International Business Environment Exam Preparation Guide
Course Introduction
The International Business Environment course explores the dynamic and complex factors influencing the conduct of business across national borders. Students will examine global economic, political, legal, technological, and cultural environments that shape international business strategies and operations. The course addresses issues such as globalization, international trade and investment, foreign market entry strategies, and the impact of international institutions and agreements. Emphasis is placed on understanding the challenges and opportunities faced by businesses in the global marketplace, including cross-cultural management, ethical considerations, and the emerging trends affecting international business dynamics.
Recommended Textbook
International Business Law and Its Environment 8th Edition by Richard Schaffer
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21 Chapters
1385 Verified Questions
1385 Flashcards
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Page 2
Chapter 1: Introduction to International Business
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63 Verified Questions
63 Flashcards
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Sample Questions
Q1) The premise that suggests nations should concentrate their efforts on producing those goods that they can make most efficiently and with minimal effort and waste is:
A) Specialization.
B) Absolute advantage.
C) Competitive trade.
D) None of the above.
Answer: B
Q2) Tariffs on imported products are imposed for which of the following reasons:
A) Collection of revenue.
B) Protection of domestic industries.
C) To assert political objectives.
D) All of the above.
Answer: D
Q3) Exporting is the shipment of goods or rendering of services to a foreign buyer located in a foreign country.
A)True
B)False
Answer: True
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Chapter 2: International Law and the Worlds Legal Systems
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Sample Questions
Q1) The World Court is an agency of the U.S.Government used to settle international disputes.
A)True
B)False
Answer: False
Q2) A nation can be brought before the World Court whether or not it wants to be there.
A)True
B)False
Answer: False
Q3) The purpose of GATT is:
A) To commit member countries to principles of nondiscrimination and reciprocity concerning tariff and quota reductions and disputes over these subjects.
B) To assist member nations in obtaining the relocation of industry to a country.
C) To force member nations to accept goods from all other member nations.
D) None of the above.
Answer: A
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Chapter 3: Resolving International Commercial Disputes
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Sample Questions
Q1) Many factors must be considered in choosing binding arbitration.All of the following should be considered except:
A) Cost.
B) Speed.
C) Enforceability.
D) Complexity.
Answer: D
Q2) Many business persons believe that certain antitrust claims are unique and are not subject to arbitration.
A)True
B)False
Answer: True
Q3) Private international law is the law of the forum state concerning:
A) International businesses.
B) Choice of law.
C) Choice of forum.
D) Enforcement of Judgments.
E) B, C, and D only.
Answer: E
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Page 5
Chapter 4: Sales Contracts and Excuses for Nonperformance
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Sample Questions
Q1) Write that same contract using CISG law.
Q2) Money damages for breach of a sales contract may also include an amount for lost profits arising as a reasonably foreseeable consequence of the breach.
A)True
B)False
Q3) Write a contract (between a U.S.buyer and a German seller)that includes some provision of German law.
Q4) If a seller's employees go on strike,this is a valid legal excuse for not performing under a sales contract.
A)True
B)False
Q5) Under the CISG,a communication between the parties would be considered an offer when:
A) It is in the form of an advertisement.
B) It leaves the quantity or price terms open.
C) It is sufficiently definite and indicates an intention to be bound.
D) Both B and C.
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Q6) Consider the benefits and detriments of a U.S.buyer and a German seller using U.S.law for a sale contract.
Chapter 5: The Documentary Sale and Terms of Trade
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Q1) Compare and contrast the risk of loss and expenses associated with "C" and "F" terms.
Q2) A sale made with terms "CIF Tokyo" includes in the price quoted for the goods which of the following:
A) Cash, in-transit expenses, foreign exchange expenses.
B) Cash, insurance, freight.
C) Cost, insurance, freight.
D) Currency exchange expenses, insurance, freight.
Q3) Both negotiable instruments and negotiable documents serve as substitutes for money.
A)True
B)False
Q4) According to Incoterms,the trade term that represents the maximum responsibility of the seller is:
A) Carriage and Insurance Paid To.
B) Delivered Duty Paid.
C) Ex Works.
D) Delivered at Frontier.
E) None of the above.
Q5) Draft a bill of lading.
7
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Chapter 6: The Carriage of Goods and the Liability of Air and Sea Carriers
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Sample Questions
Q1) The laws that govern the liability of ocean carriers are very similar in most nations.
