. In order to better manage exchange risk, companies might:
a. specify in advance payment in a stable currency
b. specify in advance the choice of language
c. choose to arbitrate disputes
d. follow the rules of the International Convention on the Sale of Goods
e. forget it; exchange risk cannot be managed
156. A letter of credit:
a. is a written instrument that orders payment of a certain sum of money to the party specified by the bill
b. is a financial document that permits the exporter to ship goods between countries without pre-customs
clearance
c. is an agreement by the bank of the buyer to pay a certain sum to the seller upon receipt of certain
documentation
d. is a government document that provides for the purchase of goods from foreign sellers on open account
e. allows a company to repatriate its foreign profits
157. A letter of credit:
a. is a written instrument that orders payment of a certain sum of money to the party specified by the bill
b. is a financial document that permits the exporter to ship goods between countries without pre-customs
clearance
c. is a financial device for repatriation of foreign profits under WTO standards
d. is a government document that provides for the purchase of goods from foreign sellers on open account
e. none of the other choices
158. An agreement or assurance by the bank of a buyer to pay a specified amount to the seller upon receipt of certain
documents that prove that the goods have been shipped and that contractual obligations of the seller have been
fulfilled is known as a(n):
a. letter of obligation
b. letter of credit
c. letter of confirmation
d. letter of payment
e. assurance of payment letter
159. An agreement or assurance by the bank of a buyer to pay a specified amount to the seller upon receipt of certain
documents that prove that the goods have been shipped and that contractual obligations of the seller have been
fulfilled is known as a(n):
a. letter of obligation
b. assurance of payment letter
c. letter of confirmation
d. letter of payment
e. none of the other choices are correct
160. Which of the following is usually part of the documentation required for payment from a buyer’s bank when a letter
of credit has been issued:
a. a certificate of origin
b. a commercial invoice
c. an export license
d. a certificate of inspection
e. all of the other choices are correct
161. Which of the following is NOT usually part of the documentation required for payment from a buyer’s bank when a
letter of credit has been issued:
a. a certificate of origin
b. a commercial invoice
c. an export license
d. proof of profit
e. all of the other choices are correct
162. Which of the following is NOT usually part of the documentation required for payment from a buyer’s bank when a
letter of credit has been issued:
a. a certificate of origin
b. a commercial invoice
c. an export license
d. a certificate of inspection
e. all of the other choices are correct
163. A(n) may be withdrawn before the specific date stated on it.
a. irrevocable letter of credit
b. revocable letter of credit
c. conditional letter of credit
d. unconditional letter of credit
e. nonbinding letter of credit
164. A(n) may be withdrawn before the specific date stated on it.
a. irrevocable letter of credit
b. nonbinding letter of credit
c. conditional letter of credit
d. unconditional letter of credit
e. none of the other choices are correct
165. A(n) may not be withdrawn.
a. irrevocable letter of credit
b. revocable letter of credit
c. conditional letter of credit
d. unconditional letter of credit
e. nonbinding letter of credit
166. A(n) may not be withdrawn.
a. nonbinding letter of credit
b. revocable letter of credit
c. conditional letter of credit
d. unconditional letter of credit
e. none of the other specific choices are correct
167. World Inc. wanted to sell sugar-free candy made by Sweets (a U.S. company) to an Italian company, Ferraro. The
goods were to be paid for by an irrevocable letter of credit issued in the name of World. The letter of credit stated
that drafts must be accompanied by a bill of lading, packing list, FDA approvals, and certificates of insurance.
Drafts were to be presented to C Bank before March 15, 2009. After shipping the candy to Ferraro, World
presented the Bank with the required documentation on March 21, 2009. The Bank should:
a. pay the draft as required by the letter of credit because it is irrevocable
b. pay the draft because all the required documentation is in order
c. pay the draft because Ferraro would be unjustly enriched if it received the goods and did not pay for them
d. not pay the draft because the letter of credit is irrevocable
e. not pay the draft because World Trading has not met its contractual obligations under the letter