1. “National Treatment” prohibits WTO members from discriminating against imported products in favor of “like
products” produced domestically.
a.
True
b.
False
2. The principle of equity is unique to civil law legal systems.
a.
True
b.
False
False
1
Moderate
24–1a Common Law
3. Civil law systems are based on British law.
a.
True
b.
False
False
1
Easy
24–1b Civil Law
4. The traditional Islamic rules and laws that regulate Muslim life are called Sharia.
a.
True
b.
False
True
1
Easy
5. Customary practice arises from legislative action.
True
1
Moderate
24–9a Basic Principles of the WTO
a.
True
b.
False
6. Civil law systems are found in areas besides Europe.
a.
True
b.
False
True
1
Moderate
24–1b Civil Law
7. Under Islamic law, “Zakat” is the allocation of certain taxes to deprived and poor people as a welfare contribution.
a.
True
b.
False
True
1
Moderate
24–1c Other Families of Law
8. U.S. trade laws are enacted by the Congress pursuant to the treaty power of the U.S. Constitution.
a.
True
b.
False
False
1
Moderate
24-7 U.S. Trade Regime
9. When disputes arise, most western European countries use the “American rule” whereby each party, win or lose,
generally pays its own attorney fees.
a.
True
False
1
Moderate
24–2b Customary International Law
b.
False
10. A preference given by a country to domestic products in government procurement is a type of nontariff barrier to
trade.
a.
True
b.
False
True
1
Moderate
24–7f Laws Affecting Imports into the United States
11. Countries are prohibited by international law from regulating the percentage of foreign ownership of businesses that
are incorporated within their borders.
a.
True
b.
False
12. Codification is a process by which existing common law positions are restated and laid down in a statute.
a.
True
b.
False
True
1
Moderate
24–1a Common Law
13. The Department of State administers embargoes imposed on U.S. trade with countries such as Iraq, Cuba, and North
Korea.
False
1
Moderate
24–15c Recovery of Attorney’s Fees
a.
True
b.
False
14. In CASE 24.2 Medellin v. Texas (2008), in ruling against the defendant, the U.S. Supreme Court considered the
question of whether the decisions of the International Court of Justice that flowed from two international treaties were
binding on the state of Texas.
a.
True
b.
False
True
1
Challenging
24–2a Treaties
15. Tariffs are a means by which imports may be limited.
a.
True
b.
False
True
1
Moderate
24–7f Laws Affecting Imports into the United States
16. The antidumping law is the most frequently used U.S. import-relief law.
a.
True
b.
False
True
1
Moderate
17. Section 301 of the Trade Act of 1974 is the principal U.S. statute addressing unfair foreign practices affecting U.S.
False
1
Moderate
24–7c Role of Administrative Agencies
exports of goods or services.
a.
True
b.
False
18. The transfer of technical data to a foreign citizen while present in the U.S. is generally not considered to be an export.
a.
True
b.
False
False
1
Moderate
24–7d Laws Affecting Exports
19. A political union represents the agreement of countries regarding constitutional systems.
a.
True
b.
False
False
1
Moderate
24–10 Regional Economic Integration
20. In India, Hindu law is applied to most commercial transactions.
a.
True
b.
False
False
1
Moderate
24–1c Other Families of Law
21. Some countries require employers to fund employee benefits that are not expected in the U.S.
a.
True
True
1
Moderate
24–7f Laws Affecting Imports into the United States
b.
False
22. Choice-of-law provisions in a contract seek to avoid later disputes over which law applies.
a.
True
b.
False
True
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24-15d Choice of Law and Choice of Forum
Blooms: Comprehension
23. __________ law legal systems primarily rely on case law and precedents.
a.
Common
b.
Civil
c.
Statutory
d.
Codified
a
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24–1a Common Law
Blooms: Comprehension
24. All member states of the European Union apply a single set of tariffs, called the __________ tariff, on goods imported
from outside the European Union
a.
accepted use
b.
mandated application
c.
common customs
d.
