Deck 4: The Legal Environment

Question 1

Bulhevia,a country in Western Europe,has policies and regulations that govern politics and commercial transactions and punish crime.These policies and regulations are based on fairness and justice as they are understood by the people being governed.This scenario exemplifies _____.

A)autocracy
B)the rule of the individual
C)the rule of law
D)anarchy

Answer 1

C

Question 2

Kilepis,a country in Eastern Europe,operates under common law.It can be said that,in Kilepis,judges:

A)rule on cases by relying on the legal code and stare decisis.
B)are bound by a written constitution and detailed statutory code that is always binding.
C)translate the law into legal principles and regulatory statues.
D)are not bound by earlier precedents.

Answer 2

A

Question 3

In a survey conducted on the rule of law index by the World Justice Project,Ismeria,a country in Western Europe,received a high score.Given the information,which of the following is most likely to be true of Ismeria?

A)The rule of law in Ismeria reduces transactional risks,such as fraud,negligence,and bad debts.
B)The rule of law in Ismeria gives companies the discretion to set and enforce laws.
C)The rule of law in Ismeria varies according to the status of any who violate the law.
D)The rule of law in Ismeria states that the president of Ismeria is the ultimate authority.

Answer 3

A

Question 4

Chigerk,a country in West Africa,is governed by customary law.It can be said that in Chigerk,_____.

A)judges are bound by a written constitution and detailed statutory code that is always binding
B)laws are derived from long-standing experience and practice,based on collective wisdom and shared philosophy
C)laws rely on religious doctrine and belief and are adjudicated by religious leaders
D)judges interpret law and set precedent for subsequent interpretation and usage

Question 5

On 2nd October 2017,Oceana Inc.made a contract with Cypher Inc.to deliver one ton of iron ore by 16th October 2017.However,Oceana Inc.failed to fulfill the contract obligations.Oceana Inc.is punishable under the _____.

A)administrative law
B)constitutional law
C)commercial law
D)criminal law

Question 6

Liberis,a country in East Africa,operates under a system of law that aims to prevent litigation and promote confidence in transactions.The law has ancient Roman origins.Under this law,judges in Liberis are bound not by earlier rulings,but by a written constitution and detailed statutory code that is always binding.Given this information,it can be said that Liberis operates under _____.

A)commercial law
B)common law
C)civil law
D)theocratic law

Question 7

In Kiserk,a country in Central America,a body of law sets the bounds of government and governmental procedures,including creating the authorities that establish laws.Given this information,it can be said that this body of law is the _____.

A)theocratic law
B)procedural law
C)commercial law
D)constitutional law

Question 8

The United Kingdom,the United States,and Australia are examples of countries that rely on _____.

A)customary law
B)common law
C)theocratic law
D)civil law

Question 9

_____ describes laws specifying the rights and duties of individuals in their business dealings,how businesses are created and organized,and how business is transacted.

A)Administrative law
B)Constitutional law
C)Public law
D)Commercial law

Question 10

_____ describes laws and punishments that regulate social conduct and provide personal,property,and human rights protections.

A)Constitutional law
B)Criminal law
C)Commercial law
D)Administrative law

Question 11

In Jiledina,a country in Southern Europe,laws are based on Christian doctrines.The laws of the country govern crime,politics,business contracts,and religious observances.Given this information,it can be said that Jiledina operates under _____.

A)commercial law
B)customary law
C)common law
D)theocratic law

Question 12

Desmond has been charged with assault.He is punishable under _____.

A)criminal law
B)constitutional law
C)commercial law
D)administrative law

Question 13

Bella,a professor at the University of California,believes that the rule of law promotes international business.Which of the following statements supports her beliefs?

A)The rule of law varies according to the status of any who violate the law.
B)The rule of law puts a check on governmental power in a country.
C)The rule of law gives companies the discretion to set and enforce laws.
D)The rule of law states that the president is the ultimate authority.

Question 14

_____ sets the boundaries and rights that define community members' relationships to each other.

A)Customary law
B)Theocratic law
C)Common law
D)Civil law

Question 15

Stanley and Charles conspired to set fire to their employer's manufacturing plant.They were charged with arson.They are punishable under _____.

