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Q:
People in the West tend to associate which of the following with a free market system, strong property rights protection, and economic progress?
A.Anarchist state
B.Representative democracy
C.Planned economy
D.Communist state
E.Command economy
Q:
Due to strong legal protection of property rights, businesses and individuals will:
A.invest more in innovations.
B.face a huge burden from excessive taxation.
C.face more corruption.
D.move away from entrepreneurial activity.
E.run the risk of their profits being expropriated.
Q:
Which of the following creates an environment that is conducive to product and process innovations and to entrepreneurial activity?
A.Communism
B.Centrally planned economy
C.Privatization
D.Command economy
E.Lack of strong property rights
Q:
Which of the following creates an unfavorable environment for innovations and entrepreneurship?
A.Market economy
B.Economic freedom
C.State monopoly in production
D.Privatization
E.Strong legal protection of property rights
Q:
Which of the following statements is true about innovations and entrepreneurship?
A.A command economy creates greater incentives for innovation and entrepreneurship than a market economy.
B.If a country's economy is to sustain long-run economic growth, the business environment must restrict entrepreneurial activity.
C.A high level of entrepreneurial activity leads to a low level of innovation.
D.Innovations in production and business processes lead to an increase in the productivity of labor and capital.
E.Strong legal protection of property rights creates an unfavorable environment for innovation and entrepreneurship.
Q:
Which of the following best exemplifies an entrepreneur?
A.Sam, an employee at a supermarket, is solely responsible for all the purchases and sales at the grocery department.
B.Joe recycles old household articles to build phones, radios, and other things for his personal use.
C.Max makes his living by investing in small companies that have the potential to grow.
D.Javier purchased an invention of his friend to start a company that processes plastic bags into synthetic cloth.
E.Ryan invented an anti-aging formulation and sold it to a major pharmaceutical firm.
Q:
Which of the following is broadly defined as the development of new products, processes, organizations, management practices, and strategies?
A.Privatization
B.Economic deregulation
C.Boundary spanning
D.Innovation
E.Benchmarking
Q:
Which of the following is an indicator of low human development in a country?
A.A score of 0.3 on the HDI scale
B.Rapid "democratization" of political communities
C.Large population due to a highly developed health care system
D.Giving citizens a voice in the important decisions made for the community
E.A higher GNI per capita than the United States
Q:
The Human Development Index comes close to Amartya Sen's conception of how development should be measured, although which of the following, suggested by Sen in his thesis, is not included in the index?
A.Basic health care
B.Political freedom
C.Educational attainment
D.Basic average income
E.Life expectancy at birth
Q:
Which of the following is based on three measures: life expectancy at birth, educational attainment, and average incomes based on PPP estimates?
A.Human Development Index
B.Gross National Income
C.Gross Domestic Product
D.Cost of Living Index
E.Cash Reserve Ratio
Q:
Black economy is most likely to be prevalent when:
A.large amounts of economic activity are in the form of legally recorded cash transactions.
B.people engage in barter agreements to avoid paying taxes.
C.a country's GNI per capita exceeds $30,000.
D.the expenses of the government are less than its income.
E.a country is in trade surplus with another foreign country.
Q:
As a result of which of the following, large amounts of economic activity in India are unrecorded and the official GDP figures of the country fail to tell the entire story of the economy?
A.A large population
B.Active bartering
C.Deregulation
D.Nationalization
E.Closed totalitarianism
Q:
In 2012, if the PPP per capita of China was $9,040 and the PPP per capita of the United States was $52,340, this means that the:
A.GNI per capita was greater in China.
B.percent of goods and services consumed in the United States was lower.
C.standard of living in China was better.
D.cost of living was lower in China.
E.annual average GDP growth rate was lower in China.
Q:
Which of the following statements is true of purchasing power parity (PPP)?
A.PPP figures can be misleading because they don't consider differences in the cost of living.
