International Marketing 10th Edition Czinkota Test Bank 1

Test Bank for International Marketing 10th Edition
Czinkota 113362751X 9781133627517

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Chapter 5: The Political and Legal Environment
TRUE/FALSE
1. Political and legal factors often play critical roles in international marketing activities.
ANS: T PTS: 1 DIF: Easy REF: p. 132

OBJ: LO: 5-1 NAT: BUSPROG: Analytic
STA: DISC: International Perspective KEY: Bloom's: Knowledge
2. In making decisions about a firm’s international marketing activities, managers will need to
concentrate on the legal circumstances of the host country but not the home country.
ANS: F PTS: 1 DIF: Moderate REF: p. 133

3. The term “embargo” refers to products that are packaged in one country in a particular way, and then
altered to fit the international marketplace in another country.

4. Trade sanctions and embargoes can be used interchangeably.

5. Economic sanctions that are imposed unilaterally by one country tend to be more effective than those
imposed multilaterally by countries.

6. One key concern with trade sanctions is the fact that governments often consider them as being free of
cost.
ANS: T PTS: 1 DIF: Moderate REF: p. 135

7. Permitting a foreign national from a controlled country to have access to a highly sensitive computer
program in the United States is not considered as an export.

OBJ: LO: 5-2 NAT: BUSPROG: Analytic | BUSPROG: Technology
8. Nuclear nonproliferation is a determinant for export control.

9. Today’s export controls use a “strategic balance” approach affecting specific hotspots rather than the
“tactical balance” approach.

10. Voluntary restraint agreements are self-imposed restrictions aimed at avoiding punitive trade actions
from the host.

11. Boycotts place a tax on imports and raise prices.

12. Political risk can be the result of government action, but it can also be outside the control of
government.

13. Expropriation is a term used to describe the U.S. government's investment in foreign technology with
the intent to spur development of trade partners.

14. Code law is based on tradition and depends less on written statutes than on precedent and custom.
ANS: F PTS: 1 DIF: Easy REF: p. 147

OBJ: LO: 5-3 NAT: BUSPROG: Analytic | BUSPROG: Ethics
15. Countries with the common law system have much more rigid laws than those with the code law
system.
ANS: F PTS: 1 DIF: Easy REF: p. 147

16. Lobbyists are well-connected individuals and firms that can provide access to policymakers and
legislators.

17. If supply chains are complex and multinational, the effects of terrorism can potentially spread across
the globe from an initially local focus.

18. Corporate governance frameworks ensure the board of directors’ accountability to the company and its
shareholders.

19. As firms become increasingly multinational, governments respond by increasing global cooperation to
achieve the same principles of taxation and corporate ethics laws across nations.

20. Bribing foreign officials in order to gain contracts is considered permissible in the United States.

MULTIPLE CHOICE
1. When products and goods enter a market in ways not desired by their manufacturers, this is known as
_____ market activities.
a. black
b. white
c. green
d. gray
ANS: D PTS: 1 DIF: Easy REF: p. 133
2. _____ refer to governmental actions that distort the free flow of trade in goods, services, or ideas for
decidedly adversarial and political, rather than strictly economic, purposes.
a. Gray market activities
b. Tariffs and barriers
c. Trade sanctions and embargoes
d. Expropriation and confiscation
ANS: C PTS: 1 DIF: Moderate REF: p. 134
3. The charter of the United Nations allows for sanctions as an enforcement action by regional agencies.
Which of the following is NOT an example of a regional agency?
a. The Organization of American Unity
b. The Organization of African Unity
c. The Organization of American States
d. The Arab League
ANS: A PTS: 1 DIF: Moderate REF: p. 134
STA: DISC: International Perspective KEY: Bloom's: Application
4. When the United Nations (UN) votes on economic sanctions for a country:
a. it will apply only to nations who are members of the UN.
b. any permanent member of the Security Council can veto the sanctions.
c. the government must consider them as being free of cost.
d. a new set of rules must be written for the specific infractions.
ANS: B PTS: 1 DIF: Challenging REF: p. 134
STA: DISC: International Perspective KEY: Bloom's: Comprehension
5. _____ are designed to deny or at least delay the acquisition of strategically important goods by
adversaries.
a. Antidumping laws
b. Export control systems
c. Voluntary restraint agreements
d. Domestication activities
ANS: B PTS: 1 DIF: Easy REF: p. 135
6. Which of the following is an example of a dual-use item?

a. Handbags
b. Life jackets
c. Compact cars
d. Artillery
ANS: B PTS: 1 DIF: Challenging REF: p. 135
STA: DISC: International Perspective KEY: Bloom's: Application
7. Which of the following is true about export controls?

