CHAPTER 4 QUIZ
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CHAPTER 4 QUIZ

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Questions and Answers

What distinguishes civil law from theocratic law?

  • Civil law is based on a legal code, while theocratic law is based on religious teachings. (correct)
  • Civil law is based on religious doctrine.
  • Theocratic law is more adaptable to societal changes.
  • Theocratic law provides a detailed set of rules.
  • Which of the following is NOT considered a key legal issue for international businesses?

  • Government fiscal policy (correct)
  • Product liability laws
  • Intellectual property protection
  • Antitrust laws
  • How can businesses effectively manage political risk?

  • Underestimating the importance of compliance
  • Ignoring local political climates
  • Prioritizing profit over ethics
  • Incorporating risk into business strategies (correct)
  • What is a characteristic of macro political risk?

    <p>It threatens all companies alike.</p> Signup and view all the answers

    Which of the following best describes the concept of purchasing power parity?

    <p>The ability of different currencies to purchase an equal basket of goods.</p> Signup and view all the answers

    What form of property seizure involves compensation to the owner?

    <p>Expropriation</p> Signup and view all the answers

    Which of the following is NOT a method used to measure economic development?

    <p>Market share of major corporations</p> Signup and view all the answers

    What is the primary focus of antitrust laws?

    <p>Preventing unfair business practices such as price fixing and monopolies.</p> Signup and view all the answers

    Which characteristic distinguishes a totalitarian system from a democratic system?

    <p>Government tightly controls individuals' lives.</p> Signup and view all the answers

    In which economic system is the government responsible for nearly all economic activities?

    <p>Centrally planned economy</p> Signup and view all the answers

    What is a key feature of a representative democracy?

    <p>It provides periodic elections and freedoms of expression.</p> Signup and view all the answers

    What defines a mixed economy?

    <p>Private ownership exists alongside government ownership.</p> Signup and view all the answers

    Which legal system is primarily based on legal history and judicial precedents?

    <p>Common law</p> Signup and view all the answers

    Which of the following statements best describes secular totalitarianism?

    <p>It uses military and bureaucratic power for control.</p> Signup and view all the answers

    What is the main priority in a centrally planned economy?

    <p>Ensuring social and economic equality.</p> Signup and view all the answers

    In a market economy, what primarily determines the prices of goods and services?

    <p>Supply and demand</p> Signup and view all the answers

    What is the primary legal concern for international businesses regarding product liability laws?

    <p>Knowing the responsibilities for damages caused by defective products</p> Signup and view all the answers

    Which factor is NOT considered a source of political risk that could affect international businesses?

    <p>Economic sanctions</p> Signup and view all the answers

    Which method of measuring economic development focuses on the equitable distribution of resources across a population?

    <p>Human Development Index (HDI)</p> Signup and view all the answers

    What type of property seizure involves the government taking over an industry without compensating the owners?

    <p>Confiscation</p> Signup and view all the answers

    What effectively characterizes theocratic totalitarianism?

    <p>Governance through laws rooted in religious tenets</p> Signup and view all the answers

    Which of the following best describes antitrust laws?

    <p>Regulations preventing unfair monopolistic practices</p> Signup and view all the answers

    What is the significance of incorporating risk into business strategies for managing political risk?

    <p>It helps in adapting to potential political changes</p> Signup and view all the answers

    In which system does the government primarily focus on achieving economic and social equality?

    <p>Centrally planned economy</p> Signup and view all the answers

    What is a distinguishing feature of a mixed economy compared to other economic systems?

    <p>Balance between private and government ownership of resources</p> Signup and view all the answers

    Which of the following is a characteristic feature of civil law systems?

    <p>Detailed set of written rules and statutes</p> Signup and view all the answers

    What defines the primary characteristic of a market economy?

    <p>Prices determined by supply and demand interactions</p> Signup and view all the answers

    Which taxation system is particularly important for international businesses to understand?

    <p>Value-added tax</p> Signup and view all the answers

    How do secular totalitarian regimes maintain control over society?

    <p>By strictly regulating economic resources and civilian life</p> Signup and view all the answers

    What is a key aspect of representative democracies?

    <p>Public officials are elected through periodic elections</p> Signup and view all the answers

    What element does common law primarily rely on?

    <p>Historical decisions and precedents set by courts</p> Signup and view all the answers

    In a totalitarian system, what is typically true about the views of individuals?

    <p>Monitored and controlled strictly by authority</p> Signup and view all the answers

    Study Notes

    Political Systems

    • Totalitarian System: Governed without public support; tightly controls lives; intolerant of opposing views.
    • Theocratic Totalitarianism: Order maintained through laws based on religious beliefs and totalitarian principles.
    • Secular Totalitarianism: Political leaders utilize military and bureaucratic power for governance.
    • Democratic System: Leaders elected by the populace or their representatives, emphasizing freedom of expression and civil rights.

