The concept of local participation refers to:
a. A portion of the employees of the business in the host country will be nationals of the
home country.
b. Employees of the business contribute a certain number of hours to community
service.
c. A portion of the business must be owned by nationals of the host country.
d. The host country retains mineral rights.
Answer:
The difference between terms “CFR” and “CIF” is that under “CIF” term of sale, the
buyer must procure his own marine insurance coverage on the goods.
a. True
b. False
Answer:
Political risk or investment insurance is available in the United States through a U.S.
government agency known as:
a. The Overseas Public Investment Commission.
b. The Overseas Private Investment Corporation.
c. The Open Private Insurance Corporation.
d. The Overseas Panel for Insurance Coverage.
Answer:
There are many different types of bills of lading. The one that the book advises that
most buyers insist the seller provide is:
a. A straight bill of lading.
b. An on-board bill of lading.
c. A received-for-shipment bill of lading.
d. A clean, on-board bill of lading.
Answer:
The OECD Guidelines for Multinational Enterprises encourages responsible conduct in
the following areas
a. Employment
b. Bribery
c. Environment
d. Both b and c.
Answer:
Although the 1947 GATT was never ratified by the U.S. Congress, the United Nations
assembly voted that GATT would be imposed on all of the nation members.
a. True
b. False
Answer:
NAFTA has had a modest positive effect on U.S. net exports, income, investment, and
jobs.
a. True
b. False
Answer:
An appeal to the appropriate federal court may be had from a decision by the
International Trade Administration not to conduct an investigation concerning the
dumping of a product.
a. True
b. False
Answer:
DownPillow, Inc., a U.S. company, and Eiderhoff, a German Company, negotiate a
contract with forum and choice of law clauses for the U.S. A dispute arises, the case is
heard in the U.S., and a judgment is given to DownPillow. DownPillow wants to
enforce this judgment in Germany.
a. Germany will not allow this judgment to be enforced in Germany because it does not
recognize U.S. judgments.
b. Germany will allow one-half of the judgment to be enforced in Germany.
c. Germany will allow the entire judgment to be enforced if Eiderhoff received notice, it
does not violate German law, and the U.S. reciprocates with German judgments.
d. None of the above.
Answer:
Importation of merchandise produced and sold abroad and then imported back into the
United States for sale in competition with the U.S. trademark owner is referred to
counterfeit goods.
a. True
b. False
Answer:
If a U.S. firm creates a foreign subsidiary corporation, it:
a. Fully subjects it to income taxation in the foreign country.
b. Fully avoids taxation in the United States on income repatriated from the foreign
subsidiary.
c. Will significantly reduce its taxable income.
d. None of the above.
Answer:
The export restrictions of hazardous materials under the Resources Conservation and
Recovery Act are less onerous compared to the Federal Insecticide, Fungicide, and
Rodenticide Act.
a. True
b. False
Answer:
Exporting is the shipment of goods or rendering of services to a foreign buyer located in
a foreign country.
a. True
b. False
Answer:
An example of a successful unilateral use of export controls was the embargo of wheat
destined to Russia as a political response to the Russian invasion of Afghanistan.
a. True
b. False
Answer:
Socialist law is less flexible and more mechanical than the common law.
a. True
b. False
Answer:
In order to qualify for the favorable tax treatment of a Foreign Sales Corporation, a U.S.
firm must meet all of the following tests, except:
a. At least one director must be a nonresident of the U.S.
b. Its income must be derived from qualified export activity such as the sale of goods
abroad.
c. Management must be outside the U.S.
d. None of the income may be repatriated to the United States.
e. The FSC must participate in soliciting, negotiating, or contracting with a foreign
buyer.
Answer:
Company A wants to use some technology that Company B has developed, so Company
A pays Company B a license fee, called a(n):
a. permission fee.
b. royalty.
c. IPR.
d. rights payment.
Answer:
No other trade sector is as complex or as highly regulated as trade in textiles.
a. True
b. False
Answer:
Incoterms are published by the International Chambers of Commerce based in Paris,
France.
a. True
b. False
Answer:
A sale made with terms “CIF Tokyo” includes in the price quoted for the goods which
of the following:
a. Cash, in-transit expenses, foreign exchange expenses.
b. Cash, insurance, freight.
c. Cost, insurance, freight.
d. Currency exchange expenses, insurance, freight.
Answer:
If a foreign investor is prohibited by the host country’s laws from owning a majority of
a joint venture, another way to gain operational control is:
a. Secretly to have other foreign nationals invest money in trust for the investor.
b. To use American management techniques with cumulative voting for the board of
directors.
c. To surround the joint venture with contractual obligations to the foreign investor.
d. A and C.
Answer:
When import regulations are readily available to importers and exporters, they are
considered to be transparent.
a. True
b. False
Answer: