International Business Law
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Course Introduction
International Business Law introduces students to the legal frameworks that govern cross-border commercial activities. This course examines the key principles, treaties, and institutions that affect international trade, investment, and dispute resolution. Topics include the regulation of international contracts, the role of international organizations such as the World Trade Organization, methods of resolving business disputes across jurisdictions, and issues of corporate social responsibility in a global context. Students will explore case studies and real-world scenarios to develop a practical understanding of how businesses navigate the complex legal landscape of international markets.
Recommended Textbook
Global Business Today 10th Edition by Charles
W. L. Hill Dr
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Page 2
Chapter 1: Globalization
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Q1) Why are supranational organizations,such as the World Trade Organization and the United Nations,criticized?
Answer: A concern voiced by critics of globalization is that today's increasingly interdependent global economy shifts economic power away from national governments and toward supranational organizations such as the World Trade Organization,the European Union,and the United Nations.As perceived by critics,unelected bureaucrats now impose policies on the democratically elected governments of nation-states,thereby undermining the sovereignty of those states and limiting the nation's ability to control its own destiny.
Q2) Globalization opponents argue that "exporting jobs" to low-wage nations has contributed to
A)higher living standards in those countries that "export" the jobs.
B)higher unemployment in wealthy advanced economies such as the United States.
C)an increase in the income levels in those nations that "export" the jobs.
D)lower standards of living in those countries to which the jobs are exported.
E)reduced specialization in the production of goods and services.
Answer: B
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Page 3
Chapter 2: National Differences in Political, Economic, and Legal Systems
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Q1) The common law system enjoys a degree of flexibility not found in other systems because
A)it is usually found in democratic republics.
B)it originated from Great Britain and can be found in almost all of its former colonies.
C)it is interpreted by the law courts with regard to tradition,precedent,and custom.
D)it is based on a detailed set of laws organized into codes.
E)it has originated recently-just a decade ago.
Answer: C
Q2) Which of the following is most likely to be protected by a copyright?
A)new manufacturing process invented in a company
B)newly invented telecommunication device
C)tangible property like land and building
D)movies produced and directed by a person
E)new type of car invented by an automobile company
Answer: D
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Chapter 3: National Differences in Economic Development
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Q1) Which of the following is based on three measures: life expectancy at birth,educational attainment,and average incomes based on PPP estimates?
A)Human Development Index
B)Gross National Income
C)Gross Domestic Product
D)Cost of Living Index
E)Cash Reserve Ratio
Answer: A
Q2) The purchasing power parity for different countries is adjusted (up or down)depending upon whether a country's cost of living is lower or higher than the cost of living in the United States.
A)True
B)False
Answer: True
Q3) In Amartya Sen's view,development is solely an economic process,and not a political process.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Differences in Culture
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Q1) When compared to American society,Japanese society lacks A)commitment to lifetime employment.
B)emphasis on group memberships.
C)self-managing work teams.
D)close cooperation between individuals.
E)dynamism and entrepreneurship.
Q2) In the country of Burnada,the citizens are restricted from moving out of the strata they are born into.Also,individuals are allowed to engage only in the occupation associated with their particular strata.The system of social stratification being practiced in Burnada can be identified as a
A)cluster system.
B)caste system.
C)merit-based system.
D)class system.
E)bureaucracy-based system.
Q3) What are the two different banking methods that Islamic banks have experimented with in order to avoid the payment or receipt of interest?
Q4) "There is not a strict one-to-one correspondence between a society and a nation-state." Discuss.
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Chapter 5: Ethics, Corporate Social Responsibility, and Sustainability
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Q1) Which of the following statements is true about the Universal Declaration of Human Rights?
A)This declaration provides different sets of fundamental rights and privileges for different cultures.
B)According to this declaration,it is unethical to employ child labor in sweatshops even if that happens to be common in some countries.
C)This declaration states that it is ethical to treat people as means to the ends of others.
D)According to this declaration,citizens of a nation have no duties to their community.
E)According to this declaration,people do not have a right to join trade unions for the protection of their interests.
Q2) John Rawls's veil of ignorance is a conceptual tool that contributes to the moral compass that managers can use to help them navigate through difficult ethical dilemmas.
A)True
B)False
Q3) Discuss the concept of an ethical dilemma.
Q4) Discuss any two straw men approaches to business ethics.
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Chapter 6: International Trade Theory
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Q1) Diminishing returns to specialization occur when A)resources can move freely from the production of one good to another within a country.
B)more units of resources are required to produce each additional unit.
C)the cost of producing goods reduces substantially with increase in number of goods produced.
D)the quality of resources comes down as a result of producing more goods.