B.The PPP for different countries is adjusted (up or down) depending upon whether the cost of living is lower or higher than in Great Britain.
C.The PPP data gives a static picture of economic development.
D.China's GNI PPP per capita is higher than that of the United States.
E.PPP adjustment does not allow for a direct comparison of living standards in different countries.
Q:
One can adjust GNI per capita by purchasing power to account for differences in the:
A.cost of living.
B.population density.
C.geographical area.
D.factor endowments.
E.labor productivity.
Q:
Which of the following measures the total annual income received by residents of a country and is regarded as a yardstick for the economic activity of a country?
A.Income elasticity of demand
B.Cash reserve ratio
C.Net cash flow ratio
D.Gross national income
E.Income equity ratio
Q:
One common measure of economic development is a country's:
A.gender ratio.
B.gross national income.
C.infant mortality rate.
D.population density.
E.total geographical area.
Q:
In the context of political economy, the past three decades have seen a general move toward:
A.autocratic forms of government.
B.command-based economic reforms.
C.adoption of legal systems that better enforce property rights.
D.an environment which is unfavorable for international business.
E.military parties monopolizing political power worldwide.
Q:
Social unrest and disorder are less likely to be found in countries that contain more than one ethnic nationality.
Q:
It is more costly to do business in relatively primitive or undeveloped economies because of the lack of infrastructure and supporting businesses.
Q:
In both China and India, the shift toward a command-based economic system has produced large gains despite weak property rights and endemic corruption.
Q:
A country's economic system and property rights regime do not influence the attractiveness of the country as a market or investment site.
Q:
By identifying and investing early in a potential future economic star, international firms build brand loyalty and gain experience in that country's business practices.
Q:
Although free markets and democracy can still be found around the world, the tide has been running in favor of command economies and totalitarian dictatorships.
Q:
In most eastern European nations, the title to urban and agricultural property is often uncertain because of incomplete and inaccurate records, multiple pledges on the same property, and unsettled claims resulting from demands for restitution from owners in the pre-communist era.
Q:
Without a legal system that protects property rights, and without the machinery to enforce that system, the incentive to engage in economic activity can be reduced substantially by private and public entities.
Q:
How do the political, economic, and legal environments of a country affect international trade? And what factors make a country favorable for doing business?
Q:
Briefly discuss product safety and liability laws.
Q:
How do international businesses respond to violations of their intellectual property?
Q:
How do patents, copyrights, and trademarks differ from each other?
Q:
Discuss the philosophy that underlies intellectual property laws.
Q:
What are grease payments? Are they acceptable by the U.S. law and OECD convention?
Q:
How does corruption affect the economic growth rate in a country?
Q:
Describe the Foreign Corrupt Practices Act.
Q:
What are the two ways through which property rights can be violated?
Q:
Describe the significance of Contracts for the International Sale of Goods (CIGS).
Q:
How does a common law system differ from a civil law system?
Q:
Discuss why command economies tend to stagnate.
Q:
Discuss why supply must not be restricted for a pure market economy to function.
Q:
Describe in brief the different forms of totalitarianism.
Q:
What are the various safeguards that are typically enshrined in constitutional law of an ideal representative democracy?
Q:
If a country wants to improve its attractiveness as a place for doing business and as an investment site, it should:
A.oppose the rule of law.
B.ensure that the economic activity is heavily regulated by the state.
C.move toward a market-based system.
D.extensively restrict property rights.
E.avoid enforcing intellectual property laws.
Q:
Which of the following nations is most likely to be unappealing as a place for doing business?
A.A nation that has a market-based economic system
B.A nation that has a strong legal system
C.A nation that has a democratic political institution
D.A nation that enforces strong property rights
E.A nation that has a totalitarian political system
Q:
Veronica had been getting red patches on her face after using a protein-based lotion manufactured by Nature Life Research Lab. On consulting a dermatologist, she learned that the lotion's steroid levels were beyond the standard levels permitted by the government and the damage caused by the lotion was irreversible. Which of the following will address Veronica's grievances?