European exaction
c
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24–11 The European Union
Blooms: Comprehension
True
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24-14d Noncommercial Issues
Blooms: Comprehension
25. If a country exerts nationalization over a company’s assets and does not provide compensation, __________ has
occurred.
a.
expropriation
b.
privatization
c.
extraterritoriality
d.
confiscation
26. Through the process of __________, a nation that was not an original party to a treaty can elect to participate in a
treaty at a later time.
a.
ratification
b.
accession
c.
signing
d.
approval
b
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24–2a Treaties
Blooms: Comprehension
27. The process by which property ownership is transferred from a nation to a private entity is called:
a.
privatization.
b.
nationalization.
c.
appropriation.
d.
a transfer.
a
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24–3a Constraints on Foreign Ownership
Blooms: Comprehension
28. __________ is the process by which a country asserts a right to regulate activities that occur beyond its borders.
a.
Internationalization
b.
Nationalization
c.
Extraterritoriality
d
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
23–3a Constraints on Foreign Ownership
Blooms: Comprehension
d.
Appropriation
29. The __________ collects U.S. tariffs in this country.
a.
U.S. Customs and Border Protection
b.
Department of Commerce
c.
International Trade Commission
d.
U.S. Trade Representative
a
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
24–7c Role of Administrative Agencies
Blooms: Comprehension
30. __________ tariffs require the importer to pay a percentage of the value of the imported merchandise.
a.
Ad valorem
b.
Ad hoc
c.
Harmonized
d.
Customs valuation
a
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
24–7f Laws Affecting Imports into the United States
Blooms: Comprehension
31. In the United States, the value of an article for customs purposes is normally the __________ value, which is the price
indicated on the sales invoice.
a.
customs
b.
transaction
c.
domestic
d.
international
b
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
c
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24–3c Extraterritorial Application of National Laws
Blooms: Comprehension
32. The __________ is a program developed by the industrialized countries to assist developing nations by improving
their ability to export.
a.
World Trade Organization
b.
Developing Nations Schedule
c.
Harmonized Tariff Schedule
d.
Generalized System of Preferences
d
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24–9a Basic Principles of the WTO
Blooms: Comprehension
33. In CASE 24.1 Awad v. Ziriax (2012), Oklahoma passed the “Save Our State Amendment” which provided that
Oklahoma courts could not consider international or Sharia law in making decisions. Awad, a muslim, was the executive
director of the state chapter of the Council on American-Islamic Relations and sued. How did the court rule and why?
a.
The court dismissed Awad’s lawsuit, holding that the First Amendment’s Free Exercise clause does not apply
to Muslims.
b.
The court dismissed Awad’s lawsuit, holding that he had no standing to challenge the law.
c.
The court ruled for Awad, holding that the amendment violated Awad’s First Amendment Right to Free
Exercise of Religion was violated.
d.
The court ruled for Awad, holding that Awad’s right to Due Process and Equal Protection was denied by the
amendment.
c
1
Challenging
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24–1c Other Families of Law
Blooms: Analysis
34. Exports are controlled by means of export:
a.
duties.
b.
licenses.
c.
subsidies.
d.
customs valuations.
b
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
24-7 U.S. Trade Regime
BLooms: Comprehension
24–7f Laws Affecting Imports into the United States
Blooms: Comprehension
35. A product is __________ when it is sold abroad below the current selling price in the exporter’s home market or below
the exporter’s cost of production.
a.
subsidized
b.
dumped
c.
underpriced
d.
undervalued
36. The __________ was created to provide financing for the purchase of U.S. exports.
a.
World Bank
b.
U.S. Bank
c.
Export-Import Bank of the U.S.
d.
U.S. Trade Association
c
1
Moderate
United States – BUSPROG: – ANALYTIC
24–7c Role of Administrative Agencies
Blooms: Comprehension
37. __________ is the principal U.S. statute addressing unfair foreign practices affecting U.S. exports of goods or
services.
a.
Section 301 of the Trade Act of 1974
b.
Section 502 of the Trade Act of 1990
c.
The Unfair Export Limits Act
d.
