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True / False
1. The management of international business risks involves considerations of currency exchange and of differences in
legal systems.
a. True
b. False
2. International business transactions involve risks that are financial, political, and regulatory.
a. True
b. False
3. International business does not generally involve greater difficulties than operating a domestic business.
a. True
b. False
4. In the Middle Ages, the private international law of commercial transactions was known as the lex populi.
a. True
b. False
5. Legal rules governing international business transactions were developed for the first time in the late 1800s.
a. True
b. False
6. The main sources of international trade law are the laws of the individual countries, the laws embodied in trade
agreements, and the rules enacted by trade organizations.
a. True
b. False
7. There is a well-developed system of international courts used to settle international commercial disputes.
a. True
b. False
8. The United Nations is the main source of international courts used to settle international commercial disputes.
a. True
b. False
9. The United Nations is the main source of international trade law used in global commerce.
a. True
b. False
10. NAFTA is a free trade agreement between the U.S., Canada, and Great Britain.
a. True
b. False
11. Most tariffs between the countries that belong to NAFTA were supposed to be eliminated by 2009.
a. True
b. False
12. The GATT organization was renamed the International Trade Organization.
a. True
b. False
13. If a member country of the World Trade Organization claims another country has violated WTO rules, the issue
will be investigated by a three-member arbitral panel.
a. True
b. False
14. WTO member countries agreed to completely eliminate tariffs on beer, steel, farm equipment, furniture, and toys.
a. True
b. False
15. The World Trade Organization works to bring together producers and customers from different countries by
running large "trade shows" around the world.
a. True
b. False
16. Major areas in which WTO members could not agree to reduce trade barriers are the film and music industries.
a. True
b. False
17. A tariff is a duty or tax most commonly imposed by a government on exported goods.
a. True
b. False
18. Tariff imposed on imports must be paid before the goods officially enter the country.
a. True
b. False
19. A "specific tariff" involves a tax based on a percentage of the price of the product.
a. True
b. False
20. A "specific tariff" is a lump-sum or fixed amount tax applied to a product.
a. True
b. False
21. An "ad valorem tariff" is based on a percentage price of a product.
a. True
b. False
22. An "ad valorem tariff" is a lump-sum or fixed amount tax applied to a product.
a. True
b. False
23. Most business disputes in the tariffs area arise over the classification of products under the tariff schedules.
a. True
b. False
24. The Supreme Court has noted that the Customs officials who assign tariff classes to imported goods must be given
deference by the courts in how Customs interprets the law of tariffs.
a. True
b. False
25. The U.S. replaced its tariff classifications with the Harmonized Tariff Schedule, a uniform system of goods
classification used by custom officials worldwide.
a. True
b. False
26. In U.S. v. Mead Corp. the Supreme Court held that Customs classifications of products are due Chevron
deference when challenged.
a. True
b. False
27. In U.S. v. Mead Corp. the Supreme Court held that Customs classifications of products are best treated like
interpretations of policy statements.
a. True
b. False
28. The government publishes duties and taxes it imposes on imported products in the Federal Register for importers
to check to see the relevant tariff.
a. True
b. False
29. Products made from endangered species are prohibited from being imported into the U.S. for sale.
a. True
b. False
30. Products may be completely banned from importation into the U.S. if they hurt national security.
a. True
b. False
31. Foreign automobiles that do not meet U.S. auto safety and pollution regulations may not be imported into this
country.
a. True
b. False
32. The International Trade Commission may restrict imports to help foreign companies better compete in U.S.
markets.
a. True
b. False
33. Dumping occurs when a company sells its products for less money in a foreign market than it charges for those
same goods in its home market.
a. True
b. False
34. U.S. producers have the right to go to the International Trade Commission to request a tax be imposed on products
from foreign countries that it claims are being subsidized by a foreign government in production.
a. True
b. False
35. The International Trade Commission may impose an antidumping duty on goods imported to the U.S. that are being
sold for less than the price charged in the home market.
a. True
b. False
36. The International Trade Commission may impose an antidumping duty on goods imported to the U.S. that are being
sold for less than the price charged in the home market. By law, the duty is to be triple the cost difference.
a. True
b. False
37. Antidumping orders issued by the International Trade Commission usually concern a restriction on goods being
"dumped" into the U.S. market for free.
a. True
b. False
38. The Department of Commerce may investigate to see if a foreign government is providing a subsidy to their
producers that allows the good to be sold for less than its real cost of production. If so, a tax may be imposed on the
imported good.
a. True
b. False
39. If a foreign company is guilty of dumping its products in the U.S., the International Trade Commission can impose
taxes on the good being brought into the country.
a. True
b. False
40. A foreign trade zone is where businesses can import goods for processing, assembly, or warehousing, without
paying duties until the finished products are sent to the market.
a. True
b. False
41. Foreign trade zones are ports of entry that assess special duties or tariffs on products entering them that are less
than the duties imposed on general trade zones.
a. True
b. False
42. Foreign trade zones are ports in a country where any products may be imported and sold without any taxes that
would otherwise apply to imports.
a. True
b. False
43. Duty-free ports are ports of entry that assess special duties or tariffs on products entering them that are less than
the duties imposed on general trade zones.
a. True
b. False
44. Duty-free ports where no tariffs are charged for imported goods do not exist.
a. True
b. False
45. When the value of a country's exports exceeds the value of its imports, the country runs a trade deficit.
a. True
b. False
46. The International Trade Administration is the major export promotion agency of the U.S. government.
a. True
b. False
47. The International Trade Administration helps U.S. companies market their products in foreign countries.
a. True
b. False
48. The Export Administration Act is primarily concerned with controlling the export of endangered species the U.S.
a. True
b. False
49. Under the Export Administration Act, there may be no restriction on the exporting of goods from the U.S. to other
countries.
a. True
b. False
50. If a good exported from the U.S. is on the Commodity Control List, it will require an export license from the
Department of Commerce before it is sold and shipped.
a. True
b. False
51. The Department of Commerce maintains a Commodity Control List that states what goods are restricted in sales to
other nations.
a. True
b. False
52. The Department of Commerce maintains a Restricted Export Security List (RESL) that states what goods are
restricted in sales to other nations.
a. True
b. False
53. The sale of restricted goods, such as military equipment, applies to sales from the U.S. to other nations, but cannot
control resale of the goods once outside of the U.S.
a. True
b. False
54. A person who knowingly violates the licensing procedures for exporting goods may be imprisoned.
a. True
b. False
55. A significant problem facing software companies is international piracy of their products.
a. True
b. False
56. The two basic ways of selling products in foreign markets are to export products to the country or manufacture
products in the country for distribution there.
a. True
b. False
57. Japanese firms moved manufacturing facilities to the U.S. in fear that Congress would impose high tariffs on
products made in Japan.
a. True
b. False
58. In contrast to the wholly owned subsidiary, a joint venture may involve a loss of managerial control.
a. True
b. False
59. Most countries prefer to have wholly-owned subsidiary plants in the country rather than joint ventures.
a. True
b. False
60. Many companies prefer joint ventures rather than wholly-owned subsidiaries in other countries because the joint
venture gives the parent company more control.
a. True
b. False
61. A licensing agreement is a contractual arrangement where one business grants another business access to its
patents and other technologies.
a. True
b. False
62. A problem with a licensing agreement can be the loss of patents and other technologies.
a. True
b. False
63. A franchise is a form of a licensing agreement.
a. True
b. False