A.Laws related to property rights
B.Product liability laws
C.Intellectual property laws
D.Foreign Corrupt Practices Act
E.Sarbanes-Oxley Act
Q:
Who among the following can claim product liability from the offender?
A.Jason wants to sue a multinational company for mass manufacturing one of his inventions without purchasing the rights.
B.Rebecca's patented jewelry designs have been imitated and sold at a low price under her brand name.
C.The airbags in Brian's car, manufactured by Zigwheels Inc., failed to inflate when his car met with an accident. This injured Brian and damaged the car.
D.Fred has accused his employer of forcing him and his teammates to work in an unsafe environment.
E.Samantha claims that her neighbor has stolen valuable ancestral antiques from her house.
Q:
Which of the following statements is true about product safety and liability laws?
A.There are no criminal product liability lawsonly civil product liability laws exist.
B.Liability laws are typically most extensive in less developed nations.
C.A boom in product liability suits and awards in the United States resulted in a dramatic decrease in the cost of liability insurance.
D.Product liability can be much greater if a product does not conform to required safety standards.
E.If product safety laws are tougher in a firm's home country than in a host country, the ethical thing to do is to adhere to host-country standards.
Q:
A boom in product liability suits and awards in the United States resulted in a dramatic increase in the cost of liability insurance. Many business executives argue that this:
A.makes American businesses less competitive in the global marketplace.
B.offers American businesses greater protection from foreign competitors.
C.exposes consumers to greater product risks.
D.eventually makes it cheaper for foreign companies to do business in the United States.
E.discourages American companies from outsourcing jobs to less developed countries.
Q:
Which of the following type of laws hold a firm and its officers responsible when a product causes injury, death, or damage?
A.Product equity
B.Product failure
C.Product liability
D.Product parity
E.Product testing
Q:
Product safety and product liability laws are enforced to protect:
A.intellectual property rights.
B.companies from their domestic competitors.
C.companies from their foreign competitors.
D.consumers.
E.product inventors.
Q:
Strong enforcement of intellectual property laws:
A.reduces the piracy (theft) of intellectual property.
B.reduces the attractiveness of a country as a market or investment site.
C.reduces the investments made by companies on basic research.
D.limits creativity and innovation among people.
E.prohibits a company from having a monopoly over its breakthrough inventions.
Q:
In the context of "knowledge" economy of the twenty-first century, which of the following statements is true about intellectual property?
A.Intellectual property has become an increasingly important source of economic value for businesses.
B.Protecting intellectual property has become increasingly easy in the twenty-first century.
C.Intellectual property laws limit the creativity and the ability of people to search for novel ways of doing things.
D.Firms always choose to stay out of countries where intellectual property laws are strict.
E.Companies in a country are more likely to commit themselves to extensive basic research if the country prohibits the use of patents.
Q:
The philosophy behind intellectual property laws is to:
A.reward the originator of a new invention, book, musical record, and the like for his or her idea and effort.
B.protect consumers from being subjected to business malpractice.
C.safeguard a firm and its officers from being responsible for injury, death, or damage caused by the firm's product.
D.eliminate monopoly in international trade.
E.ensure that the rights to manufacture, use, or sell an invention are made available to the whole society.
Q:
Which of the following is a typical function of a trademark?
A.It marks the sales territory for which individual salespeople are assigned.
B.It restrains authors, composers, playwrights, artists, and publishers from trading their creative work.
C.It signifies that a country is a member of the World Trade Organization.
D.It acts as a permit to expand a business globally.
E.It allows merchants or manufacturers to designate and differentiate their products.
Q:
Patents, copyrights, and trademarks establish ownership rights over what type of property?
A.Intellectual
B.Real
C.Tangible
D.Non-performing
E.Stolen
Q:
Which of the following protects the Nike "Swoosh" logo from being used by any other shoe manufacturer?