A)commercial law
B)criminal law
C)constitutional law
D)administrative law

Question 16

Neptune Inc. ,an American consumer electronics company,wants to start its operations in Javaheria,a country in South America.Javaheria has a low degree of rule of law.Given this information,it can be said that:

A)Javaheria has business laws based on fairness and justice as these concepts are understood by the companies operating in the country.
B)Javaheria has laws that specify that justice is indifferent to the status of any who violate the law.
C)Neptune Inc.is more likely to face the risk of having its overseas property and goods confiscated at the whim of a politician.
D)Neptune Inc.is less likely to face transactional risks,such as fraud,negligence,and bad debts,associated with international transactions.

Question 17

Julio is a popular movie star in Gisonia,a country in Southern Europe.He was recently involved in a bar fight and was charged with battery.Julio faced the same consequences for the crime he committed as the rest of the country's general population.This scenario exemplifies _____.

A)arbitration
B)diplomatic immunity
C)the rule of the individual
D)the rule of law

Question 18

Kilausi,a country in Eastern Europe,has agreed to abide by laws that supersede the laws of all countries in the world.Given this information,it can be said that the laws that are binding on Kilausi and other countries are the _____.

A)civil laws
B)international laws
C)theocratic laws
D)customary laws

Question 19

In Tanzeria,a country in East Africa,Hoshikimu is considered the supreme leader.He is the ultimate authority and has discretion to set and enforce laws in Tanzeria.This scenario exemplifies _____.

A)the rule of the individual
B)the rule of law
C)a socialist economic system
D)a democratic government

Question 20

_____ is adjudicated by religious leaders.

A)Customary law
B)Common law
C)Theocratic law
D)Civil law

Question 21

The Commerce Coalition is an intergovernmental organization operating in Europe that consists of 20 member nations.It has adopted laws that regulate the movement of goods,services,and capital across the borders of member nations.These laws also define industrial policies.These laws take precedence over national laws of member states.Given this information,it can be said that these laws are _____.

A)private international laws
B)supranational laws
C)public international laws
D)theocratic laws

Question 22

In the context of international business,unlike firms that are proactive,firms that are reactive _____.

A)seek to build capabilities that build a reputation for ethical conduct
B)seek to build capabilities that let them quickly respond to social pressures
C)seek to become market leaders in their industries
D)engage in corporate social responsibility (CSR)initiatives

Question 23

Neon Inc. ,a Canadian electric power company,discharges its industrial waste in compliance with the Canadian environmental regulations.Given this information,it can be said that Neon Inc.'s actions are:

A)ethical but illegal
B)illegal and unethical
C)ethical and legal
D)legal but unethical

Question 24

In Chiresia,a country in Western Africa,the government controls the right to mine all the minerals under the surface of land irrespective of who owns the land.This scenario illustrates that the government of Chiresia has denied _____ to land owners.

A)political rights
B)riparian rights
C)property rights
D)suffrage rights

Question 25

Citrus Inc. ,an American beverage company,operates in Talberia,a country in Southern Africa.It manufactures and sells an energy drink under the brand name ProActive.Recently,a lawsuit was filed against Citrus Inc.claiming that ProActive contains high levels of taurine,an organic compound,which can pose potential health risks.In which of the following ways can Citrus Inc.safeguard its interests?

A)By following a standard business strategy for domestic and overseas operations
B)By increasing its foreign investment in Talberia
C)By tailoring its offerings to meet customer needs
D)By proactively managing product-safety liability concerns

Question 26

Polikesa,a country in North Africa,has vast reserves of uranium.However,due to strict business laws in Polikesa,most international firms are skeptical of starting mining operations in the country.Which of the following techniques can Polikesa use to attract foreign investment?

A)By following a fixed exchange rate
B)By nationalizing all industries
C)By increasing its imports
D)By making regulatory reforms

Question 27

Omega Inc. ,an American semiconductor company,made a contract with Delta Inc. ,a Canadian computer manufacturing company,on 25th September 2017,to manufacture and deliver 1,000 chipsets on 3rd October 2017.However,Omega Inc.failed to deliver the chipsets on the agreed date.Omega Inc.wants to avoid a lawsuit and reach a settlement outside the courts.Delta Inc.agrees to consult a third party to reach a binding decision.Given this information,it can be said that Omega Inc.and Delta Inc.are engaged in _____.

A)deregulation
B)arbitration
C)customization
D)subsidization

Question 28

Which of the following is true of regulations governing international business?

