11 Chapter Quiz

1.Which of the following is an example of a political factor that can impact a company’s operations?

A. Advances in manufacturing technology
B. Changes in government regulations on employment laws
C. Fluctuations in consumer spending habits
D. Innovations in marketing strategies

2. How might political instability affect a company’s business operations?

A. It could lead to more predictable economic conditions and stable consumer behavior.
B. It could result in increased operational costs due to disruptions in supply chains and changes in regulatory requirements.
C. It might provide opportunities for expansion into new markets with less competition.
D. It would likely decrease the need for compliance with environmental regulations.

3. Why are laws needed for business?

a) To make companies more money

b) To ensure fair competition

c) To help the distribution of products and services

d) To allow businesses to go overseas

4. Which of the following is the best explanation of the political environment in international business?

a) The political system of each foreign market that serves to profit only its own country

b) The economic system of each foreign market that serves to profit only its own country

c) Government activities in the international market that serve to hinder the conduct of business of another country

d) A set of factors relating to government activities and political factors that serve to either facilitate or hinder the conduct of business in a foreign country.

5. How does an informal trade barrier differ from a formal trade barrier?

a) An informal trade barrier is illegal, while formal trade barriers are only legal if they are approved by the World Trade Organization and they do not single out only one country.

b) A formal trade barrier involves tariffs and an informal trade barrier consists of quotas.

c) A formal trade barrier is enacted by the ruling body of a country, while an informal barrier is usually a result of a mistake in the administrative staff or an objective error that could not be predicted.

d) A formal trade barrier is imposed specifically to hinder trade, while an informal barrier isn’t primarily implemented as a trade barrier but has the effect of one.

6. Why might a business have reservations when investing in countries that have authoritarian regimes?

a) There is no unpredictability and this decreases the value of the investment.

b) Bribing dictators can be expensive.

c) It’s actually easier to deal with them because you are generally dealing with one person or a small group of people that control the country.

d) Authoritarian regimes do not subject themselves to the rule of law.