The International Control Act
a
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24–7e Laws Related to Unfair Foreign Trade Practices Affecting U.S. Exports
Blooms: Comprehension
38. In a series of laws, known collectively as the __________ laws, Congress has authorized the President to raise U.S.
tariffs on specified products and to provide other forms of import protection to U.S. businesses.
a.
export-relief
b.
domestic-relief
b
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
24–7f Laws Affecting Imports into the United States
Blooms: Comprehension
c.
import-relief
d.
international-relief
39. The __________ provides for temporary relief to domestic industries seriously injured by increasing imports,
regardless of whether unfair practices are involved.
a.
fair trade law
b.
import-relief law
c.
duty free zone
d.
foreign trade zone
a
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24–7f Laws Affecting Imports into the United States
Blooms: Comprehension
40. Under GATT’s principle of __________ tariffs, each time tariffs are reduced, they may not be raised again without
compensation to other World Trade Organization members.
a.
absolute
b.
based
c.
bound
d.
nationalized
c
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24–9a Basic Principles of the WTO
Blooms: COmprehension
41. The North American Free Trade Agreement provides for elimination of barriers to trade between what countries?
a.
The United States, Canada, and Mexico.
b.
The United States, Canada, Mexico, and Brazil.
c.
The United States and all South American countries.
d.
The United States and Mexico only.
a
1
Moderate
c
1
Moderate
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
24–7f Laws Affecting Imports into the United States
Blooms: Comprehension
42. The European Commission is the __________ of the European Union.
a.
executive branch
b.
legislative branch
c.
administrative agency
d.
police arm
a
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24–11a Principal EU Institutions
Blooms: Knowledge
43. A __________ is created when a group of states reduce or eliminate tariffs between themselves but maintain their own
individual tariffs as to other states.
a.
free trade area
b.
Caribbean basin initiative
c.
customs union
d.
most favored nation
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24–8a Regional International Trade Regimes
Blooms: Knowledge
44. The Council of Ministers is the legislative body of:
a.
NAFTA.
b.
GATT.
c.
the Treaty of Rome.
d.
the European Union.
d
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24–11a Principal EU Institutions
Blooms: Comprehension
45. The members of the European Parliament are elected by the __________ of the member states.
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24–8a North American Free Trade Agreement
Blooms: Comprehension
a.
legislative branch
b.
executive branch
c.
citizens
d.
Council of Ministers
46. In CASE 24.3 Kiobel v. Royal Dutch Petroleum Co. (2013) defendants, who had engaged in oil exploration
and drilling in the Ogoni region of Nigeria for decades, were sued by the Ogoni indigenous peoples. The
issue before the U.S. Supreme Court was whether the __________ extended to corporations that aid and abet
human rights violations as a matter of customary international law.
a.
Common Law
b.
World Trade Organization.
c.
Foreign Corrupt Practices Act.
d.
Alien Tort Statute
d
1
Challenging
United States – BUSPROG: – ANALYTIC
24–2b Customary International Law
Blooms: Analysis
47. The process in which existing common law positions are restated and laid down in a statute is referred to as:
a.
conciliation.
b.
codification.
c.
directive encoding.
d.
sectioning.
b
1
Easy
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
24–1a Common Law
Blooms: Knowledge
48. A(n) __________ has features of a customs union but goes a step further by eliminating barriers that restrict the
movement of labor, capital, and technology among member nations.
a.
valuation market.
b.
common market.
c.
import relief consortium.
c
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24–11a Principal EU Institutions
Blooms: Comprehension
d.
nontarrif consortium.
49. When internationally accepted arbitration rules are used in conjunction with the parties’ own methods of selecting an
arbitration panel, it is known as a(n) __________ arbitration.
a.
multinational
b.
neutral
c.
ad hoc
d.
private
c
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24-15d Choice of Law and Choice of Forum
Blooms: Comprehension
50. If a country exerts nationalization over a company’s assets provides compensation, __________ has occurred.
a.
expropriation
b.
privatization
c.
extraterritoriality
d.
confiscation
a
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24–3a Constraints on Foreign Ownership
Blooms: Knowledge
51. Which of the following is a legal principle of international law under which nations submit their decision-making
authority to a common organization or institution?
a.
Private international law
b.
