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WorksheetsInternational Business Ch. 4
Total questions: 25
Worksheet time: 13mins
When countries join together to eliminate duties and other trade barriers, allow companies to invest freely in each other’s country, and allow workers to move freely across borders, they are said to have
Free-Trade Zones
Most favored nation status
A free trade agreement
A common market
A tax that can be used as a trade barrier is the
Personal tax
Excise tax
Value-added tax
Import duty tax
The most serious form of political risk for a multinational company is
Privatizaiton
Exproptriation
Import quotas
Double taxation
Governments privatize their state-owned companies to
Provide tax incentives to their exporting companies
Make these companies more efficient and profitable
Create free-trade agreements
Establish foreign-trade zones
In 1979, the Shah of Iran was overthrown and a new government was established. This government immediately seized control of all US companies and assets in Iran. This is an example of
Privatization
Expropriation
Commercial Risk
Granting most favored nation status
A US company can obtain political risk insurance on an overseas subsidiary or investment from
The US Dept of Agriculture
The US Dept. of Commerce
The Overseas Private Investment Corporation
Free-trade agreements
A US company can obtain political risk insurance on its export shipments from
The US Dept of Agriculture
The Export-Import Bank of the United States
The Overseas Private Investment Corporation
Free-trade agreements
If the United States placed a trade embargo on a foreign country
Quotas would be placed on all goods entering the US
No products could be traded between the US and the foreign country
All businesses owned by the foreign government in the US would be privatized
The US would have granted most favored nation status to this foreign country
Of the following characteristics, the one that is not typical of a democratic system is that
Individuals have the freedom to own and operate private businesses.
Individuals can build a small business into a very large business
The economy is usually a command economy
Individuals may travel freely to other countries
A political system in which one political party holds all the power and prohibits members of other parties from participating is a
Democracy
Totalitarian
Exclusive system
None of these
A multinational enterprise is not acting with social responsibility if it
Installs anti-pollution controls more powerful than required by law
Hires host-country citizens and provides training
Introduces new products that support dominant religious beliefs of the host
Hires all employees from the home country labor force
Tariffs, quotas, and boycotts are examples of
Civil Unrest
Political Unrest
Trade Barriers
Non of these
Value-added and excise taxes are taxes on
The sale of goods
Corporate income
Payroll
None of these
Protectionism policies such as tariffs and quotas are used because
The government wants to make it harder for companies in other countries to compete with local companies
Consumers need to be protected from inferior or hazardous products
The country needs additional revenue
Governments encourage and promote its country’s exports primarily because
Exports increase government revenues by selling export insurance
Exports increase the country’s international image and reputation
Exports create jobs and foster economic prosperity
When two countries agree to eliminate duties and trade barriers on products traded between them, they have
Free-trade zones
Most favored nation status
A free trade agreement
The three types of political systems are Democracy, Totalitarianism, Mixed Systems
True
False
Examples of political risk include
Trade sanctions
Expropriation
Economic Nationalism
Civil Unrest or War
All of them
Import quotas are used to help protect domestic companies from foreign competition.
True
False
A democracy is a political system in which all citizens take part in making the rules that govern them.
True
False
Value added tax is added only when the final product is sold to the consumer.
True
False
Absolute restriction on the import of certain products from certain countries is called
Quota
Trade Embargo
Protectionism
Boycott
The government takeover of a foreign-owned business is called
Expropriation
Protectionism
Political Status
Boycott
An agreement between countries that eliminates duties and trade barriers on products traded among members
Social Responsibility
Free-Trade Agreement
Trade Embargo
Tax Holiday
A tax on imported products
Quota
Trade Embargo
Common Market
Duty
