The Legal Environment of Business and Online Commerce, 7e (Cheeseman)
Chapter 26 International and World Trade Law
1) The U.S. Constitution divides the power to regulate foreign affairs equally between the federal
and state governments.
2) Any state or local law that unduly burdens foreign commerce is considered to be in violation
of the Foreign Commerce Clause.
3) Under the Treaty Clause, both the federal government and state governments can enter into
treaties with foreign nations.
4) The Treaty Clause of the U.S. Constitution designates the president of the United States as its
agent to deal with foreign affairs.
5) The UN Security Council is composed of all the UN member nations.
6) The UN does not allow permanent membership of the Security Council to any member nation.
7) The UN Secretariat is headed by the secretary-general of the UN.
8) The secretary-general of the UN is elected by the Security Council.
9) The International Monetary Fund is an example of an autonomous agency that is a part of the
UN.
10) The International Monetary Fund is an exclusive organization set up to primarily help the
member nations of the Security Council.
11) The International Court of Justice is composed of 15 judges who serve nine-year terms.
12) A nation can seek redress on behalf of an individual or a business that has a claim against
another country in the International Court of Justice.
13) Individuals and businesses can directly approach the International Court of Justice to fight a
case involving international contracts.
14) The United Nations is charged to take enforcement actions to ensure member compliance
with the European Union.
15) The European Union Commission has negligible authority to enact legislations and take
enforcement actions when compared to the EU.
16) Under the European Union, customs duties have been eliminated among member nations.
17) The euro can only be used in countries that are part of the eurozone.
18) The European Union is an example of a multilateral treaty.
19) The North American Free Trade Agreement (NAFTA) is a bilateral treaty between the
United States and Mexico.
20) The North American Free Trade Agreement (NAFTA) includes special protection for
favored industries that have a lot of lobby muscle.
21) The Dominican Republic—Central America Free Trade Agreement (DR-CAFTA) disallows
its member nations from entering into treaties with countries in Central America that are not part
of the DR-CAFTA.
22) The Association of Southeast Asian Nations (ASEAN) was created as a treaty among the oil-
producing countries of Asia.
23) The Organization of the Petroleum Exporting Countries (OPEC) sets quotas on the output of
oil production by its individual member nations.
24) The World Trade Organization (WTO) was created as a successor to the General Agreement
on Tariffs and Trade (GATT).
25) The World Trade Organization (WTO) dispute settlement body is the first body to hear a
settlement dispute among member nations.
26) The World Trade Organization (WTO) panel adopts the panel report and issues remedies for
the violation.
27) The World Trade Organization (WTO) appellate body hears appeals that are limited to issues
of law, not fact.
28) A forum-selection clause designates which nation’s court has jurisdiction to hear a case
arising out of a contract.
29) A choice of law clause is a mandatory clause that should be present in every international
contract.
30) The act of state doctrine allows the citizen of one country to fight a case in that country
against a law prevalent in another.
31) The United States follows the doctrine of restricted immunity for suits against foreign
nations.
32) The FSIA strictly states that a foreign country is not immune to lawsuits in U.S. courts under
any circumstance.
33) Rabbinic jurisprudence is administered by rabbi-judges sitting as the Beis Din.
34) The Islamic law of Shari’a encourages levying interest on loan payments.
35) The canons of Christian faiths provide rules for believers to follow in living their lives and
professing their faith.
36) The Code of Canon Law of 1983 stipulates the code of conduct to be followed by all
Christians around the world.
37) Classical Hindu law heavily rests on civil codes adopted during the reigns of different kings.
38) Which of the following statements is true with regard to international law?
A) All legal matters of international importance are prosecuted by a single world court that is
responsible for interpreting international law.
B) The enforcement of all international laws is regulated by a unitary world executive branch.
C) There is no single legislative source from which all international laws are created.
D) All countries have to follow the international laws enacted by other countries.
39) Which of the following pairs of constitutional provisions gives the federal government the
authority to regulate foreign affairs?
A) the Due Process Clause and Double Jeopardy Clause
B) the Supremacy Clause and Equal Protection Clause
C) the Free Exercise Clause and Establishment Clause
D) the Foreign Commerce Clause and Treaty Clause
40) If a state enacts a law that increases its tax on imported automobiles but not on American-
made automobiles, it violates the ________ of the U.S. Constitution.
A) Equal Protection Clause
B) Foreign Commerce Clause
C) Supremacy Clause
D) Due Process Clause
41) Which of the following statements is true of the Treaty Clause?
A) It provides that the president can make treaties on his own accord autonomously.
B) It provides that the president can enter into treaties with two-thirds senate approval.
C) It provides that the states have exclusive power to regulate internal and foreign affairs.
D) It provides that the federal government has supremacy over the state in matters of
international trade.
42) Under the Treaty Clause, the ________ is seen as the agent of the United States in dealing
with foreign countries.
A) the Secretariat
B) the president
C) the United Nations
D) the United States Senate
43) An agreement between two or more nations that is formally signed by an authorized
representative of each nation and ratified by each nation is defined as a(n) ________.
