Which of the following is most likely to be at the top of the list it should be concerned with?

An American business wants to enter a foreign market, but it is concerned with how political issues may affect the

business. Which of the following is most likely to be at the top of the list it should be concerned with?

Multiple Choice

• the existence of voluntary export restrictions
• the practice of acculturation
• the presence of nongovernmental organizations
• the existence of cyberterrorism
• the instability of prevailing government policies

When a Chinese company tried to purchase Unocal, it was perceived by some in the U.S. as

Multiple Choice

• a threat to sovereignty.
• an avenue for illegal immigration.
• a drain on the economy.
• a potential devaluing of the dollar.
• a sign that the Chinese economy was stronger than the U.S. economy.

Changes in governments or ruling political parties can affect businesses. The main concern of a multinational corporation is

Multiple Choice

• change in the economic risk.
• access to open markets.
• the continuity of the set of rules, codes of behaviors, and the rule of law.
• which government is in power.
• the exchange rate and trade policies.

A country is ruled by one woman alone. This country’s form of government is most likely a(n)

Multiple Choice

• oligarchy.
• monopoly.
• democracy.
• dictatorship.
• aristocracy.

Economic nationalism has what effect on international relations?

Multiple Choice

• It causes countries to be more economically interdependent, which affects trade policies.
• It makes national security and interest more important than international relations.
• Nationalist feelings lead to loss of control over foreign investment.
• Economic nationalism does not affect international relations.
• It invites foreign investment as a means of shoring up the national economy.

What political risk is occurring when a government decides to take over a business without paying for it?

Multiple Choice

• nationalization
• expropriation
• restriction
• confiscation
• privatization

Expropriation may result in

Multiple Choice

• assets being seized by the International Trade Administration.
• a more gradual change than domestication.
• assets becoming a government-run entity.
• assets being insured by the Overseas Private Investment Corporation.
• seizing a company’s assets without payment.

Confiscation, expropriation, and domestication are classified as ________ risks.

Multiple Choice

• political
• social
• market
• environmental
• pricing

Countries, such as South Korea and Singapore, now view foreign investment as

Multiple Choice

• a political risk to the country receiving the investment.
• a path to economic growth.
• a way to learn new technologies to make local companies more successful.
• an environmental danger.
• a drag on pricing in the industries that receive the investment.

Exchange controls are most likely imposed by a country

Multiple Choice

• when there is a substantial amount of capital leaving the country.
• when it is required that a portion of any product sold within the country contain locally made parts.
• when there are no adequately developed sources of supply within the country.
• when there is a drop in the price of essential products that command considerable public interest in the country.
• when there is an abundance of foreign exchange in the country.

To control the cost of living in a country during inflationary periods, what may be applied to essential products that command considerable public interest?

Multiple Choice

• price controls
• exchange controls
• antidumping duties
• import restrictions
• local-content laws

After Russia’s interference in the U.S. election, Congress issued ________ against the country.

Multiple Choice

• trade sanctions
• an injunction
• a freeze on bank accounts
• an expulsion of Russian citizens
• a travel ban

The Export-Import Bank provides

Multiple Choice

• aid to underdeveloped countries and has limited protection in support of “essential” projects in approved countries and for approved products.
• credit insurance that minimizes nonpayment risk caused by financial, economic, or political uncertainties.
• a means to helping U.S. business compete in the global marketplace.
• underwriting of trade and investments for U.S. firms.
• risk insurance for companies investing in less-developed countries.

The International Trade Administration provides

Multiple Choice

• aid to underdeveloped countries and has limited protection in support of “essential” projects in approved countries and for approved products.
• credit insurance that minimizes nonpayment risk caused by financial, economic, or political uncertainties.
• a means to helping U.S. business compete in the global marketplace.
• underwriting of trade and investments for U.S. firms.
• risk insurance for companies investing in less-developed countries.

The International Trade Administration provides

Multiple Choice

• aid to underdeveloped countries and has limited protection in support of “essential” projects in approved countries and for approved products.
• credit insurance that minimizes nonpayment risk caused by financial, economic, or political uncertainties.
• a means to helping U.S. business compete in the global marketplace.
• underwriting of trade and investments for U.S. firms.
• risk insurance for companies investing in less-developed countries.

The International Trade Administration provides