    Economic Systems

    • Centrally Planned Economy: Government owns and controls all economic resources; prioritizes economic and social equality over individual needs.
    • Mixed Economy: Combination of private and government ownership of resources; seeks efficiency while safeguarding society from excess greed.
    • Market Economy: Predominantly private ownership with minimal government intervention; prices determined by supply and demand, correlating with higher living standards.
    • Common Law: Based on legal traditions and past court precedents; law application varies by specific situations.
    • Civil Law: Constituted by detailed written rules and statutes forming a legal code, outlining obligations and rights.
    • Theocratic Law: Grounded in religious teachings.
    • Intellectual Property Protection: Essential to safeguard against violations like patents, trademarks, and copyrights.
    • Product Liability Laws: Understanding country-specific laws regarding responsibility for defective products is critical for operations.
    • Antitrust Laws: Necessary awareness to prevent unfair competitive practices, such as price-fixing and monopolies.
    • Taxation Systems: Businesses must navigate various tax regulations in different countries.

    Economic Development

    • Definition: Increase in economic well-being and quality of life among a nation's populace.
    • Measurement Methods:
      • National Production: Metrics like Gross National Product (GNP) and Gross Domestic Product (GDP) evaluate economic activity.
      • Purchasing Power Parity: Compares the purchasing ability of currencies relative to goods' cost in respective countries.
      • Human Development Index: Assesses the extent to which a community's needs are met equitably.

    Political Risk

    • Definition: Likelihood of political actions affecting businesses positively or negatively.
    • Types of Political Risk:
      • Macro Risk: Affects all companies across sectors equally.
      • Micro Risk: Impacts specific industries or groups of companies.
    • Sources of Political Risk:
      • Conflict and violence, property seizure (confiscation, expropriation, nationalization), government policy changes.

    Managing Political Risk

    • Adaptation: Incorporating political risk assessments into business strategies.
    • Information Gathering: Monitoring local political developments closely.
    • Political Influence: Engaging in lobbying to affect local political decisions.

    Political Systems

    • Totalitarian System: Governed without public support; tightly controls lives; intolerant of opposing views.
    • Theocratic Totalitarianism: Order maintained through laws based on religious beliefs and totalitarian principles.
    • Secular Totalitarianism: Political leaders utilize military and bureaucratic power for governance.
    • Democratic System: Leaders elected by the populace or their representatives, emphasizing freedom of expression and civil rights.

    Economic Systems

    • Centrally Planned Economy: Government owns and controls all economic resources; prioritizes economic and social equality over individual needs.
    • Mixed Economy: Combination of private and government ownership of resources; seeks efficiency while safeguarding society from excess greed.
    • Market Economy: Predominantly private ownership with minimal government intervention; prices determined by supply and demand, correlating with higher living standards.
    • Common Law: Based on legal traditions and past court precedents; law application varies by specific situations.
    • Civil Law: Constituted by detailed written rules and statutes forming a legal code, outlining obligations and rights.
    • Theocratic Law: Grounded in religious teachings.
    • Intellectual Property Protection: Essential to safeguard against violations like patents, trademarks, and copyrights.
    • Product Liability Laws: Understanding country-specific laws regarding responsibility for defective products is critical for operations.
    • Antitrust Laws: Necessary awareness to prevent unfair competitive practices, such as price-fixing and monopolies.
    • Taxation Systems: Businesses must navigate various tax regulations in different countries.

    Economic Development

    • Definition: Increase in economic well-being and quality of life among a nation's populace.
    • Measurement Methods:
      • National Production: Metrics like Gross National Product (GNP) and Gross Domestic Product (GDP) evaluate economic activity.
      • Purchasing Power Parity: Compares the purchasing ability of currencies relative to goods' cost in respective countries.
      • Human Development Index: Assesses the extent to which a community's needs are met equitably.

    Political Risk

    • Definition: Likelihood of political actions affecting businesses positively or negatively.
    • Types of Political Risk:
      • Macro Risk: Affects all companies across sectors equally.
      • Micro Risk: Impacts specific industries or groups of companies.
    • Sources of Political Risk:
      • Conflict and violence, property seizure (confiscation, expropriation, nationalization), government policy changes.

    Managing Political Risk

    • Adaptation: Incorporating political risk assessments into business strategies.
    • Information Gathering: Monitoring local political developments closely.
    • Political Influence: Engaging in lobbying to affect local political decisions.

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