A) statute
B) charter
C) treaty
D) arraignment
44) Treaties arranged by international organizations like the United Nations are known as
________.
A) arraignments
B) easements
C) amendments
D) conventions
45) The ________ is an international organization created by a multilateral treaty in 1945 to
promote social and economic cooperation among nations and to protect human rights.
A) United Nations
B) League of Nations
C) General Agreement on Tariffs and Trade
D) World Trade Organization
46) The General Assembly of the United Nations is ________.
A) a collection of autonomous agencies that deal with the socio-economic problems of the
United States
B) the legislative body of the United Nation that is composed of all UN members
C) a group of 15 member nations that is primarily responsible for maintaining international peace
and security
D) the staff of persons that administers the day-to-day operations of the UN
47) Which of the following branches of the United Nations is primarily responsible for
maintaining international peace and has authority to use armed force for this purpose?
A) the General Assembly
B) the Secretariat
C) the Security Council
D) the International Court of Justice
48) Which of the following is headed by the secretary-general of the UN?
A) the International Court of Justice
B) the Secretariat
C) the Security Council
D) the General Assembly
49) The ________ is a staff of persons that administers the day-to-day operations of the UN.
A) Council of Ministers
B) Security Council
C) General Assembly
D) Secretariat
50) Which of the following is true of the International Monetary Fund?
A) The IMF is a federal body that consists of representatives of all the states and federal experts
in the United States.
B) The IMF is funded from the Superfund created by the Comprehensive Environmental
Response, Compensation, and Liability Act.
C) The IMF is an autonomous agency under the UN which promotes sound monetary, fiscal, and
macroeconomic policies worldwide.
D) The IMF is responsible for providing one-time grants to needy countries with no terms and
conditions attached to the assistance.
51) Which of the following is an example of an autonomous agency of the United Nations?
A) the North Atlantic Treaty Organization
B) the Security Council
C) the World Trade Organization
D) the International Monetary Fund
52) The ________ is a body that prosecutes cases that nations refer to it as well as cases
involving treaties and the UN Charter.
A) Security Council
B) General Assembly
C) International Court of Justice
D) International Monetary Fund
53) Which of the following statements is true of the International Court of Justice?
A) It is the executive branch of the United Nations that helps interpret international law.
B) It only hears cases of nations, and not of individuals and businesses.
C) It does have the authority to hear cases involving treaties and UN charters.
D) It is headed by the secretary-general of the United Nations.
54) The World Bank is ________.
A) an autonomous agency under the aegis of the European Union
B) an agency that monitors the financial collaborations taking place in the eurozone
C) primarily responsible for promoting sound monetary, fiscal, and macroeconomic policies
worldwide
D) primarily responsible for providing money to developing countries to fund projects for
humanitarian purposes
55) ________ is a regional international organization that comprises many countries of Western
and Eastern Europe and was created to promote peace and security as well as economic, social,
and cultural development.
A) European Economic Community
B) Common Market
C) North Atlantic Treaty Organization
D) European Union
56) Which of the following statements is true of the European Union?
A) All issues have to be passed unanimously by the EU members to be enforced.
B) Every country in the European Union has adopted the euro as its monetary unit.
C) Custom duties have been removed among member nations of the European Union.
D) Custom tariffs have been removed for trade between the EU and the rest of the world.
57) The ________ is a trilateral treaty that has removed or reduced tariffs, duties, quotas, and
other trade barriers between the United States, Canada, and Mexico.
A) Free Trade Area of the Americas Treaty
B) North American Free Trade Agreement
C) Central America Free Trade Agreement
D) General Agreement on Tariffs and Trade
58) Which of the following statements is true of the NAFTA?
A) It allows a member country to reimpose tariffs if imports are hurting that country’s economy
or its workers.
B) It disallows any special protection being extended to specific industries.
C) It disallows NAFTA members from trading with other countries unless a unanimous
permission is obtained.
D) It has been hailed by economists to be a perfect example of a free trade pact.
59) Indonesia, Vietnam, Thailand, and Philippines are members of the ________.
A) Organization of the Petroleum Exporting Countries
B) Association of Southeast Asian Nations
C) Dominican Republic—Central America Free Trade Agreement
D) North American Free Trade Agreement
60) Ecuador, Algeria, and the United Arab Emirates are members of the ________.
A) North American Free Trade Agreement
B) Dominican Republic—Central America Free Trade Agreement
C) Association of Southeast Asian Nations
D) Organization of the Petroleum Exporting Countries
61) The ________ is an international organization of 153 member nations created in 1995 to
promote and enforce trade agreements among member countries and customs territories.
A) World Trade Organization
B) International Monetary Fund
C) North American Free Trade Commission
D) General Agreement on Tariffs and Trade
62) Which of the following replaced the General Agreement on Tariffs and Trade (GATT)?
A) World Bank
B) World Trade Organization
C) International Monetary Fund
D) North American Free Trade Commission
63) In case of a breach in trade agreements of the World Trade Organization (WTO), which of
the following WTO bodies first hears the dispute?
A) the WTO panel
B) the WTO appellate body
C) the WTO dispute settlement body
D) the WTO General Council
64) What is the role of the WTO dispute settlement body?