A)True
B)False
Q2) The proposed Rotterdam Rules differ from the Hague Rules in all of the following except:
A) The expansion of carrier liability from "door to door."
B) The elimination of errors in navigation as an exception from liability.
C) The elimination of the requirement of written bills of lading.
D) The elimination of perils of the sea as an exception from liability.
Q3) Weigh the merits and shortcomings of the Montreal Convention.
Q4) Assess whether the Warsaw Convention or COGSA provide greater protection for the one seeking carriage.
Q5) The perils clause in a marine insurance contract covers which of the following: A) Explosion.
B) Pilferage.
C) Acts of war.
D) Jettison of the cargo during a storm.
Q6) Rewrite an insurance policy for carriage into a plain language policy.
Page 8
Q7) Draft an air waybill or consignment note for inland carriage.
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Chapter 7: Bank Collections, Trade Finance, and Letters of Credit
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Sample Questions
Q1) A letter of credit is a contract between:
A) The seller and the buyer's bank.
B) The buyer's bank and the seller's bank.
C) The sellers and their own bank.
D) The buyers and their own bank.
Q2) Upon advising the seller that a letter of credit has been issued in its favor,the advising bank has assumed conditional responsibility for payment.
A)True
B)False
Q3) The form of counter trade that involves a sale of goods to a buyer who required as a condition of sale that the seller buys other goods produced in that country is called:
A) Contratrade.
B) Reverse trade.
C) Barter.
D) Counter purchase.
Q4) Compare and contrast O'Meara with Sztejn.
Q5) Weigh the benefits and detriments of counterpurchase,barter,and buy-back agreements.
9
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Chapter 8: National Lawmaking Powers and the Regulation
of Ustrade
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Sample Questions
Q1) State governments may restrict imports in order to deal with public health and safety concerns.
A)True
B)False
Q2) If the president is negotiating a trade agreement with Germany over reducing tariffs on telephone switching equipment and he wants to make sure there will be no problems with its passage,he can:
A) Call the Speaker of the House and President Pro Tem of the Senate to get their assurances of passage.
B) Declare through Presidential Proclamation that it will be law.
C) Seek fast-track approval with Congress prior to the trade agreement being concluded.
D) None of the above.
Q3) There is very little debate over how the U.S.Constitution divides power over foreign affairs and foreign trade between the Congress and the president.
A)True
B)False
Q4) Weigh the relative value and risks of fast-rack regulation.
Q5) Weigh the relative merits and detriments of FCN treaties.
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Chapter 9: Gatt Law and the World Trade Organization:
Basic Principles
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Sample Questions
Q1) Assess the relative value of a reported U.S.appellate (or trial)decision and a WTO panel report in a trade dispute.
Q2) Tariffication is the process in which quotes,licensing schemes,and other nontariff barriers to trade are "converted" to tariffs.
A)True
B)False
Q3) The concept that runs throughout the GATT requires that the products of all nations be treated equally and without discrimination by importing nations.This is the principal behind:
A) Nullification and impairment.
B) Most-favored-nation trade.
C) Ad valorem tariffs.
D) Nontariff trade barriers.
Q4) In what ways are GATT and the WTO similar? Different?
Q5) The 1947 GATT provided stiff penalties for the misuse of intellectual property.
A)True
B)False
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Q6) Explain the similarities and differences between "like products" and "directly competitive products."
Chapter 10: Laws Governing Access to Foreign Markets
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Sample Questions
Q1) The Agreement on Government Procurement reverses the general GATT rules that allow government agencies to favor domestic products.
A)True
B)False
Q2) After many years of work by the European Union Commission,most European countries have agreed on similar standards for consumer products.
A)True
B)False
Q3) In what ways are quotas and numerical restrictions similar yet different?
Q4) Special 301 is used against countries that fail to protect U.S.intellectual property rights.
A)True
B)False
Q5) Agricultural products,in general,have few barriers to trade placed upon them.
A)True
B)False
Q6) Compare and contrast some of the remedies and sanctions under Section 301.
Q7) Compare and contrast unilateralism with bilateralism.
Page 12
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Chapter 11: Regulating Import Competition and Unfair Trade
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76 Verified Questions
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Sample Questions
Q1) Section 301 of the Trade Act of 1974 provides authority for the president to do what,if barriers to U.S.trade are not lifted?
