20. Highly industrialized countries account for close to ____ of the world’s gross national product.
a.
80%
c.
40%
b.
60%
d.
20%
21. Which of the following countries has not been identified as an emerging market by The Economist?
a.
China
c.
Mexico
b.
Poland
d.
Japan
22. Which of the following is not a trait of an emerging market?
a.
High political stability
b.
A low level of inflation
c.
A high savings rate
d.
All of the above are traits of an emerging market.
23. Which of the following sources provides a country risk rating on a scale from 1 to 10, and risk
perception and collection experience for the previous four months?
a.
The Economist
b.
The Wall Street Journal
c.
the Economist Intelligence Unit
d.
RUNDT’s World Business Intelligence
24. Which of the following is a risk related to government trade policy?
a.
Confiscation
c.
Domestication
b.
Expropriation
d.
None of the above
25. Which of the following is not a political risk signal?
a.
Congruent interests
c.
Political repression
b.
Economic performance
d.
Nationalism
26. This government agency is used to evaluate a country’s political risk:
a.
State Department
c.
All of the above
b.
Department of Commerce
d.
None of the above
27. ____ is the belief that buying foreign goods will put local companies out of business.
a.
Creeping consumerism
c.
Consumer ethnocentrism
b.
Nationalization
d.
None of the above
28. Which of the following is not a form of nationalization?
a.
Confiscation
c.
Consumer ethnocentrism
b.
Expropriation
d.
Domestication
29. Which of the following refers to “the seizing of company assets and/or investors’ assets without any
compensation.”
a.
Confiscation
c.
Nationalization
b.
Expropriation
d.
Domestication
30. ____ involves some reimbursement for company assets, usually not at their market value.
a.
Confiscation
c.
Domestication
b.
Expropriation
d.
None of the above
31. ____ refers to a condition characterized as “difficult bureaucracies unreliable judicial systems, shifting
regulations, and corrupt operating environments.”
a.
Confiscation
c.
Domestication
b.
Creeping Expropriation
d.
Nationalization
32. Which of the following is not a way to minimize the risk of domestication?
a.
Partnering with local companies
b.
Creating local expertise in product manufacturing
c.
Using local suppliers
d.
All of the above are ways to minimize risks.
33. Which of the following offers a policy that insures companies against expropriation, nationalization, or
confiscation by foreign governments?
a.
The Federal Reserve Bank
b.
Overseas Private Investment Corporation
c.
OPEC
d.
The Department of Commerce
34. Which type of law is based on prior court rulings (i.e., legal precedent)?
a.
Common Law
c.
Islamic Law
b.
Code Law
d.
Socialist Law
35. Which of the following systems of law is utilized by the largest number of countries?
a.
Common Law
c.
Islamic Law
b.
Code Law
d.
Socialist Law
36. Which of the following legal systems is based on comprehensive written laws that specify what
constitutes legal behavior?
a.
Common law
c.
Precedent law
b.
Code law
d.
None of the above
37. Legal disputes that arise between governments are usually handled by the ____.
a.
International Court of Justice
c.
European Court of Justice
b.
Supreme Court
d.
Global Court of Commerce
38. The following is a nonbonding procedure that involves an independent third party:
a.
Arbitration
c.
Mediation
b.
Litigation
d.
None of the above
39. Protection of the rights of the inventor or of the firm employing the inventor to use and sell the
invention for a specified period of time is known as a ____.
a.
copyright
c.
trademark
b.
patent
d.
trade secret
40. Which of the following is an organization dedicated to fighting copyright infringement?
a.
International Intellectual Property Alliance (IIPA)
b.
Global Trade Protection Agency (GTPA)
c.
World Wide Trade Association (WWTA)
d.
Society for Intellectual Property Rights (SIPR)
41. According to TRIPS, patents can be granted for any new technological process or product, and the
protection lasts ____ years from the date of application.
a.
7
c.
20
b.
15
d.
37
42. Which of the following statements is not true regarding the U. S. Foreign Corrupt Practices Act?
a.
The Act makes it illegal for companies to bribe government officials.
b.
The Act prohibits payment to third parties when the company has good reason to assume
that part of the payment is being used for bribery purposes.
c.
Companies can be forced to pay fines if they are found guilty of violating the Act.
d.
All of the above are true statements.
43. ____ determines access to the market and affects distribution decisions.
a.
geology
c.
climate
b.
topography
d.
population
44. ____ determines access to the market and affects distribution decisions.
a.
geology
c.
climate
b.
hydrology
d.
population
45. Its growth can lead to famine and conflict.
a.
geology
c.
climate
b.
topography
d.
population
46. ____ determines the natural resources available in the country and its potential for prosperity.
a.