Supranational law
c.
The international naturalized agreement
d.
The foreign resolution principle
1
Moderate
United States – BUSPROG: – ANALYTIC
b
1
Easy
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24–1a Common Law
Blooms: Knowledge
52. One simple way of addressing foreign tax risks is a(n) __________, whereby the local licensee is obligated to pay all
taxes other than those specifically allocated to the foreign partner.
a.
gross-up clause
b.
tax shift clause
c.
local commitment clause
d.
overseas investment clause
a
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
53. The principle that each World Trade Organization member must accord to all other member countries tariff treatment
no less favorable than it provides to any other country is known as the __________ principle.
a.
most favored nation
b.
preference
c.
bound nation protection
d.
product enhancement
a
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24–9a Basic Principles of the WTO
Blooms: Comprehension
54. __________ is a process used mainly in the area of public international law whereby a third party, often a
disinterested government, brings the parties together by establishing communication and providing a site where the parties
can meet, often in secret.
a.
Public involvement
b.
Good offices
c.
International involvement
d.
Best transactions
b
1
Moderate
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24–15a Dispute Resolution Mechanisms
BLooms: Comprehension
55. The __________ was most clearly expressed in the Underhill v. Hernandez case referenced in the text, when the court
stated that “the courts of one country will not sit in judgment on the acts of the government of another, done within its
DISC: – AICPA: BB-Legal
24-2 Sources of International Law
Blooms: Comprehension
own territory.”
a.
Act–of-State Doctrine
b.
Foreign Sovereign Immunities Act
c.
Doctrine of Comity.
d.
Doctrine of Forum Non Conveniens
56. The __________ Act prohibits any payment by a company, its employees, or its agents directly or indirectly to a
foreign government official for the purpose of improperly influencing government decisions, unless the payment is a
__________ to a ‘low ranking’ official to expedite non discretionary granting of a permit or license.
a.
Export Control Reform Initiative, facilitating payment
b.
Office of Economic Cooperation and Development, facilitating payment
c.
Foreign Corrupt Practices, facilitating payment
d.
1934 Securities Exchange Act, non-facilitating payment.
c
1
Challenging
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24-5 Foreign Corrupt Practices Act and Other Bribery Bans
Blooms: Analysis
57. Amanda was just hired to work for a federal agency in the procurement department. Amanda shops for the best buys
possible and thinks she has found a great deal. She returns to her office and tells her supervisor about her discovery. Her
boss tells her to be sure that the Buy American Act is satisfied. Amanda decides to research the law. What will she find?
a.
That under all circumstances federal agencies must purchase products that are 100% made in the U.S.A.
b.
That under all circumstances federal agencies must purchase products with at least 75% of the components
made in the U.S.A.
c.
That unless the price is a certain percentage higher than the price of the equivalent foreign product, federal
agencies must buy products with at least 50% of the components made in the U.S.A.
d.
That federal agencies may buy foreign made products so long as it can be established that a representative did
comparison shopping and established that the foreign made good is a better deal than the made in the U.S.A.
product.
c
1
Challenging
United States – BUSBROG: – Analytic
DISC: – AICPA: BB-Legal
24–7a Laws Affecting Imports into the United States
Blooms: Analysis
a
Challenging
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24-15g Suing Foreign Governments
Blooms: Comprehension
58. __________ can include boycotts of goods, refusal to maintain commercial relationships, and quotas.
a.
Economic sanctions
b.
Embargoes
c.
Tariffs
d.
Dumping
59. In CASE 24.4 Carijano v. Occidental Petroleum Corp. (2011), the Achuar tribe of Peru sued Occidental Petroleum in
a Los Angeles, California state court, alleging environmental contamination and release of hazardous waste into the rain
forests in Peru where the Achuar people live. Occidental moved to dismiss the claim on the grounds of:
a.
Sovereign Immunity.
b.
the Choice of Law.
c.