E)the quality of goods produced per unit of resource begins to improve.
Q2) The new trade theory diverts from its advocacy of free trade by suggesting that A)the price of a new product increases along with the increase in the popularity of the product.
B)nations benefit from trade even in the absence of resource endowments and technology.
C)there is an economic rationale for a proactive trade policy.
D)the role of luck,entrepreneurship,and innovation is important in giving a firm first-mover advantages.
E)market expansion leads to better realization of economies of scale.
Q3) Briefly describe new trade theory.
Q4) Discuss the policy implications of Porter's theory of national competitive advantage.
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Chapter 7: Government Policy and International Trade
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Q1) Give a brief description of the origin,functions,and successes of GATT from 1947 to 1979,before protectionist trends gained momentum across the world.
Q2) Define local content requirements.Explain how this helps domestic firms.
Q3) The threat of antidumping action enhances the ability of a firm to use aggressive pricing to gain market share in a country.
A)True
B)False
Q4) How do trade barriers constrain a firm's ability to disperse its productive activities?
Q5) Which of the following is most likely to be an objective of export tariffs?
A)abiding by the rules enforced by the WTO
B)curbing the competition offered by foreign firms to domestic firms
C)reducing exports from a sector,often for political reasons
D)maintaining a positive trade deficit
E)increasing the flow of capital in the international market
Q6) What is the "infant industry argument"? What are its implications for the world economy? What are the criticisms of this argument?
Q7) Explain the organizational structure and the key functions of the WTO.
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Chapter 8: Foreign Direct Investment
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Q1) The United States has been an attractive target for FDI partly because of its
A)abundance of cheap and skilled labor.
B)stable and dynamic economy.
C)commitment to environmental issues.
D)low corporate tax rates.
E)high trade barriers.
Q2) A firm will favor FDI over exporting as an entry strategy when
A)the costs of establishing production facilities are high.
B)the transportation costs or trade barriers are high.
C)there are problems associated with doing business in a different culture.
D)the products involved have a high value-to-weight ratio.
E)the firm wants to occupy a position that falls inside the efficiency frontier.
Q3) Historically,most FDI has been directed at the least developed nations of the world. A)True
B)False
Q4) Ownership restraints and performance requirements are the two most common ways in which host governments restrict FDI.
A)True
B)False
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Chapter 9: Regional Economic Integration
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Q1) Since the number of trade groups in the African continent is impressive,progress toward the establishment of meaningful trade blocs has been fast.
A)True
B)False
Q2) In terms of regional economic integration,linking neighboring economies and making them increasingly dependent on each other creates incentives for political cooperation between the neighboring states.
A)True
B)False
Q3) Which of the following is defined as a group of countries committed to removing all barriers to the free flow of goods and services between each other,but pursuing independent external trade policies?
A)free trade area
B)command economy
C)efficient market
D)foreign exchange market
E)location economy
Q4) Briefly describe the European Council.
Q5) What were the objectives of the Single European Act?
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Chapter 10: The Foreign Exchange Market
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Q1) Differentiate between spot exchange rates and forward exchange rates.
Q2) How do foreign exchange markets benefit international businesses?
Q3) How do the purchasing power parity theory and the law of one price relate the prices of commodities to exchange rate movements?
Q4) Which of the following is a variable used in exchange rate forecasting models based on fundamental analysis?
A)relative strength indicator
B)moving average
C)inflation rate
D)business cycles
E)regression
Q5) Although a foreign exchange transaction can involve any two currencies,most transactions involve dollars on one side.
A)True
B)False
Q6) The foreign exchange market offers complete insurance against foreign exchange risk.
A)True
B)False
Page 12
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Chapter 11: The International Monetary System
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Q1) Which of the following observations about the International Monetary Fund (IMF)is true?
A)The IMF can force countries to adopt the policies required to correct economic mismanagement.
B)Internal political problems can affect a government's commitment to taking corrective action in return for an IMF loan.
C)In recent years,the IMF has begun to make its policies more tight and inflexible.
D)In response to the global financial crisis of 2008-2009,the IMF began to adopt a "one-size-fits-all" approach to macroeconomic policy.
E)In recent years,the IMF has begun to urge countries to oppose fiscal stimulus and monetary easing.
Q2) Which of the following is true of a banking crisis?
A)It leads to individuals and companies withdrawing their deposits from banks.
B)It results in a sharp appreciation in the value of the currency.
C)It happens due to a decline in domestic borrowing.
D)It occurs due to asset price deflation.
E)It results in low government deficits.
Q3) What was the drawback of the Bretton Woods system?