a. The legal basis for export controls is similar across nations.
b. All export control systems make controls the rule rather than exception.
c. The U.S. export control system is based on the Export Administration Act.
d. Services and ideas are not covered under export controls.
ANS: C PTS: 1 DIF: Moderate REF: p. 136
STA: DISC: International Perspective KEY: Bloom's: Comprehension
8. As required by government mandate, anyone wishing to export a product from the United States needs
a(n) _____.
a. extended collective license
b. quasi-contract
c. voluntary export restraint agreement
d. export license
ANS: D PTS: 1 DIF: Easy REF: p. 136
9. Which of the following is NOT a method of controlling imports?

a. Confiscation
b. Quota systems
c. Voluntary restraint agreements
d. Tariffs
ANS: A PTS: 1 DIF: Easy REF: p. 140
10. When firms refuse to do business with someone, often for political reasons, this is known as _____.
a. image tarnishing
b. expropriation
c. boycotting
d. confiscation
ANS: C PTS: 1 DIF: Easy REF: p. 141
OBJ: LO: 5-2 NAT: BUSPROG: Analytic | BUSPROG: Diversity
11. Which of the following is true about import controls?

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For every life that may have been spared by the signing of the
questionable Yalta agreement, thousands of American and Korean GI’s,
and Korean civilians are now dead, dying and maimed. This little
Florida-shaped country of Korea, cut up by outsiders, is a tragic example
of failure to think beyond military objectives. We cannot defend Korea
from Russian attack without an all-out war. We can only prolong the
agony. If it was right for us to leave Korea in 1949, can we, honestly,
justify our re-entry there in 1950—at the price we have paid?
There yet remain other fates to be decided—Formosa, the Philippines
and numerous islands of the Pacific, whether we occupy them or not.
Have we not already proven that, “It is fantastic to imagine that we can
convert our enemies into our friends by treating our friends as if they
were our enemies”?
But to understand the overall picture, one must begin with a
knowledge of the background that has made China and the United States
the estranged bed-fellow nations which they have become. The historic
removal of Douglas MacArthur from all of his commands in the Far
East, by President Truman at 1 a. m. on April 11, 1951, will have far-
reaching effects. Due to this move, disaster looms before us larger than
ever, especially for the United States and Great Britain. Nearly a month
before the news of the impending MacArthur dismissal by the President
“leaked” to the American press, headlines had appeared in Danish
newspapers saying: “British Say ‘MacArthur Must go’.”
The average reader, in all probability, sees only a difference of opinion
in the policies of the political and military leadership on the conduct of
World War III, but the facts go deeper than this. There appears to be a
determination on the part of those who are playing international politics,
to obtain and control world power. MacArthur, definitely, was the
greatest single stumbling block in their path. To be in a position,
militarily, to bomb enemy supply sources, and yet forbidden, by political
directives from Washington, to do this, put greater handicaps on
MacArthur than he was willing to take. With the MacArthur removal,
Truman will bend every effort toward silencing all who remain opposed
to his Acheson-approved manifesto.
On April 1, 1951, correspondent Kenneth de Courcy (Intelligence
Digest—A Review of World Affairs) cabled from London:
“There is no longer even a definite objective in the Korean
war. Each nation or organization concerned in it seems to
have a different objective; while each high commander seems
to have a private idea of what would represent success or
victory. If the powers that be cannot agree even in Korea, it is
hardly surprising that they cannot devise an agreed strategy
for the entire world. Mr. Truman, who is becoming very tired,
seems determined to await decisive trends of public opinion.
His private views and conclusions are not likely to be pressed
unless he is convinced that public opinion is more than ready
for them. In fact, American public opinion is far ahead of its
leadership. Mr. Truman however, has not yet been convinced
of this....
“The Kremlin reckons on a steadily progressive weakening
of the Atlantic group of powers. Meanwhile, it is intended to
increase the flow of warlike supplies and indirect help to
Asiatic Communist forces, rather than to the European
satellites. Major developments are timed to take place in Asia
before the end of this year, which by the middle of 1952, will
give the USSR access to certain valuable and essential raw
materials which now have to be purchased from outside the
Soviet system.... The Kremlin thinks war with the West will
become inevitable ... but hopes to be able to postpone this war
until Burma and India have been brought within the Soviet
sphere of influence.”
To follow the MacArthur program has been called a “colossal
gamble,” but what greater gamble can there be than sitting back and
waiting for the enemy to come and destroy us? Was England able to stop
Hitler by appeasement? Nor will the present British Labor Government
be able to silence the Chinese Communists by promising them Formosa
and a hand in the Japanese peace treaty if, indeed, the Japanese accept
such a treaty.
Those who still believe that a “deal” can be made with Stalin or
Communists anywhere, just do not know the history of Communism or
of Communism’s forbears. MacArthur’s removal from the scene at this
time is cause for jubilation among the radically inclined the world over,
for this particular American hero was Stalin’s Enemy Number One.
Another great boon to the Chinese and Korean Reds is that Truman
has virtually promised them that their Manchurian bases will not be
bombed by us, unless of course, they step out of line and bomb us first.
Thus, they can continue to kill and maim our boys without fear of too
much retaliation on our part. We won two great victories on the
battlefields of World Wars I and II, but we lost them both at conference
tables. Political double-talk always gives the enemy a far greater victory
than could be won on the battlefield.
The political moves made by the powers that be in Washington serve
only to cancel out our military victories. On November 16, 1950, when
Russia vetoed the Security Council’s resolution demanding that China
clear out of Korea, she put the blame for the Korean war squarely in her
own lap. But as long as Stalin and the Kremlin remain within the United
Nations, this international body politic will remain hamstrung, for it will
be used as an instrument to give aid and comfort to Communists
everywhere in achieving military aggression against the Western
Hemisphere. For Russia, as a member of the United Nations, with veto
power, has sent no troops to Korea to fight the aggression. But why