A) to hear appeals on decisions made on a dispute
B) to create panel reports on the findings of the dispute
C) to hear the dispute settlement from the plaintiff
D) to review panel reports and adopt them if necessary
65) By default, a case involving an international dispute is prosecuted only in ________.
A) the International Court of Justice
B) a court in the defendant’s country
C) a court in the plaintiff’s country
D) a court in a neutral country
66) ________ is a clause in an international contract that designates which nation’s laws will be
applied in deciding a dispute arising out of the contract.
A) Equal Protection Clause
B) Supremacy Clause
C) Forum-selection clause
D) Choice of law clause
67) ________ is a clause in an international contract that designates which nation’s court has
jurisdiction to hear a case arising out of the contract.
A) Forum-selection clause
B) Treaty Clause
C) Foreign Commerce Clause
D) Choice of law clause
68) ________ is a rule which states that judges of one country cannot question the validity of an
act committed by another country within that other country’s borders.
A) Doctrine of sovereign immunity
B) Act of state doctrine
C) Colgate Doctrine
D) Noerr Doctrine
69) Which of the following is provided under the Foreign Sovereign Immunities Act?
A) It stipulates the rules for conflict resolution among the DR-CAFTA members.
B) It endows the president with powers to enter into treaties with foreign nations.
C) It exclusively governs suits against foreign nations in the United States.
D) It regulates commerce between the United States and foreign nations.
70) Which of the following is codified under the Foreign Sovereign Immunities Act?
A) the act of state doctrine
B) the principle of restricted immunity
C) the supremacy clause
D) the choice of forum clause
71) Which of the following is an exception to the Foreign Sovereign Immunities Act?
A) sham exception
B) managed trade exception
C) diversity of citizenship exception
D) commercial activity exception
72) The ________ prescribes comprehensive and integrated rules of religious, political, and legal
life that together form Jewish thought.
A) Canon
B) Torah
C) dharmasastra
D) Riba
73) Throughout Christianity, divine and natural laws have been issued in the form of ________.
A) edicts
B) conventions
C) novations
D) canons
74) Which of the following statements is true with regard to the canons of Christian faith?
A) The Code of Canon Law produced in the 1917 is followed by all sects of Christianity today.
B) The Code of Canon Law regulates the conduct of the Church but fails to govern the actions of
individual Catholics.
C) The Orthodox churches treat their canons more as guidelines than as laws.
D) The canons remain silent on the legal measures guiding marriage or inheritance.
75) Which of the following is true of the Islamic law of Shari’a ?
A) The Shari’a disallows making a reasonable profit from the sale of goods and services.
B) All Islamic countries strictly follow the complete Shari’a to govern all aspects of life.
C) The Shari’a encourages riba through the strict payment and collection of interest on loans
within stipulated periods of time.
D) The Shari’a is primarily used in the areas of marriage, divorce, and inheritance and, to a
limited degree, criminal law.
76) The classical Hindu law was based on ________.
A) civil codes
B) court decisions
C) works of private scholars
D) canons called Torahs
77) Explain the Treaty Clause of the U.S. Constitution.
78) What is the World Bank? What is its function?
79) What are the implications of the North American Free Trade Agreement (NAFTA) treaty?
80) How are disputes settled in the World Trade Organization (WTO)? What are the different
WTO bodies that handle disputes?
81) What does the act of state doctrine assert?
82) Under the ________ Clause of the Constitution, treaties become part of the “law of the land,”
and conflicting state or local law is void.
83) ________ are treaties that are sponsored by international organizations, such as the United
Nations.
84) All UN members are part of the ________, which is the legislative body of the UN.
85) The judicial branch of the UN is known as the ________.
86) The ________ administers the day-to-day operations of the UN.
87) The UN ________ is composed of 15 member nations, and is primarily responsible for
maintaining international peace and security and has authority to use armed force.
88) The EU’s ________ is composed of representatives from each member country who meet
periodically to coordinate efforts to fulfill the objectives of the treaty.
89) The ________ is a collective term used to indicate nations that use the euro as their currency.
90) The ________ is a treaty between the United States, Mexico, and Canada to create a free
trade zone between the three countries.
91) ________ is an exclusive organization of oil-producing countries that sets quotas on the
output of oil production by member nations.
92) In 1995, the ________ was created as a successor to the General Agreement on Tariffs and
Trade (GATT).
93) The panel report on the dispute among members of the World Trade Organization is referred
to the ________, which then may adopt the panel report if it sees fit.
94) The ________ doctrine is based on the principle that a country has absolute authority over
what transpires within its own territory. The doctrine states that judges of one country cannot
question the validity of an act committed by another country within that other country’s borders.
95) Many international contracts contain a ________ clause that designates which nation’s court
has jurisdiction to hear a case arising out of a dispute.
96) The ________ Act exclusively governs suits against foreign nations that are brought in
federal or state courts in the United States.
97) Laws and regulations that have been adopted by Catholic and other Christian ecclesiastical
authorities that relates to internal laws that govern the church and its members are known as
________ laws.
98) Jewish jurisprudence is administered by the ________, which is a Jewish court consisting of
rabbi-judges.