Geology
c.
Climate
b.
Topography
d.
Population
47. ____ concerns have led to the active regulation of business, especially in industrialized countries.
a.
Geology
c.
Climate
b.
Topography
d.
Environmental
48. Successful industries are emerging aimed at creating alternative energy sources and reducing the cost
of electricity consumption in an effort to improve ____.
a.
geology
c.
climate quality
b.
topography
d.
environmental quality
49. Which of the following countries has the highest Internet penetration?
a.
Italy and France
c.
United States and the Netherlands
b.
Japan and Korea
d.
United Kingdom
50. Which continent has 56.4 percent of the world population and 10.6 Internet penetration?
a.
Africa
c.
Asia
b.
North America
d.
Europe
COMPLETION
1. Rather than rising and falling separately, national economies increasingly respond to the same forces.
____________________ has become the leading principle of globalization.
2. The top 100 companies in the world control about ____________________ percent of foreign assets,
employ 6 million workers, and account for as much as 7 percent of total world economic activity.
3. A ____________________ dollar makes American goods and services more competitive in foreign
markets, keeps jobs at home, and decreases the trade deficit because America’s workers keep more
production at home and sell more goods abroad.
4. There are two models of economic development that have gained acceptance in the world: a Western
model, best articulated by ____________________, and the Marxist-Leninist model.
5. The fall of communism in Europe and the recent structural changes in China and Vietnam have
reduced considerably the areas dominated by the ______________________________ philosophy on
economic development.
6. During the ____________________ stage of the Rostow Modernization Model, growth becomes the
norm and improvements in production lead the emergence of leading sectors.
7. During the ____________________ stage of the Rostow Modernization Model, income rises across
the board, and a new class of established entrepreneurs emerges.
8. The ___________________________________ model is a competing alternative for developing
nations seeking to avoid domination by advanced market capitalist economies.
9. The Marxist-Leninist (Maoist) model fuels anticolonial and _________________________
sentiments.
10. Under ____________________, all means of production and private property are under state
ownership and/or cooperative ownership.
11. ____________________ countries are highly industrialized countries which have strong industrial and
service sectors.
12. ________________________________ have rapidly developing economies, and especially in urban
areas, they have an infrastructure that is on par with that of developed countries.
13. According to the World Bank, countries considered upper middle income countries have a GNI per
capita of ___________________________________.
14. _________________________ countries have a GNI per capita of above US$10,725.
15. The new European Union member countries that have rapidly privatized state-owned industries and
adopted market reforms are classified as ______________________________ by the World Bank.
16. A country with a GNI per capita of US$3,200 is classified by the World Bank as
______________________________ country.
17. Argentina, Chile, and Mexico are examples of ______________________________ countries,
according to the World Bank.
18. Commercial payment terms and collection experience indicate the availability of
_________________________ reserves.
19. General repression by the elite – especially if the elite’s position is not considered legitimate – is always
a signal of ______________________________.
20. ______________________________ is the belief that buying foreign goods will put local companies
out of business and is, consequently, morally wrong.
21. There are three types of ____________________, all of which are aimed to transfer company
ownership from the company to local owners.
22. ____________________ refers to the seizing of company assets and/or investors’ assets without any
compensation.
23. In the aftermath of the Asian crisis, governments have been nationalizing ailing banks across the
region: in ____________________, the government controls nearly all of the country’s biggest banks
and has taken over around 75% of all bank assets.
24. ____________________ occurs when the local government requires a gradual transfer of ownership
and management to locals.
25. _________________________ is based on prior court rulings (legal precedent).
26. ____________________ refers to comprehensive written laws that specify what constitutes legal
behavior.
27. ____________________ is a non-binding procedure that involves an independent third party.
28. ____________________ is a procedure that involves an independent third party binding decision –
instead of litigation.
29. Protection of the rights of the inventor of the firm employing the inventor to use and sell the invention
for a specified period of time is a type of intellectual property known as a(n) ____________________.
30. Protection of the rights to an original work of art (literature, music, film, design, and other works),
allowing the owner the right to reproduce, sell, perform, or film the work is known as a(n)
____________________.
ESSAY
1. Describe the stages of the Rostow Modernization model of economic development.
2. Describe the stages of the Marxist-Leninist model of economic development.
3. What traits are characteristic of emerging markets?
4. How can companies protect themselves against political instability?
5. Describe the factors influencing intellectual property rights violations.