should she be exempt when others are not? A United Nations operating
in opposite directions cannot be very united. With one side of the UN
fighting aggression and another faction pushing it, defeat can be the only
outcome. When the Korean war first burst into actual flame, and we
discovered that Russia was openly, as well as secretly, supporting the
North Koreans, why did we not then expel her from the UN and declare
her an enemy of the peace? Had we had the courage to do so, the story
would be different today. Now, with our hands tied behind our backs, we
wait for the enemy to make the next move in the most tragic game of
chess ever played with flesh and blood pawns.
It is difficult to understand why General MacArthur was prevented
from arming some 400,000 unarmed South Koreans. On April 6, 1951,
he stated that political decisions beyond his authority prevented him
from doing this, but why were they deprived of fighting for their own
land? And why were American fathers and sons to be butchered in battle
to free those who would gladly fight for themselves, but for political
interference? No short term good ever derived from a long term evil, nor
can any amount of political expediency replace military emergency.
Terrible sabotage in this country is not unlikely. On April 7, 1951, J.
Edgar Hoover stood before the Senate Committee and said: “A hard core
of Communists trained in sabotage is ready to strike at vital industries
...” and he added that this would be one of the most effective weapons
that Stalin could use against the United States.
Despite denials from the White House and State Department, we know
that Russia has a solid network of spies and undercover agents operating
in every department of our national life, operating to destroy us from
within, circumventing the need for any long-range attack.
To those who stubbornly maintain that the blood of more than sixty
thousand American boys killed or wounded in Korea, in addition to an
almost equal number of what are called non-battle casualties, still
constitutes merely a “police action,” I say in all reverence, may God
forgive you. We are at war now. No amount of waiting or appeasement
will put off World War III. We are in it up to our necks.
Your First Step....
“The journey of a thousand miles begins with just one step ...” says a
Chinese proverb.
Millions of Americans today know that we have to take that “one
step” individually, if order is to be restored to the national house in
which we live.
You have read in this volume of the many wrong steps in the wrong
direction that have been taken by our national planners. These have
resulted in the human turmoil, the domestic unrest, and in undeclared
war against Communism. Our battlefield casualties have already passed
the seventy thousand mark.
Every American must act NOW to preserve our Constitutional Way of
Life. But before concerted political action can be taken the facts must be
known. RED BLIGHT tells these facts!
Now you can take your first step in the right direction by helping to
disseminate the truth about the RED BLIGHT that is engulfing the earth.
You can do this by placing RED BLIGHT into the hands of as many
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Transcriber’s Notes
pg 10 Changed at no time had be to: he
pg 13 Changed spelling of Moa Tse-tung to: Mao
pg 15 Changed swayed to its ryhthmic to: rhythmic
pg 22 Changed methods of Genghis Kahn to: Khan
pg 23 Changed that these are dissillusioning to: disillusioning
pg 25 Changed Eighth Regiment at Fort Screvan to: Screven
pg 26 Added quote after: finest regiments in the Army.
pg 27 Changed May God forebid to: forbid
pg 31 Changed this last shipemnt to: shipment
pg 32 Changed proved to be a diobolical to: diabolical
pg 46 Changed Moa’s childhood was to: Mao’s
pg 50 Changed devotion to Confuscius to: Confucius
pg 52 Changed fire of vitrolic to: vitriolic
pg 56 Replaced comma with period at: foreign dignitaries with ease
pg 56 Changed did such a consumate to: consummate
pg 58 Changed more violent and vitrolic to: vitriolic
pg 58 Added double quote to end of sentence: return to China from Europe?
pg 66 Changed publicity she so abhored to: abhorred
pg 67 Changed capitalization of world Anti-Imperialist to: World
pg 67 Changed capitalization of a cable to the anti-Imperialist to: Anti
pg 67 Changed mind and persuasive personalitly to: personality
pg 72 Changed horsemen in the earily to: early
pg 73 Changed dirty and disheaveled to: disheveled
pg 86 Changed effort is wasted on superflous to: superfluous
pg 91 Changed warrant a demontration to: demonstration
pg 105 Changed capitalization of it had become obvious to: It
pg 135 Changed established in this county to: country
pg 138 Changed humiliation and degredation to: degradation
pg 141 Changed economically and phychologically to: psychologically
pg 142 Changed use our almost unprecendented to: unprecedented
pg 146 Changed dispatch datelined Teheran to: Tehran
pg 152 Changed Russian reentry to: re-entry
pg 153 Changed facilitate China’s post-war to: postwar
pg 154 Added comma after: Korea, the political
pg 155 Changed bound ideolologically to: ideologically
pg 163 Changed developments as portentious to: portentous
pg 164 Changed program of assistant to: assistance
pg 164 Changed eight years of war. to: war,
pg 166 Changed to preserve Korea to: Korea’s
pg 167 Removed comma from: first meeting March 8, 1946
pg 169 Changed continue as long is to: as
pg 169 Changed In the over-all administration to: overall
pg 174 Added space between words eastern and half
pg 177 Changed land for rise to: rice
pg 177 Changed chaotic hyperinflation to: hyper-inflation
pg 178 Removed period after: 1915-19 to 2.0
pg 178 Changed diet until indigeous to: indigenous
pg 179 Changed over 300 gram to: grams
pg 179 Changed salt an sugar to: and
pg 180 Changed long-staple Egyption to: Egyptian
pg 181 Changed in the time alloted to: allotted
pg 182 Removed duplicate word and their own own country
pg 184 Changed Army in its over-all to: overall
pg 186 Changed expansion of miltaristic to: militaristic
pg 189 Changed Charles Schribner’s to: Scribner’s
pg 191 Changed Education, Irrington-on Hudson to: Irvington
pg 193 Changed spelling of Aristole to Aristotle and changed page number from
143 to 144
pg 193 Changed spelling of Centrol People’s Government to: Central
pg 193 Changed spelling of Crinese New Year to: Chinese
pg 193 Changed period to semicolon after: Drugs, use of, 90, 91
pg 193 Changed period to semicolon after: Chiang Kai-shek, Madame, 64, 104,
106
pg 194 Fixed page references under Hypnotism
pg 194 Replaced semi-colon with period after: International News Service
pg 195 Changed spelling under Mindszenty of Hynotism to: Hypnotism
pg 196 Changed Sun Yet-sen to: Yat-sen
pg 196 Changed spelling of: Hynotism under Vogeler to: Hypnotism
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Chapter 5: The Political and Legal Environment