A)Those countries with complicated laws tend to be wealthy.
B)When countries improve their laws,they likely open up more opportunities for business in the country.
C)There is a low correlation between efficient,effective regulation and the wealth of a nation.
D)Countries can attract foreign investment by nationalizing their industries.

Question 29

A group of pirates from Sukleis,a country in Southern Europe,seized an oil tanker for ransom,off the Mediterranean Sea.The oil tanker belonged to Kidero,another country in Southern Europe.The pirates were captured by the navy of Kidero.In the context of international law,it can be said that:

A)the nationality of the victims is an invalid basis for assigning jurisdiction.
B)the costs of prosecuting the captured pirates are less.
C)the captured pirates can be prosecuted under the law of the sea.
D)the captured pirates cannot claim asylum under any circumstances.

Question 30

Acacia Inc. ,a pharmaceutical company,has developed a miracle drug that can cure breast cancer.This invention by Acacia Inc.is an example of _____.

A)intellectual property
B)an embargo
C)arbitrage
D)a sustainable product

Question 31

In Kiseria,a country in South Asia,labor laws require laborers to work in factories for 12 hours a day.Atlas Inc. ,a mining company,is planning to open its operations in Kiseria.However,Atlas Inc.feels that laborers are being exploited by making them work for unusually long hours.This scenario illustrates that Kiseria's labor practices are:

A)ethical but illegal
B)illegal and unethical
C)ethical and legal
D)legal but unethical

Question 32

_____ is the process of reaching a binding decision by a third party outside the courts.

A)Customization
B)Subsidization
C)Arbitration
D)Deregulation

Question 33

In contrast to public international law,private international law:

A)establishes legal jurisdiction and procedures for people and organizations,including businesses.
B)governs the interactions of nation-states,including war,criminal law,law of the sea,refugee law,and human rights law.
C)limits the rights of sovereign governments.
D)is derived from long-standing experience and practice,based on collective wisdom and shared philosophy.

Question 34

Octagon Inc. ,is an American oil company.It uses the process of hydraulic fracturing for drilling natural gas from several thousands of feet below the surface of the Earth.Although hydraulic fracturing complies with business regulations,Octagon Inc.has faced angry protests from environmental groups who claim that this process adversely affects the environment.Given this information,it can be said that Octagon Inc.'s actions are:

A)ethical but illegal
B)illegal and unethical
C)ethical and legal
D)legal but unethical

Question 35

Chimelia,a country in West Africa,has declared war on its neighboring country of Hinelis.Which of the following laws is most likely to govern the war between the two nations?

A)Theocratic law
B)Supranational law
C)Private international law
D)Public international law

Question 36

In Kisomil,a country in South Asia,foreign companies can have only 42 percent of ownership of a company in an industry.This scenario illustrates _____.

A)arbitration
B)market segmentation
C)arbitrage
D)global regulation

Question 37

Any creation of the human mind is known as _____.

A)intellectual property
B)an embargo
C)arbitrage
D)a sustainable product

Question 38

Mica Inc. ,an American mining company,issued false financial statements to evade taxes.Given this information,it can be said that Mica Inc.'s actions are:

A)ethical but illegal
B)illegal and unethical
C)ethical and legal
D)legal but unethical

Question 39

_____ are the moral principles of right and wrong that guide personal and organizational decision making.

A)Customs
B)Sanctions
C)Ethics
D)Tariffs

Question 40

Rivera Inc. ,an American consumer electronics company,strives to ensure that all its business practices are morally right.It has an employee-friendly work environment.Its employees are required to work for eight hours per day,and they get paid well when they work overtime.This scenario illustrates that Rivera Inc._____.

A)engages in sustainable business practices
B)has ethical policies
C)uses arbitration
D)has a hierarchical organizational structure

Question 41

Waldorf Inc. ,an oil company,is faced with an ethical dilemma of whether or not to continue to use the process of hydraulic fracturing to drill petroleum from thousands of feet below the surface of the Earth.The company is facing social pressures from environmental groups to discontinue the process of hydraulic fracturing as it has adverse effects on the environment.Waldorf Inc.wants to use a proactive approach to deal with these social pressures.In which of the following ways can Waldorf Inc.improve its reputation as a highly ethical company?

A)By creating new mission and vision statements
B)By developing strategies to minimize the damage to the firm
C)By building capabilities to quickly respond to these social pressures
D)By engaging in corporate social responsibility (CSR)initiatives

Question 42

Do you think sustainable business practices can help an international company reinforce its image as an environmentally responsible firm? Give reasons to support your answer.

