Exam 3: Legal, Technological, Accounting, and Political Environments

Common law is primarily based on ________.

Civil wars, terrorist threats, and kidnappings typically disrupt an MNE's production capabilities.

What is the purpose of political risk assessment?

APO Manufacturing is a U.S. based firm that manufactures electronic equipment. The firm conducts business with a Japanese electronics firm, and a dispute has arisen between the two firms regarding intellectual property rights. APO management plans to use arbitration to resolve the problem. Which of the following best supports this decision?

The United States has enforced an embargo against Cuba since the early 1960s.

________ is the risk associated with the potential for the government to interfere with the firm's ability to move funds in and out of the country.

Expropriation is best defined as the ________.

Cochran Industries, a U.S. firm, has a manufacturing facility in Mexico. Which aspect of Cochran's operations is probably LEAST affected by the Mexican legal system?

When the British government sold its interests in British Airways to an outside investor, the government was practicing privatization.

________ is the process by which both parties in a conflict agree to submit their cases to a private individual or body whose decision they will honor.

In which industry does Mexico restrict foreign ownership?

What is a political risk? What are the three categories of political risks?

The civil law system is based on a detailed listing of what is or is not permissible.

________ has one of the highest levels of macropolitical risk.

Accounting reserves ________.

Most foreign bankers believe that Germany is the easiest foreign locale in which to lend because of the ability to assess the riskiness of potential loans with great accuracy.

The Helms-Burton Act is among the most controversial applications of extraterritoriality affecting international business today.

Which of the following best explains why the telecommunications industry has been privatized in many countries?

Which country does NOT require firms to capitalize financial leases?

________ is the risk associated with the potential for the employees or operations of the firm to be threatened by changes in laws, environmental standards, tax codes, and terrorism.