ANS: T PTS: 1 DIF: Easy REF: p. 132

ANS: F PTS: 1 DIF: Moderate REF: p. 133

ANS: F PTS: 1 DIF: Moderate REF: p. 134

4. Trade sanctions and embargoes can be used interchangeably.

ANS: T PTS: 1 DIF: Easy REF: p. 134

ANS: F PTS: 1 DIF: Moderate REF: p. 135

ANS: T PTS: 1 DIF: Moderate REF: p. 135

ANS: F PTS: 1 DIF: Moderate REF: p. 136

8. Nuclear nonproliferation is a determinant for export control.

ANS: T PTS: 1 DIF: Easy REF: p. 136

ANS: F PTS: 1 DIF: Moderate REF: p. 137

ANS: T PTS: 1 DIF: Moderate REF: p. 140

11. Boycotts place a tax on imports and raise prices.

ANS: F PTS: 1 DIF: Moderate REF: p. 141

ANS: T PTS: 1 DIF: Moderate REF: p. 142

ANS: F PTS: 1 DIF: Moderate REF: p. 143

ANS: F PTS: 1 DIF: Easy REF: p. 147

ANS: F PTS: 1 DIF: Easy REF: p. 147

ANS: T PTS: 1 DIF: Easy REF: p. 150

ANS: T PTS: 1 DIF: Moderate REF: p. 155

ANS: T PTS: 1 DIF: Moderate REF: p. 157

ANS: T PTS: 1 DIF: Moderate REF: p. 158

ANS: F PTS: 1 DIF: Moderate REF: p. 161

6. Which of the following is an example of a dual-use item?

7. Which of the following is true about export controls?

9. Which of the following is NOT a method of controlling imports?

11. Which of the following is true about import controls?

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