1.
The powers exercised by a state in relation to other countries and the supreme powers exercised over its citizens is described by the term:
A.
sovereignty.
B.
independence.
C.
isolation.
D.
democracy.
2.
The acceptance of the terms of the NAFTA agreement:
A.
was enforced upon signatory nations by the United States.
B.
represented a voluntary abridgement of the sovereign rights of signatory states.
C.
was forced upon Japan and Germany following World War II.
D.
signifies the weakness of signatory states.
3.
The ability of multinational corporations to survive and profit, even under the most extreme of governments, as long as there is at least some long-run productability and stability is best exemplified by:
A.
GM in Germany.
B.
PepsiCo in Russia.
C.
McDonald's in China.
D.
IBM in Cuba.
4.
The intense pride the people hold for their country is best described as:
A.
sovereignty.
B.
nationalism.
C.
isolationism.
D.
colonialism.
5.
Feelings of economic nationalism may be expressed in:
A.
tariffs.
B.
import restrictions.
C.
exhortations to buy only domestic products.
D.
All of the above.
6.
Which of the following represents the MOST severe form of political risk?
A.
import restrictions
B.
price controls
C.
exchange controls
D.
forced equity transfers
7.
The seizing of a company's assets without payment is called:
A.
domestication.
B.
expropriation.
C.
confiscation.
D.
nationalism.
8.
Which of the following describes the act of a foreign government seizing the assets of a multinational corporation with only a partial reimbursement of their value?
A.
confiscation
B.
nationalism
C.
domestication
D.
expropriation
9.
The transfer of foreign investments to national control and ownership through a series of government decrees is called:
A.
expropriation.
B.
nationalism.
C.
domestication.
D.
confiscation.
10.
The ultimate goal of domestication is to:
A.
sell off foreign-owned assets at a profit.
B.
punish foreign firms for violation of domestic laws.
C.
to share more ownership and management with nationals.
D.
pirate foreign technology.
11.
The shortage of funds available for foreign trade is at the root of:
A.
expropriation.
B.
exchange controls.
C.
confiscation.
D.
domestication.
12.
Some nations require any product sold within the country to contain domestic components under:
A.
tax controls.
B.
local-content laws.
C.
price controls.
D.
import restrictions.
13.
Host governments may enforce local-content requirements by enforcing:
A.
tax controls.
B.
price controls.
C.
import restrictions.
D.
nationalistic labor programs.
14.
One nation may "punish" another by stopping all trade with it by imposing:
A.
price controls.
B.
local-content laws.
C.
import restrictions.
D.
boycotts.
15.
The America-First Corporation is considering entry into several Latin American and Middle Eastern countries. As part of its decision-making activity, the firm should:
A.
conduct a political risk assessment.
B.
petition the U.N. for political immunity.
C.
bribe governmental officials to ensure favorable treatment.
D.
establish only "screwdriver operations".
16.
Good corporate citizenship requires that American firms do all of the following EXCEPT:
A.
act as a "good guest" in the host company.
B.
share the benefits of the enterprise with the host country.
C.
attempt to Americanize the host company.
D.
provide cultural training for its executives.
17.
An MNC may reduce its financial and political risk in a host country by sharing those risks with a domestic company through the use of:
A.
import controls.
B.
a joint venture.
C.
local-content laws.
D.
loss insurance.
18.
Which of the following eliminates almost all forms of political risk?
A.
licensing
B.
joint ventures
C.
expanding the investment base
D.
domestic control of marketing and distribution
19.
The America-First Corporation conducts business in several politically hostile nations. Given the high risk of loss of assets, the firm is MOST likely to prefer:
A.
expropriation.
B.
confiscation.
C.
planned domestication.
D.
nationalization.
20.
Which of the following U.S. government agencies is MOST directly charged with assisting American firms overseas?
A.
the United Nations
B.
the Agriculture Department
C.
the Department of the Treasury
D.
the Department of Commerce
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