A.Trademark
B.Affidavit
C.Patent
D.Warrant
E.Writ
Q:
Which of the following is most likely to be protected by a copyright?A.A new manufacturing process invented in a companyB.A newly invented telecommunication deviceC.Tangible property like land and buildingD.Movies produced and directed by a personE.A new type of car invented by an automobile company
Q:
A composer can protect an original musical score from being copied and sold by someone else by acquiring for the score a(n):
A.patent.
B.warrant.
C.trademark.
D.copyright.
E.affidavit.
Q:
Silver Tape Corporation has developed a new type of adhesive tape. Which of the following types of legal protections can grant the company exclusive rights for a defined period to the manufacture, use, or sale of the new adhesive tape?
A.Warrant
B.Patent
C.Copyright
D.Trademark
E.Writ
Q:
Which of the following grants the inventor of a new product or process exclusive rights for a defined period to the manufacture, use, or sale of that invention?
A.Copyright
B.Trademark
C.Patent
D.Warranty
E.Service mark
Q:
Initech Incorporated, a multinational giant, runs a number of diversified businesses. Which of the following can be considered as an intellectual property of the firm?
A.Income arising from renting land and buildings
B.Profits arising from the sale of agricultural crops
C.Interest earned by lending capital to other firms
D.Innovations and capabilities, and skills of the employees
E.Investments made in raw materials and machinery
Q:
Products of the mind, such as computer software, a screenplay, a music score, or the chemical formula for a new drug, constitute:
A.assets which receive no protection under law.
B.non-performing assets.
C.tangible assets.
D.intellectual property.
E.real property.
Q:
Which of the following best exemplifies facilitating or expediting payments in business?
A.Making payments to government officials not to cancel the business license after violating local laws
B.Paying a lump sum amount in order to win a government tender for road construction in a foreign country
C.Making unsolicited payments to the concerned officers in return for employing child labor
D.Making payments to customs officials in order to ship pirated merchandise
E.Making small payments to government officials in order to speed up the work they are already obligated to perform
Q:
As per the U.S. law and OECD convention, which of the following is most likely to be considered as a grease payment?
A.Gold Fire Inc. paid a fine of $2500 for violating the labor laws in a foreign country.
B.Gold Fire Inc. made a small payment of $20 to speed up some paperwork related to tax returns in a less developed country.
C.The proprietor of Gold Fire Inc. made payments to the Mafia as a protection against violent retribution.
D.Gold Fire Inc. gave gift vouchers to all its product wholesalers in order to promote the product.
E.Gold Fire Inc. made an unrecorded payment to one of its accountants in return for window dressing the company's accounts.
Q:
Which of the following does the U.S. law and OECD convention allow as an exception?
A.Bribing a foreign government official to obtain a contract
B.Failure to keep records that would reveal if a violation of the Foreign Corrupt Practices Act has occurred
C.Grease payments or speed money
D.Private action
E.Breach of the rule of law
Q:
In the United States, the Foreign Corrupt Practices Act was passed during the 1970s following revelations that:
A.U.S. companies had bribed government officials in foreign countries in an attempt to win lucrative contracts.
B.U.S. companies were involved in bribing U.S. government officials in cases related to major corporate and accounting scandals.
C.U.S. government bureaucrats demanded bribes from U.S. companies in return for a permit to operate in a foreign country.
D.several companies were selling their products at lower prices in foreign countries than in the United States.
E.successful business owners in the United States often had to pay "protection money" to the Mafia or face violent retribution.
Q:
Which of the following terms best defines the relationship between the level of corruption and economic growth rate in a country?
A.Directly proportional
B.Inversely proportional
C.Independent
D.Positive correlation
E.Zero correlation
Q:
The Republic of Marwa has decided to open its economy to globalization. Which of the following will facilitate this decision of Marwa?
