Marketing Chapter 4 The Nigerian Government Decided Host The All Africa

1

When faced with a regulatory change, a company can choose a(n) ^___^ strategy by

making strategic moves that bypass the impact of government’s actions.

2

Which country strictly regulates Avon sales representatives?

(A)

Brazil

(B)

China

(C)

Saudi Arabia

(D)

United States

3

OPIC insurance covers losses due to

(A)

currency inconvertibility

(B)

expropriation

(C)

war and revolution

(D)

All of the above

4

Which of the following is a cost to business associate with terrorism?

(A)

Insurance

(B)

Redundant capacity

(C)

Lost revenues

(D)

All of the above

5

Companies in the United States can purchase political risk insurance from

(A)

their state governments

(B)

the IMF

(C)

OPIC

(D)

U.S. AID

6

OPIC is a source of

(A)

multilateral lending to developing countries

(B)

political risk insurance

(C)

cartel oil

(D)

hedging contracts for exporters

7

Borrowing locally helps companies to

(A)

reduce exposure to political risk

(B)

strengthen relationships with local companies

(C)

borrow at lower interest rates

(D)

address legitimacy issues of the host country

8

Which is a political risk reduction strategy?

(A)

Utilizing local partners

(B)

Minimizing assets at risk

(C)

Purchasing political risk insurance

(D)

All of the above

9

The U.S. Securities and Exchange Commission (SEC) requires firms that sell securities in

the United States to

(A)

prepare an annual political risk assessment

(B)

disclose any activities in countries subject to U.S. sanctions

(C)

disclose any activities in breach of the Arab Boycott

(D)

All of the above

10

A company would adopt the “alter” strategy to a regulatory change when the issue is of

(A)

low importance to the company, and the firm has no power to influence a change

(B)

high importance to the company, and the firm has no power to influence a change

(C)

low importance to the company, and the firm has the power to influence a change

(D)

high importance to the company, and the firm has the power to influence a change

11

When a company adopts the “avoid” strategy to a regulatory change, it

(A)

does not care about the regulatory change

(B)

makes strategic moves that bypass the impact of a government’s action

(C)

leaves the host country

(D)

avoids some risks of government actions by seeking strategic alliances

12

Regulatory changes include

(A)

changes in tax rates

(B)

political revolutions

(C)

revisions of labeling requirements

(D)

Both a and c

13

Product liability laws

(A)

have always been stricter in Europe than in the United States

(B)

were first introduced in the United States

(C)

are more numerous and more expensive to settle in developing countries

(D)

All of the above

14

In Germany, rules are strictly applied because of its

(A)

high power distance and negative HNO

(B)

low power distance and negative HNO

(C)

high power distance and positive HNO

(D)

low power distance and positive HNO

15

Under socialist law,

(A)

private ownership of businesses is strongly encouraged

(B)

market economies exist

(C)

business laws exist to protect businesses

(D)

None of the above

16

Common law is based on

(A)

what a society views as right and is commonly done

(B)

teachings in the Koran

(C)

the preeminence of written laws

(D)

Marxist ideology

17

The Nestlé Company became a target of boycott by consumer action groups in the United

States due to

(A)

the use of child labor in Asia

(B)

marketing of infant-formula in developing countries

(C)

a lack of concern for environmental issues

(D)

trade with Cuba

18

International companies may come under attack from home country pressure groups

because of their

(A)

product policies

(B)

promotion strategies

(C)

pricing policies

(D)

All of the above

19

An American company sets up a subsidiary in Thailand, including a production facility and

marketing/sales office. In this example, Thailand is a(n) ___________ country.

(A)

auxiliary

(B)

home

(C)

host

(D)

subsidized

20

An American company sets up a subsidiary in Thailand, including a production facility and

marketing/sales office. In this example, the USA is a(n) ___________ country.

(A)

auxiliary

(B)

home

(C)

host

(D)

subsidized

21

HNO ^___^ societies assume people can be trusted to obey rules.

22

Saudi Arabia follows ^___^ law, which is based on the Koran.

23

In a(n) ^___^ law legal system, law arises from what society acknowledges as right and

from what has commonly been done and accepted.

24

The formal, or legal, seizure of a company’s operation with or without the payment of

compensation is known as ^___^.

25

^___^ are more dangerous to a firm than other host government actions such as subsidies

or ownership restrictions because they completely shut out companies from a market.

