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64. The most visible U.S. franchises in the international market are gasoline stations.
a. True
b. False
65. Contract manufacturing involves a contractual arrangement where one business grants another business access to
its patents and other technologies.
a. True
b. False
66. A major drawback to contract manufacturing compared to other forms of international operations is that it usually
involves a high level of capital investment.
a. True
b. False
67. A U.S. manufacturing firm that has made significant use of contract manufacturing is the Nike shoe company.
a. True
b. False
68. A U.S. manufacturing firm that has made significant use of franchising in foreign markets is the Nike shoe
company.
a. True
b. False
69. The Foreign Corrupt Practices Act prohibits companies from importing foreign goods that might corrupt the morals
of Americans.
a. True
b. False
70. Under the Foreign Corrupt Practices Act it is illegal for an agent of a business to bribe a foreign government
official.
a. True
b. False
71. The U.S. is estimated to be one of the top two or three least corrupt countries in the world.
a. True
b. False
72. The United Nations Convention Against Corruption was rejected by Congress as inferior to the Foreign Corrupt
Practices Act.
a. True
b. False
73. The United Nations Convention Against Corruption has been widely adopted around the world and appears to have
a very high level of enforcement.
a. True
b. False
74. Afghanistan is rated one of the most corrupt nations in the world.
a. True
b. False
75. The United States is rated the least corrupt country in the world.
a. True
b. False
76. Denmark is rated the least corrupt nation in the world.
a. True
b. False
77. The Foreign Corrupt Practices Act allows U.S. firms in other nations to make bribes of foreign officials needed to
get paperwork or other routine matters approved.
a. True
b. False
78. The most controversial aspect of the Foreign Corrupt Practices Act is the bookkeeping requirement.
a. True
b. False
79. The most controversial aspect of the Foreign Corrupt Practices Act is the "knowing" requirement.
a. True
b. False
80. The FCPA requires all companies to create internal accounting controls that will provide reasonable assurances
that company transactions are authorized and that company assets are traceable.
a. True
b. False
81. If a company is found guilty of violating the FCPA it may be subject to a maximum fine of $100,000.
a. True
b. False
82. In U.S. v. King, where King was accused of bribing officials of a foreign government, the court held that U.S. law
did not apply to bribes that were made out of the country.
a. True
b. False
83. In U.S. v. King, where King was accused of bribing officials of a foreign government, the court held that he could
be fined and sent to prison.
a. True
b. False
84. In U.S. v. King, where King was accused of bribing officials of a foreign government, the court held that King was
not personally liable as he acted on behalf of a company. The company could be liable for breaking the Foreign
Corrupt Practices Act.
a. True
b. False
85. Because contract law is much the same throughout the world, contracting practices are much the same, often
differing only in language and terms of payment.
a. True
b. False
86. In some countries businesses develop long-term business relationships with clients only after lengthy initial
negotiations.
a. True
b. False
87. One way to reduce the risk of currency fluctuation is to specify ahead of time that payment should be made in a
stable, trustworthy currency.
a. True
b. False
88. International contracts often require letters of credit to facilitate payment for the goods subject to the contract.
a. True
b. False
89. International contracts often require certificates of deposit to facilitate payment for the goods subject to the
contract.
a. True
b. False
90. A letter of credit is a demand to pay that the buyer makes on the seller's bank.
a. True
b. False
91. In letter of credit transactions, the seller gives the goods to the buyer and the buyer then pays the seller's bank to
retire a loan (the letter of credit) taken out by the seller to cover the production costs of the goods.
a. True
b. False
92. Letters of credit may be either revocable or irrevocable.
a. True
b. False
93. International law prohibits countries from refusing to allow repatriation of funds earned by foreigners.
a. True
b. False
94. Some countries make it hard for foreign businesses to get money earned in their markets out of the country.
a. True
b. False
95. Transfer pricing is used by companies for internal international transactions.
a. True
b. False
96. Transfer pricing within companies must be shown to be based on market prices.
a. True
b. False
97. Transfer pricing within companies can greatly affect national tax bills.
a. True
b. False
98. Payment clauses are used to deal with problems of inflation and currency exchange rates.
a. True
b. False
99. Parties to an international contract may not specify an official language that will be used to interpret the contract as
international law requires official versions be in the languages of both parties to the trade.
a. True
b. False
100. A force majeure clause in an international contract provides for the method of payment in the event of an
unexpected event that adversely affects performance.
a. True
b. False
101. A force majeure clause protects parties to a contract from being responsible for things outside of their control, such
as a war or natural disaster that prevents performance.
a. True
b. False
102. A force majeure clause protects parties to a contract from being responsible for a rapid change in the value of a
currency in an international contract.
a. True
b. False
103. A forum selection clause allows the parties to a contract to specify where they wish to litigate a dispute over the
contract, should one arise.
a. True
b. False
104. The standard forum selection clause in international business contracts specifies that in the event of a dispute the
matter will be settled at the United Nations Commission on Trade.
a. True
b. False
105. Some choice-of-law and forum selection clauses used in international contracts have been held to violate the
Commerce Clause of the U.S. Constitution.
a. True
b. False
106. Nationalization occurs when a government takes control of the investment of a foreigner.
a. True
b. False
107. When a country expropriates property, it generally violates international law.
a. True
b. False
108. Unlawful takings of property by foreign governments are called confiscations.
a. True
b. False
109. In the U.S., there are no groups that insure investors against the risk of loss⎯these risks are too great.
a. True
b. False
110. In the U.S., the Overseas Private Investment Corporation helps insure investors against some risks of loss in
investments in less-developed countries.
a. True
b. False
111. Although insurance is generally available for transportation, fire, theft, and other similar risks it is not available for
such risks as nationalization.
a. True
b. False
112. Individuals and businesses in countries that are "part of the world community" have standing to go before the
International Court of Justice at The Hague, Netherlands.
a. True
b. False
113. Decisions of the International Court of Justice for monetary judgments or injunctive relief may be referred to the
United Nations Security Council for enforcement.
a. True
b. False
114. Because of the greater certainty involved, judicial litigation is preferred for resolving disputes in international
transactions.
a. True
b. False
115. Arbitration is rarely used in international business disputes because most foreign courts will not enforce arbitration
decisions.
a. True
b. False
116. The doctrine of sovereign immunity requires a court to give up its jurisdiction over foreign countries in some
instances.
a. True
b. False
117. The doctrine of sovereign immunity bars compensation for foreign investors who have sustained losses in host
countries.
a. True
b. False
118. Under the Foreign Sovereign Immunities Act of 1976, a foreign sovereign may not be immune from the jurisdiction
of another nation's courts if the acts of the sovereign that form the basis of the suit are commercial in nature.
a. True
b. False
119. Australian immigration policy encourages immigration by highly educated people.
a. True
b. False
120. Australia seeks immigrants who embrace "Australian values."
a. True
b. False
121. Australian immigration policy explicitly discriminates against Asian people.
a. True
b. False