A) Petition Congress to intervene in the situation.
B) Threaten military action if the barriers are not lifted.
C) Use retaliation in the form of duties or quotas.
D) Pay the U.S. company a subsidy.
Q2) Dumping does not occur when there is no market for the product in the home country.
A)True
B)False
Q3) A provisional measure is a tariff imposed by a country in order to ensure that dumping does not take place.
A)True
B)False
Q4) Dumping is the unfair trade practice of selling products in one country for less than the price charged for comparable goods in the producer's home market.
A)True
B)False
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Chapter 12: Imports, Customs, and Tariff Law
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Sample Questions
Q1) Foreign Trade Zones make it possible for U.S.manufacturers to export goods without having to pay any duties.
A)True
B)False
Q2) Contrast the traditional "name,character,and use" test with that used presently.
Q3) Liquidation of goods by the U.S.Bureau of Customs and Border Protection refers to:
A) The assessment of applicable duties.
B) Disposal of seized goods.
C) Confiscation of goods not allowed for import to U.S.
D) Sale of unclaimed goods.
Q4) For smaller commercial shipments that are mailed into the U.S.,the U.S.Postal Service letter carrier acts as an agent for the U.S.Bureau of Customs and Border Protection for purposes of collecting import duties.
A)True
B)False
Q5) In what ways might valuation methods implicate dumping and dumping remedies? Subsidies?
Q6) Compare and contrast GSP status with normal trade relations status.
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Chapter 13: The Regulation of Exports
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Sample Questions
Q1) Unilateral export controls are determined by several countries (against another or group of other countries)but enacted by only one country; multilateral export controls are determined and enacted by several countries to control the exports to another country or groups of countries.
A)True
B)False
Q2) Formulas,blueprints,and technical data are subject to controls when exported.
A)True
B)False
Q3) Compare and contrast unilateral export controls with multilateral controls.
Q4) The current law that controls the export of goods from a U.S.manufacturer to a foreign buyer also controls the re-export of those goods beyond the boundaries of the country of the original foreign buyer.
A)True
B)False
Q5) In some circumstances,the presentation of research by a U.S.scientist at a convention in a foreign nation may require an export license.
A)True
B)False
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Chapter 14: North American Free Trade Law
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Sample Questions
Q1) Presume that the Caribbean countries have been granted NAFTA membership.Design a plan for phasing them into membership.
Q2) NAFTA was built on the U.S.-Canada Free Trade Agreement.
A)True
B)False
Q3) Which of the following statements is untrue regarding emergency safeguard actions under NAFTA?
A) Special safeguards for textiles may be applied where increased imports cause "serious damage" to the domestic industry.
B) Safeguards are available for ten years for certain agricultural products.
C) The country using them must offer the exporting country trade compensation.
D) Safeguards can take the form of both tariffs and quotas.
E) All of the above.
Q4) NAFTA is similar to the European Union because it is a customs union.
A)True B)False
Q5) A customs union is a free trade area with a common external tariff.
A)True
B)False
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Chapter 15: The European Union and Other Regional Trade Areas
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Sample Questions
Q1) In the European Court of Justice,
A) Decisions are issued without dissenting opinions.
B) Justices are appointed for life.
C) Civil law traditions, more than common law traditions, are followed.
D) A, B, and C.
E) A and C only.
Q2) The Four Freedoms preempt any action by the member states in the areas of goods,services,capital and people.
A)True
B)False
Q3) A ____ is binding and directly applicable in all member states; and a ____ sets forth the result to be achieved but leaves to the individual states the responsibility to employ the appropriate steps:
A) Regulation; directive.
B) Rule; resolution.
C) Resolution; rule.
D) Directive; regulation.
Q4) Compare and contrast the EU with NAFTA.
Q5) In what ways does MERCOSUR resemble the EU? The U.S.?
Q6) Compare and contrast EU directives with regulations,giving examples of each. Page 17
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Page 18
Chapter 16: International Marketing Law: Sales Representatives,
Advertising, and Ethical
Issues
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Sample Questions
Q1) The United States is one of the few nations of the world that regulates advertising to children.
A)True
B)False
Q2) Draft a contract with a foreign representative.Include a provision regarding termination and payment for services under such circumstances.