26

The complete control exercised by countries, including the ability to pass and enforce laws

within a given geographical area, is known as ^___^.

27

In Vietnam, foreign electric component manufacturers are required by the Vietnamese

government to prove that a minimum of 20 percent of the components must be made with

local input products. This is an example of ___________.

(A)

indirect subsidy

(B)

ownership restriction

(C)

operating conditions

(D)

direct subsidy

28

The Iraqi government limits foreign ownership of businesses in Iraq to 49 percent. This is

an example of a(n) ____________.

(A)

indirect subsidy

(B)

ownership restriction

(C)

operating conditions

(D)

direct subsidy

29

Ecuador provides electricity to several large exporting companies in Quito, the capital city.

This is an example of a(n)__________.

(A)

indirect tariff

(B)

direct tariff

(C)

indirect subsidy

(D)

direct subsidy

30

To support the local apparel industry, the Bulgarian government pays each Bulgarian

apparel company US$1 for each piece of clothing that they export. This is an example of

a(n) ___________.

(A)

indirect tariff

(B)

direct tariff

(C)

indirect subsidy

(D)

direct subsidy

31

Friends of the Earth Indonesia and other non-governmental organizations complained that

Mobil Oil was complicit in human rights abuses that had occurred during the construction of

its pipeline in the Ache province of Indonesia. They tried to pursue the Indonesian

government to end their joint venture with Mobil Oil. These organizations are examples of

_________ groups.

(A)

home country pressure

(B)

self-preservation

(C)

host country pressure

(D)

cultural identity preservation

32

In the past, Iran and Venezuela have attempted to outlaw foreign brand names, requiring

international marketers to establish names for their products in Persian and Spanish. These

governments were interested in ______________.

(A)

promoting national ideology

(B)

self-preservation

(C)

protecting cultural identity

(D)

None of the above

33

For nearly 50 years, North Korea has pursued the strategy of juche, or self-reliance, trading

very little with the outside world except with fellow communist states of China and Russia.

This is because of the North Korean government’s interest in _______.

(A)

promoting national ideology

(B)

fostering national prosperity

(C)

giving into the demands of environmentalist pressure groups

34

The Nigerian government decided to host the All-Africa Games in 2003, despite the fact

that building costs for a new stadium exceeded $340 million, twice what the government

planned to spend on health care for one year. This action was motivated by the Nigerian

government’s interest in _______.

(A)

protecting national security

(B)

enhancing national prestige

(C)

promoting national ideology

(D)

self-preservation

35

A major goal of the European Union government is to provide full employment and

increasing standard of living for its citizens by encouraging foreign investment in the EU

and promoting EU exports in foreign markets. These actions are motivated by the EU

government’s interest in ______________.

(A)

fostering national prosperity

(B)

protecting national security

(C)

enhancing national prestige

(D)

self-preservation

36

In July 2005, the U.S. Congress blocked China’s plans to acquire the U.S. oil and gas

company, Unocal. Congress argued that crucial raw materials, such as oil, should not be

controlled by an economic rival. This action is motivated by the American government’s

interest in ________.

(A)

protecting national cultural identity

(B)

promoting national ideology

(C)

protecting national security

(D)

enhancing national prestige

37

In Australia, foreign ownership of television stations is limited to no more than 20 percent.

It is feared that if a foreign country controlled the media, it could influence public opinion

and national sovereignty. This regulation is motivated by the Australian government’s

interest in _________.

(A)

promoting national ideology

(B)

enhancing national prestige

(C)

fostering national prosperity

(D)

self-preservation

38

Multilateral embargoes have been aimed at

(A)

Iran, Iraq, and Saudi Arabia

(B)

South Africa, Serbia, and Iraq

(C)

Cuba, South Africa, and Russia

(D)

Vietnam, Iraq, and Cuba

39

In the past 25 years, which country has not been embargoed by the United States?

(A)

Vietnam

(B)

Mexico

(C)

South Africa

(D)

Iraq

40

The U.S. embargo on Vietnam occurred between which dates?

(A)

1962–1975

(B)

1962-present

(C)

1975–1994

(D)

1975-present

41

Political risk is more predictable than regulatory change.

(A)

True

(B)

False

42

Regulatory changes are sudden, dramatic changes in the regulatory climate of a host

country.

(A)

True

(B)

False

43

In China, there are no bankruptcy laws.

(A)

True

(B)

False

44

In code law systems, judges play a far more important role and juries usually play a lesser

role.