A.A strong commitment to communism
B.A strong presence of private action in the nation
C.Adopting the Contracts for the International Sale of Goods (CIGS)
D.Creating a national environment that promotes public action
E.Breaking the rule of law
Q:
Which of the following best exemplifies public action?
A.The mafia in Cedia Republic demands "protection money" from successful domestic business owners.
B.Cedian proprietors in the hospitality industry often complain about protection rackets by criminal groups.
C.Government bureaucrats demand bribes from international businesses in return for the rights to operate in Cedia Republic.
D.The Cedian government has been criticized for its inability to curb theft of trade secrets of international businesses by private domestic owners.
E.To promote the Cedian culture, the government has made Cedian movies, which are based on Cedian history, tax-free.
Q:
In the context of property rights, which of the following best exemplifies private action?
A.Levying excessive taxes
B.Requiring expensive licenses or state permits from private property holders
C.Taking assets into state ownership without compensating the owners
D.Government bureaucrats demanding bribes from businesses in return for the rights to operate in a country
E.Business owners stealing their competitors' trade secrets and intellectual properties
Q:
After the collapse of communism in Dehran, successful business owners often had to pay "protection money" to the mafia or face violent retribution. In the context of property rights, the behavior of the mafia is an example of:
A.active violation.
B.public action.
C.private action.
D.boundary spanning.
E.industrial espionage.
Q:
In the context of property rights, which of the following refers to theft, piracy, blackmail, and the like by private individuals or groups?
A.Private consumption
B.Private practice
C.Privacy tort
D.Private action
E.Privacy violation
Q:
The bundle of legal rights over the use to which a resource is put and over the use made of any income that may be derived from that resource are called what type of rights?
A.Civil
B.Political
C.Shareholder
D.Property
E.Public
Q:
When firms do not wish to accept the rules of the CIGS, what do they often opt for to settle contract disputes?
A.UN involvement
B.Arbitration
C.Collective bargaining
D.The common law system of the United States
E.Islamic law
Q:
Which of the following establishes a uniform set of rules governing certain aspects of the making and performance of everyday commercial contracts between sellers and buyers who have their places of business in different nations?
A.Contracts for the International Sale of Goods
B.Bill of Exchange
C.United Nations Charter
D.International Forwarding Agent Contract
E.International Promissory Note
Q:
Which of the following statements is true about the difference between contracts in common law and civil law systems?
A.Contracts drafted under a common law system tend to be longer than those drafted under a civil law system.
B.Contracts drafted under a civil law system tend to be more specific than those drafted under a civil law system.
C.It is more expensive to draw up contracts in a civil law system than in a common law system.
D.Resolving contract disputes tends to be less adversarial in common law systems than in civil law systems.
E.Civil law systems have the advantage of greater flexibility and allow for judges to interpret a contract dispute in light of the prevailing situation but this feature is absent in common law systems.
Q:
Which of the following refers to documents that specify the conditions under which an exchange is to occur and detail the rights and obligations of the parties involved?
A.Memoranda
B.Manifestoes
C.Contracts
D.White papers
E.Minutes
Q:
Jewish law is an example of what type of law system?
A.Autocratic
B.Civil
C.Common
D.Theocratic
E.Universal
Q:
Which of the following is true about the three main types of legal systems?
A.Judges under a civil law system have more flexibility than those under a common law system.
B.The common law system evolved in the United States over hundreds of years.
C.Although Islamic law is primarily concerned with moral behavior, it has been extended to cover certain commercial activities.
D.A theocratic law system is based on a detailed set of laws organized into codes.
E.Common law cannot be altered, clarified, or amended to deal with new situations.
Q:
What is the most widely practiced theocratic legal system in the modern world?
A.Christian law
B.Islamic law
C.Jewish law
D.Hindu law
E.Buddhist law
Q:
A legal system which is based primarily on religious teachings is referred to as a:
A.civil law system.
B.theocratic law system.
C.common law system.
D.precedent law system.
E.public law system.