Exam 4: Economic Development of Nations

________ is the chance that political forces may change a country's business environment in ways that lead investors to lose some or all of the value of their investment or be forced to accept a lower-than-projected rate of return.

Both GDP and GNP measure a nation's income per person.

The relative ability of two countries' currencies to buy the same basket of goods in those two countries is called ________.

Economic transition is the process of moving from ________.

Had the government taken over (with compensation)the assets of Global Trading but not those of any other company,the government's actions would be an example of ________.

A government can limit the economic activities of a foreign firm that resists its effort to introduce home-country nationals into the company.

Does greater economic freedom guarantee a higher standard of living? Provide examples of two specific countries to support your answer.

Local content regulations are primarily intended to ________.

Expropriation is best defined as the ________.

Civil conflict,tax discrimination,weak legal systems,and terrorist actions are political risks faced by MNEs operating in foreign countries.

Foreign properties expropriated by a government cannot be reclaimed.

Describe the Foreign Corrupt Practices Act,and explain how it relates to corporate social responsibility.

International companies often must customize products to comply with local standards if they are to do business in a particular country.

________ has one of the highest levels of macropolitical risk.

Political risk that affects all firms in a country is referred to as ________.

CADE Enterprises,a U.S.manufacturer,received assistance from the Overseas Private Investment Corporation when it expanded operations into Saudi Arabia.Which of the following types of support did CADE most likely receive from OPIC?

Political risk insurance is more likely to be purchased by MNEs that apply an active approach to political risk management.

Which of the following is a disadvantage of local requirement laws to foreign companies?

Expropriation is said to have occurred when a foreign national company dispossesses a home-country company through uncompetitive practices.

An investor wants to invest in a country that has a high gross national income (GNI).Which of the following countries would most likely qualify as a prospect?