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Page 13
Chapter 12: The Strategy of International Business
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Q1) Profit growth is measured by the percentage increase in net profits over time.
A)True
B)False
Q2) Omega,Inc.sells its fitness wrist band for $100.It cost the company $62 to make the product.Customers value the wrist band at $110.In this scenario,the consumer surplus is A)$38.
B)$48.
C)$10.
D)$28.
E)$272.
Q3) Which of the following strategies is most likely to be pursued by a firm when there are strong pressures for cost reductions and demands for local responsiveness are minimal?
A)domestic strategy
B)global standardization strategy
C)international strategy
D)transnational strategy
E)nationalization strategy
Q4) What are the different ways in which a firm can benefit from global expansion?
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Chapter 13: Entering Foreign Markets
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Q1) In exporting,problems with local marketing agents can be overcome by
A)selling intangible property to a franchisee and insisting on rules to conduct the business.
B)changing agents frequently.
C)engaging in turnkey projects and exporting process technology to foreign firms.
D)entering into cross-licensing agreements with foreign firms.
E)setting up wholly owned subsidiaries in foreign nations to handle local marketing.
Q2) If a firm is seeking to enter a market via a wholly owned subsidiary where there are already well-established incumbent enterprises,and where global competitors are also interested in establishing a presence,a suitable mode of entry is a(n)
A)acquisition.
B)licensing deal.
C)greenfield venture.
D)turnkey project.
E)exporting deal.
Q3) What is a wholly owned subsidiary? List its advantages.
Q4) In terms of international business,briefly describe pioneering costs.
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Chapter 14: Exporting, Importing, and Countertrade
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Q1) Jamal Steel,a rapidly growing small steel company with annual revenues of $8 million is looking to buy a large industrial furnace from Japan that is expected to cost $2 million.The exporter wants Jamal Steel to produce a letter of credit.Jamal Steel's CFO is reluctant to do so.Which of the following disadvantages of using a letter of credit for international transactions is likely the reason for the CFO's reluctance?
A)It results in the importer losing control over the process of trading.
B)It reduces the exporter's level of trust in the importer.
C)It reduces the importer's ability to borrow funds for other purposes.
D)It requires the importer to repay the loan even before the merchandise is sold.
E)It is not issued at the importer's request.
Q2) The Foreign Credit Insurance Association (FCIA)is an association of private commercial institutions operating under the guidance of the A)Federal Mediation and Conciliation Service.
B)U.S.Department of Commerce.
C)Export-Import Bank.
D)International Trade Administration.
E)Ministry of International Trade and Industry.
Q3) What is the difference between a sight draft and a time draft?
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Chapter 15: Global Production and Supply Chain Management
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Q1) What are the ways in which improved quality control reduces costs?
Q2) When a company achieves mass customization via flexible manufacturing technologies,it increases the company's
A)cost structure.
B)waste.
C)customer responsiveness.
D)learning effects.
E)externalities.
Q3) Adopting flexible manufacturing technology to produce a wide variety of end products results in
A)increased setup times for complex equipment.
B)increased utilization of individual machines.
C)reduced quality control.
D)increased unit cost of products.
E)lesser need for scheduling.
Q4) Firms now typically use electronic data interchange (EDI)via the Internet to coordinate the flow of materials into manufacturing,through manufacturing,and out to customers.
A)True
B)False
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Chapter 16: Global Marketing and Research and Development
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Q1) A technological innovation can make established products obsolete overnight.
A)True
B)False
Q2) Briefly describe market segmentation.
Q3) Firms can reduce the failure of product development by ensuring that research and development,marketing,and production functions work independently.
A)True
B)False
Q4) Which of the following marketing strategies relies on access to advertising media?
A)personal selling
B)direct selling
C)push strategy
D)pull strategy
E)copy testing
Q5) Describe how source and country of origin effects affect the effectiveness of a firm's international communication.
Q6) Describe the influence of integrating research and development,marketing,and production on new-product development.
Page 18
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Chapter 17: Global Human Resource Management
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Q1) Kagemusha,Inc.,is a Japanese multi-national with operations in 23 countries around the world.It is Kagemusha's policy to staff all the key positions in the company's foreign operations with Japanese managers.What is Kagemusha's staffing policy?
A)ethnocentric
B)global
C)polycentric
D)geocentric
E)transnational
Q2) According to Mendenhall and Oddou,expatriates with perceptual ability tend to be judgmental and evaluative in interpreting the behavior of host-country nationals.
A)True
B)False
Q3) Briefly describe how national differences in compensation can affect an international business.
Q4) An expatriate manager is a citizen of one country who is working abroad in one of the firm's subsidiaries.
A)True
B)False
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