Forum Non Conveniens.
d.
the Act–of-State Doctrine.
c
1
Challenging
NATIONAL STANDARDS:
United States – BUSPROG: – ANALYTIC
ACCREDITING STANDARDS:
DISC: – AICPA: BB-Legal
24–15f Forum Non Conveniens
Blooms: Comprehension
60. Senator Smith is tired of all the imports of televisions coming into this country. He proposes a bill by which all
foreign-made televisions will be taxed an additional $100 before being allowed into the country. He receives a great deal
of support for his bill, but one senator questions whether such an arrangement is illegal since it will discriminate against
imported goods. Which of the following is correct?
a.
There is no problem with the additional tax because the U.S. is a sovereign nation.
b.
There is no problem with the tax so long as it can be shown that American jobs are being lost due to the
number of televisions being imported.
c.
Under the principle of national treatment, the U.S., as a member of the World Trade Organization, may not
discriminate against imported goods and may not apply the tax unless it is also applied equally to domestic
products.
d.
The tax may not be imposed under the Uniform Trade Initiative.
c
1
Challenging
NATIONAL STANDARDS:
United States – BUSPROG: – ANALYTIC
ACCREDITING STANDARDS:
DISC: – AICPA: BB-Legal
24–9a Basic Principles of the WTO
Blooms: Analysis
a
Challenging
NATIONAL STANDARDS:
United States – BUSPROG: – ANALYTIC
ACCREDITING STANDARDS:
DISC: – AICPA: BB-Legal
24–3b National Laws Directed at International Business Activities
Blooms: Comprehension
61. Allison, a dress designer, believes that she has a great deal with a company in Ireland, called Fashion, which has
agreed to purchase a number of her dresses. The manager of Fashion, however, insists on delivery of the dresses before
payment will be provided. Which of the following would be a good idea for Allison?
a.
Allison should insist on a documentary letter of credit provided by an issuing bank promising payment upon
proof of delivery of the dresses.
b.
Allison should insist on a letter of credit issued by the buyer promising payment upon delivery of the dresses.
c.
Allison should personally deliver the dresses so that she can demand payment while there.
d.
Allison should turn down the deal because it is too risky.
62. Jackson owns a business in a foreign country that is considered “friendly” with the U.S. but which has significant
political unrest. Jackson is uneasy about the situation in the country. He is concerned that his business could be the subject
of a taking by the foreign country or losses due to civil unrest. What advice would you give him?
a.
He should seek insurance through the Foreign Insurance Services Company, a privately run insurance
company specializing in foreign risk.
b.
He should do nothing at the present, but seek reimbursement through the U.S. government should losses be
incurred.
c.
He should seek insurance through the Overseas Private Investment Corporation, a U.S. government agency
specializing in providing insurance for foreign risk.
d.
He should sell the company and leave the country because insurance is not available
c
1
Challenging
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24-3 Constraints on Foreign Ownership
Blooms: Analysis
63. Connie owns a retail establishment that sells electronics. She does a lot of business with Company ABC in Japan.
Connie does not want to learn Japanese law or travel to Japan in the event of a dispute with the company. She seeks
advice regarding how to protect herself from such risks in the event of a dispute. Which of the following would be a good
idea for Connie?
a.
A choice-of-law provision
b.
A choice-of-forum provision
c.
A conflict-of-laws provision
d.
Both a choice-of-law provision and a choice-of-forum provision
d
1
Challenging
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24-15d Choice of Law and Choice of Forum
a
1
Analysis
United States – BUSPROG: – ANALYTIC
DISC: – AICPA: BB-Legal
24–13a Payment and Letters of Credit
Blooms: Analysis
64. Set forth the differences between the current British common law system and the U.S. common law systems. Describe
the difference between a solicitor and a barrister in the British system.
65. What is the principle of comity? What conditions must usually exist for the principle to be applied?
66. What is the act–of-state doctrine, and how is it generally applied by U.S. courts?
67. The Gulf Oil Corp. v. Gilbert discussed the text, addressed the question of forum non conveniens. What factors did the
U.S. Supreme Court set forth that courts should consider in deciding whether to dismiss a case based on forum non
conveniens?
68. Explain the “commercial activity” exception to the Foreign Sovereign Immunities Act.
69. Set forth the seven principle European Institutions primarily responsible for governing the European Union.