(A)

True

(B)

False

45

Code law is prevalent in the United States of America.

(A)

True

(B)

False

46

Civil, or code law, is based on the Confucian tradition of the preeminence of written laws.

(A)

True

(B)

False

47

Any country that contains an operational unit of an international company can be defined

as a home country.

(A)

True

(B)

False

48

Confiscation is expropriation with compensation.

(A)

True

(B)

False

49

Takeovers are host government initiated actions that result in loss of ownership or direct

control.

(A)

True

(B)

False

50

A firm’s need to invest in redundant capacity is one of the costs of terrorism.

(A)

True

(B)

False

51

Today almost all very large U.S. companies carry terrorism insurance.

(A)

True

(B)

False

52

The WTO outlaws indirect subsidies and requires all subsidies be direct.

(A)

True

(B)

False

53

Governments often used subsidies to encourage firms that would be major exporters.

(A)

True

(B)

False

54

The economies of the Soviet Union and North Korea suffered as a consequence of their

government’s ideology of attaining self-reliance.

(A)

True

(B)

False

55

Many host governments try to improve a nation’s prosperity by increasing imports.

(A)

True

(B)

False

56

In Europe, heads of governments often engage in state visits to encourage major export

deals.

(A)

True

(B)

False

57

Restrictive behaviors by governments occur only in developing countries.

(A)

True

(B)

False

58

By deciding to adopt an “ally” strategy, a company can attempt to avoid some risks of

government actions by seeking strategic alliances.

(A)

True

(B)

False

59

Private-sector projects in developing countries may qualify for loans from the World Bank.

(A)

True

(B)

False

60

Most U.S. companies do not do business in Cuba due to

(A)

poor climatic conditions in Cuba

(B)

a long-standing trade embargo on Cuba

(C)

high inflation rates in Cuba

(D)

None of the above

61

Domestication is defined as

(A)

the seizure of an asset without payment

(B)

the seizure of a company with payment

(C)

host-government initiated actions that result in a loss of ownership

(D)

the limiting of certain economic activities to local citizens

62

A target of a grass-roots boycott of foreign products in the Arab world was

(A)

Coca-Cola

(B)

Pepsi

(C)

Sainsbury’s

(D)

All of the above

63

For many years, Coca-Cola was boycotted in

(A)

the Arab world

(B)

Russia

(C)

India

(D)

Mexico

64

What do NAFTA and MERCOSUR have in common?

(A)

They are both South American free trade associations

(B)

They are both economic unions

(C)

They both have a local-content requirement

(D)

They both boycott Cuba

65

Coke decided to abandon its Indian operations in the late seventies because of

(A)

poor sales

(B)

new ownership laws

(C)

local competition

(D)

Pepsi’s entrance into the market

66

Government subsidies are most likely to be given to firms that

(A)

increase national revenue through export sales

(B)

have World Bank guarantees

(C)

improve the national balance of payments by increasing imports

(D)

receive matching funds from the IMF

67

An example of a host country pressure group would be

(A)

expatriates who send home remittances

(B)

local companies threatened by foreign competition

(C)

the German government

(D)

the IMF

68

Nigeria’s hosting of the All-Africa games is an example of

(A)

promoting ideology

(B)

self-preservation

(C)

honoring MFN agreements

(D)

enhancing prestige

69

The main reason countries limit foreign ownership of newspapers, television, and radio

stations is to

(A)

protect national sovereignty

(B)

retaliate for similar restrictions in other countries

(C)

preserve their cultural identity

(D)

protect local companies

70

Sovereignty is defined as the

(A)

inability to pass and enforce laws within a given geographical area.

(B)

freedom given to a firm to pass laws within a given geographical area.

(C)

complete control exercised within a given geographical area.

(D)

None of the above.

71

A country that contains an operational unit of an international company is called a

(A)

home country.

(B)

most favored nation.

(C)

trading partner.

(D)

host country.

72

Islamic law governs all business transactions in the Middle East.

(A)

True

(B)

False

73

Much business law in the Middle East falls under the civil-law tradition.

(A)

True

(B)

False

74

The rise of international terrorism has not had an impact on global marketing.

(A)

True

(B)

False

75

International education has been affected by terrorism.

(A)

True

(B)

False

76

OPIC insurance covers losses due to currency inconvertibility.

(A)

True

(B)

False

77

Protecting national security and cultural identity are some goals of most governments.

(A)

True

(B)

False