Q3) Payments made to foreign officials by an individual for the purpose of expediting or securing the performance of a routine or clerical governmental action are subject to fines up to $100,000 and/or a jail term of up to five years.
A)True
B)False
Q4) The FCPA prohibits U.S.firms from paying bribes to:
A) Foreign competitors.
B) Purchasing agents of foreign firms with whom U.S. firms do business.
C) Foreign government officials.
D) The clerk in a telephone office in Paris who is trying to place an overseas call for you.
E) Two of the above.
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Chapter 17: Licensing Agreements and the Protection of Intellectual Property Rights
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Sample Questions
Q1) Many technology owners have avoided introducing technology or technological products into Brazil because:
A) The market has been too weak to support these high-tech products.
B) Technology transfer agreements have been interpreted under Brazilian law so that the original owner loses many rights in the technology.
C) Brazilian taxes on the introduction of technology into the country have been prohibitively high.
D) Spies and foreign agents have been stealing the technology and selling it to the communist countries.
Q2) Governments in developing countries usually encourage the use of licensed intellectual property by diligently enforcing laws designed to protect it from theft or other means of exploitation.
A)True
B)False
Q3) TRIPS was the result of intensive negotiations during the so-called Tokyo Round of GATT talks and provided increased protection for IPRs during the 1980s.
A)True
B)False
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Chapter 18: Takings and National Controls on Foreign Direct Investment
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Q1) In order to avoid double taxation on the income of foreign subsidiary companies,U.S.tax law:
A) Does not tax income repatriated to the U.S. parent company.
B) Allows the U.S. parent company to take a 100 percent tax credit for foreign income taxes paid.
C) Provides a deduction for foreign income taxes paid.
D) None of the above. U.S. companies are usually subject to double taxation when they have foreign subsidiaries.
Q2) All of the following are alternative methods for a U.S.investor entering into a joint venture in a foreign country except:
A) A foreign partnership.
B) A foreign corporation.
C) A U.S. corporation with a foreign branch.
D) A foreign expropriation.
Q3) Even if an investor proposes to bring a desired industry to a soft-currency nation,it will generally not be possible to get currency exchange rights (preferential access to hard currency).
A)True
B)False
Page 21
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Chapter 19: Labor and Employment Discrimination Law
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Q1) In the United States,employers must have a good cause and give adequate notice before dismissing an employee.
A)True
B)False
Q2) In many countries,employers are required by law to consult with worker's groups prior to any large-scale dismissals.
A)True
B)False
Q3) In Germany,companies that employ more than 2,000 workers must have supervisory boards with 25% representation from labor and 75% representation from shareholders.
A)True
B)False
Q4) In Japan,union leadership is a stepping stone to management.
A)True
B)False
Q5) Germany grants its workers great rights to participate in the management of the business.
A)True B)False
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Chapter 20: Environmental Law
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Sample Questions
Q1) Which of the following laws regulate the export of hazardous materials?
A) GATT.
B) TOSCA.
C) FIFRA.
D) A and B.
E) B and C.
Q2) The central problem in environmental law lies in determining which activities alter the environment to an unacceptable extent.
A)True
B)False
Q3) In the area of solving international environmental issues,the North American approach has been to use:
A) Arbitration.
B) The World Court.
C) Bilateral treaties.
D) Mediation.
Q4) Draft a memo enumerating and discussing the "environmental risk" facing companies wishing to invest in foreign states.
Q5) Reflecting on the "Circle of Poison," draft a bill regarding pesticide exports.
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Chapter 21: Regulating the Competitive Environment
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Sample Questions
Q1) The form of antitrust laws differs substantially from nation to nation.
A)True
B)False
Q2) In the Hartford Fire Insurance Co.case,the U.S.Supreme Court determined that it could not assert jurisdiction over European companies in competition matters unless the companies had a direct physical presence in a U.S.state.
A)True
B)False
Q3) The European Union and foreign nations have begun a spirited effort to beef up their competition laws.
A)True
B)False
Q4) Discuss the advantages and disadvantages -- from the perspective of competition law -- in having a wholly foreign subsidiary in Europe.
Q5) The U.S.has an analogous system to the European Union's system for resolving antitrust law issues prior to the transaction taking place.
A)True
B)False
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