Republic of the Philippines

JOSE RIZAL MEMORIAL STATE UNIVERSITY

The Premier University in Zamboanga del Norte
TAMPILISAN CAMPUS
Znac, Tampilisan, Zamboanga del Norte Registration No.
62Q17082

COLLEGE OF BUSINESS ADMINISTRATION

INTERNATIONAL BUSINESS AND TRADE 2nd LONG EXAMINATION

GENERAL INSTRUCTIONS: © JRBR

1. ERASURES OR ANY FORM OF ALTERATIONS (i.e. super-impositions) IS ALLOWED AT MOST FOUR TIMES.
2. DO NOT WRITE ANYTHING ON THE TEST QUESTIONNAIRE. A separate answer sheet shall be provided. Use the
back portion of your answer sheet as your scratch paper.

True or False (2 points each)

1. I. A legal risk can be defined as the certainty that a trading partner will opportunistically break a contract or
expropriate property rights.
II. When legal risks in a country are high, an international business might hesitate before entering into a long-term
contract or joint-venture agreement with a firm in that country.
a. First statement is correct, second statement is incorrect
b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect
2. I. An economic risk can be defined as the likelihood that economic mismanagement will cause drastic changes in
a country’s business environment that hurt the profit and other goals of a particular business enterprise.
II. Political risk has been defined as the certainty that political forces will cause drastic changes in a country’s
business environment that adversely affect the profit and other goals of a business enterprise.
a. First statement is correct, second statement is incorrect
b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect
3. I. A number of political, economic, and legal factors determine the costs of doing business in a country.
II. A country’s economic system and property rights regime are reasonably good predictors of sustainability.
a. First statement is correct, second statement is incorrect
b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect
4. I. A well-functioning market economy requires laws protecting private property rights and providing mechanisms
for contract enforcement.
II. The foreign investor, who usually is a major provider of capital, is often able to use control over a critical
resource (money) to push through needed change.
a. First statement is correct, second statement is incorrect
b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect
5. I. Privatization is seen as a way to stimulate gains in economic efficiency by denying new private owners a
powerful incentive—the reward of greater profits—to search for increases in productivity, to enter new markets,
and to exit losing ones.
II. Privatization transfers the ownership of state property into the hands of private individuals, frequently by the
sale of state assets through an auction.
a. First statement is correct, second statement is incorrect
b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect
6. I. Regulation involves removing legal restrictions to the free play of markets, the establishment of private
enterprises, and the manner in which private enterprises operate.
II. The shift toward a market-based economic system often entails a number of steps: deregulation, privatization,
and creation of a legal system to safeguard property rights.
a. First statement is correct, second statement is incorrect
b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect
7. I. Totalitarian states, by limiting human freedom, also suppress human development and therefore are detrimental
to progress.
II. Strong legal protection of property rights is another requirement for a business environment to be conducive to
innovation, entrepreneurial activity, and hence economic growth.
a. First statement is correct, second statement is incorrect
 b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect
8. I. Entrepreneurs first commercialize innovative new products and processes, and entrepreneurial activity provides
much of the dynamism in an economy.
II. Entrepreneurship is the development of new products, processes, organizations, management practices, and
strategies.
a. First statement is correct, second statement is incorrect
b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect
9. I. Purchasing power parity (PPP)adjustment allows for a more direct comparison of living standards in different
countries.
II. Gross Domestic Income is regarded as a yardstick for the economic activity of a country; it measures the total
annual income received by residents of a nation.
a. First statement is correct, second statement is incorrect
b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect
10. I. Product safety laws involves holding a firm and its officers responsible when a product causes injury, death, or
damage.
II. Product safety laws set certain safety standards to which a product must adhere.
a. First statement is correct, second statement is incorrect
b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect
11. I. Paris Convention for the Protection of Industrial Property The oldest international treaty concerning protection of
intellectual property, which has been signed by 169 nations.
II. World Intellectual Property Organization An international organization whose members sign treaties to agree to
protect intellectual property.
a. First statement is correct, second statement is incorrect
b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect
12. I. The philosophy behind intellectual property laws is to reward the originator of a new invention, book, musical
record, clothes design, restaurant chain, and the like, for his or her idea and effort.
II. Trademarks Designs and names, often officially registered, by which merchants or manufacturers designate
and differentiate their products.
a. First statement is correct, second statement is incorrect
b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect
13. I. Political economy is the system of government in any nation.
II. Socialism is a political system that stresses the primacy of collective goals over individual goals.
a. First statement is correct, second statement is incorrect
b. Both statements are correct
c. First statement is incorrect, second statement is correct
d. Both statements are incorrect