Busa Chpt. 6
Chpt
Chapter 6 Political and Legal Systems in National Environments
MULTIPLE-CHOICE QUESTIONS
For each of the following choose the answer that most completely answers the question.
WHAT IS COUNTRY RISK?
1. What is the primary reason that some firms decide to enter foreign markets through FDI instead of exporting? a. government-imposed import tariffs b. legal systems which prohibit imports c. extensive customs bureaucracy d. competition among exporters
(a; p. 160; concept; Learning Objective 1; moderate)
2. All of the following are ways that firms can benefit from a foreign market’s political and legal systems except ________. a. tax holidays b. subsidies c. legal protection d. cash incentives
(c; p. 160; concept; Learning Objective 1; moderate)
3. A company’s potential loss of profitability caused by a nation’s political or legal setting is known by which of the following terms? a. commercial risk b. currency risk c. cross-cultural risk d. country risk
(d; p. 160; concept; Learning Objective 1; moderate)
4. Each of the following could be considered intellectual property except ________. a. stock b. trademark c. TV script d. invention
(a; p. 161; concept; Learning Objective 1; easy)
5. Which of the following situations would raise country risk the most? a. inflation b. civil war c. elections d. stock market
(b; pp. 162-163; concept; Learning Objective 1; moderate)
6. Which of the following helps explain why India was once characterized by high country risk? a. Taxes and financial incentives benefit Indian businesses over foreign firms. b. Indian business leaders distrust most European corporations. c. Political leaders enacted laws targeted against foreign firms. d. Indian leaders fear the modern influences of American firms.
(c; pp. 162-163; concept; Learning Objective 1; difficult; AACSB: Analytic Skills)
7. Which
Chapter 6 Political and Legal Systems in National Environments
MULTIPLE-CHOICE QUESTIONS
For each of the following choose the answer that most completely answers the question.
WHAT IS COUNTRY RISK?
1. What is the primary reason that some firms decide to enter foreign markets through FDI instead of exporting? a. government-imposed import tariffs b. legal systems which prohibit imports c. extensive customs bureaucracy d. competition among exporters
(a; p. 160; concept; Learning Objective 1; moderate)
2. All of the following are ways that firms can benefit from a foreign market’s political and legal systems except ________. a. tax holidays b. subsidies c. legal protection d. cash incentives
(c; p. 160; concept; Learning Objective 1; moderate)
3. A company’s potential loss of profitability caused by a nation’s political or legal setting is known by which of the following terms? a. commercial risk b. currency risk c. cross-cultural risk d. country risk
(d; p. 160; concept; Learning Objective 1; moderate)
4. Each of the following could be considered intellectual property except ________. a. stock b. trademark c. TV script d. invention
(a; p. 161; concept; Learning Objective 1; easy)
5. Which of the following situations would raise country risk the most? a. inflation b. civil war c. elections d. stock market
(b; pp. 162-163; concept; Learning Objective 1; moderate)
6. Which of the following helps explain why India was once characterized by high country risk? a. Taxes and financial incentives benefit Indian businesses over foreign firms. b. Indian business leaders distrust most European corporations. c. Political leaders enacted laws targeted against foreign firms. d. Indian leaders fear the modern influences of American firms.
(c; pp. 162-163; concept; Learning Objective 1; difficult; AACSB: Analytic Skills)
7. Which