Question 43

In 1988,the _____ was expanded to cover foreign companies that operate in or have securities (stocks or bonds)listed in the United States.

A)Foreign Corrupt Practices Act
B)Corruption of Foreign Public Officials Act
C)Foreign Business Act
D)Foreign Exchange Management Act

Question 44

Which of the following is true of the Foreign Corrupt Practices Act (FCPA)?

A)It does not ban payments to win contracts.
B)It does not ban facilitation payments.
C)It was signed into law by President Gerald Ford.
D)It was expanded in 1988 to cover domestic companies.

Question 45

The _____ is a law signed by President Jimmy Carter in 1977 that made it illegal to pay foreign government officials for their assistance in obtaining or retaining business.

A)Foreign Corrupt Practices Act
B)Corruption of Foreign Public Officials Act
C)Foreign Business Act
D)Foreign Exchange Management Act

Question 46

Many organizations are now turning to practices that reduce waste,recycle metal,glass,plastics,and electronics,and cut greenhouse gas emissions.These practices are called _____ business practices.

A)futuristic
B)sustainable
C)unethical
D)profitable

Question 47

In Ligedia,a country in East Asia,factory workers are exposed to dangerous work conditions.Although such a practice is unethical,it is not considered illegal.Maple Inc. ,a Canadian mining company,is planning to start its operations in Ligedia.Which of the following actions should Maple Inc.take to proactively deal with the ethical situation?

A)It should focus more on staying within the legal limits.
B)It should build capabilities that would enable it to quickly respond to the ethical situation.
C)It should establish strong guidelines to direct global actions toward employees,communities,and customers.
D)It should engage in actions that attempt to minimize the damage to the firm.

Question 48

Actions by proactive firms seek to maximize their _____.

A)profit
B)reputation
C)market share
D)efficiency

Question 49

Do you think international businesses can face challenges with respect to human rights? Give reasons to support your answer.

Question 50

Justify the argument that countries with easy-to-understand and easy-to-enforce regulations tend to be wealthy,whereas countries with complicated rules tend to be poor.

Question 51

In the United States,the _____ regulates all forms of online advertising,data collection,and sales,and imposes penalties for companies making false claims or violating customers' rights.

A)International Trade Administration
B)U.S.Trade and Development Agency
C)National Trade Council
D)Federal Trade Commission

Question 52

Taupe Inc. ,an American software company,uses recycled paper for its documents.It encourages its employees to print documents only when necessary.The company also uses a digital filing system to minimize the use of paper documents.This scenario illustrates that Taupe Inc.is engaged in:

A)organizational restructuring.
B)sustainable business practices.
C)global branding.
D)philanthropic activities.

Question 53

Do you think it is incumbent on international businesses to determine their property rights in any given country? Give reasons to support your answer.

Question 54

One of the biggest cases involving the Foreign Corrupt Practices Act was the _____.

A)Enron scandal
B)Siemens bribery scandal
C)Hewlett-Packard spying scandal
D)Harken Energy scandal

Question 55

In the context of international business,unlike firms that are reactive,firms that are proactive _____.

A)seek to build capabilities that build a reputation for ethical conduct
B)seek to build capabilities that let them quickly respond to social pressures
C)engage in actions that attempt to minimize damage to their reputation
D)avoid engaging in corporate social responsibility (CSR)initiatives

Question 56

_____ are payments made to speed up the actions that government officials are already bound to perform.

A)Mortgage payments
B)Down payments
C)Facilitation payments
D)Royalty payments

Question 57

The rights that belong to every person are called _____.

A)suffrage rights
B)property rights
C)riparian rights
D)human rights

Question 58

According to you,should international businesses use a reactive or proactive approach to deal with ethical dilemmas? Give reasons to support your answer.

Question 59

Using responsible packaging for products is an example of a _____.

A)business regulatory reform
B)global branding strategy
C)sustainable business practice
D)product liability suit

Question 60

Do you think an international business can take an action that is legal,but also unethical? Give reasons to support your answer.

Question 61

Do you think global companies should take measures to ensure that customers' data privacy is maintained? Give reasons to support your answer.

Question 62

Do you think companies should be required to share personal Internet activities with third parties? Give reasons to support your answer.