Chapter 23 International Law in a Global Economy. All Answers

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N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows. N A question new to this edition of the Test Bank. + A question modified from the previous edition of the Test Ban... k. = A question included in the previous edition of the Test Bank. TRUE/FALSE QUESTIONS A1. International law is a body of law that governs relations among nations. T PAGE: 441 TYPE: = NAT: AACSB Analytic AICPA Legal A2. An international custom is a general practice accepted in the international arena as law. T PAGE: 441 TYPE: = NAT: AACSB Analytic AICPA Legal A3. A treaty is a contract or other agreement between two or more nations that must be ratified by the United Nations to take effect. F PAGE: 442 TYPE: = NAT: AACSB Analytic AICPA Legal A4. Legal systems around the globe are generally divided into common law and civil law systems. T PAGE: 442 TYPE: = NAT: AACSB Analytic AICPA Legal A5. Under the principle of comity, a foreign business that deals with a U.S. business may be subject to U.S. law. T PAGE: 443 TYPE: = NAT: AACSB Analytic AICPA Legal A6. Confiscation occurs when a government seizes private property for an il¬legal pur¬pose and without just compensation. T PAGE: 444 TYPE: + NAT: AACSB Analytic AICPA Legal A7. Firms overseas have almost total legal protection against government acts in the countries in which they operate, under the act of state doctrine. F PAGE: 444 TYPE: = NAT: AACSB Analytic AICPA Legal A8. The doctrine of sover¬eign immu¬nity can immunize a foreign nation from the jurisdiction of U.S. courts. T PAGE: 444 TYPE: = NAT: AACSB Analytic AICPA Legal A9. A foreign state is immune from the jurisdiction of U.S. courts as long as the state is involved in commercial activity in the United States. F PAGE: 444 TYPE: = NAT: AACSB Analytic AICPA Legal A10. The simplest way for a U.S. firm to do business in a foreign mar¬ket is to ex-port its products directly to that market. T PAGE: 444 TYPE: = NAT: AACSB Reflective AICPA Critical Thinking A11. A party to a licensing agreement generally agrees to pay royalties on some basis. T PAGE: 445 TYPE: = NAT: AACSB Reflective AICPA Critical Thinking A12. Confiscating property without compensation does not normally violate principles of international law. F PAGE: 446 TYPE: N NAT: AACSB Analytic AICPA Legal A13. Few nations have restrictions on imports. F PAGE: 447 TYPE: + NAT: AACSB Reflective AICPA Legal A14. Congress cannot impose any restrictions on exports except taxes. F PAGE: 447 TYPE: = NAT: AACSB Analytic AICPA Legal A15. Restrictions on imports may include tariffs. T PAGE: 448 TYPE: + NAT: AACSB Analytic AICPA Legal A16. Restrictions on imports may include quotas. T PAGE: 448 TYPE: = NAT: AACSB Analytic AICPA Legal A17. Dumping is the sale of imported goods at “greater than fair value.” F PAGE: 450 TYPE: = NAT: AACSB Reflective AICPA Critical Thinking A18. The chief aim of the European Union and other trade organizations is to minimize trade barriers among their members. T PAGE: 450 TYPE: = NAT: AACSB Reflective AICPA Critical Thinking A19. A foreign citizen can bring a civil suit in a U.S. court for a violation of a treaty of the United States. T PAGE: 451 TYPE: = NAT: AACSB Analytic AICPA Legal A20. U.S. antidiscrimination laws, as they affect employment relationships, generally do not apply extraterritorially. F PAGE: 453 TYPE: N NAT: AACSB Analytic AICPA Legal MULTIPLE CHOICE QUESTIONS A1. The government of the United States and the governments of other nations have the power to enforce their respective national laws within their borders. The power to enforce international law within the borders of all nations rests with a. no court or international organization. b. the European Union. c. the International Court of Justice. d. the United Nations General Assembly. A PAGE: 441 TYPE: = NAT: AACSB Reflective AICPA Legal A2. In the global environment of business, the law of a particular nation, such as Brazil, China, or India, is classified as a. environmental law. b. global law. c. international law. d. national law. D PAGE: 441 TYPE: N NAT: AACSB Analytic AICPA Legal A3. The Association of Southeast Asian Nations is a regional trade associa¬tion that was created through a. a bilateral agreement. b. a lateral agreement. c. a multilateral agreement. d. a unilateral agreement. C PAGE: 442 TYPE: = NAT: AACSB Reflective AICPA Legal A4. China and India form an agreement to govern their commercial ex¬changes with one another. This is a. a bilateral agreement. b. a lateral agreement. c. a multilateral agreement. d. a unilateral agreement. A PAGE: 442 TYPE: = NAT: AACSB Reflective AICPA Legal A5. Yokima, Ltd., and Zenota, S.A., transact an international sale of goods. For these parties, and other international buyers and sellers, the United Nations Convention on Contracts for the International Sale of Goods spells out the duties that apply a. if Article 2 of the Uniform Commercial Code does not apply. b. if a dispute is submitted to the International Court of Justice. c. if the parties have not agreed otherwise in their contracts. d. under all circumstances. C PAGE: 442 TYPE: = NAT: AACSB Analytic AICPA Legal A6. Chile has a civil law system. In theory, in this system, the courts a. are obligated to follow the doctrine of stare decisis. b. may not develop their own laws. c. must create new rules of law. d. must develop legal concepts by case law. B PAGE: 442 TYPE: = NAT: AACSB Analytic AICPA Legal A7. Business Abroad, Inc., a U.S. firm, obtains a judgment in a U.S. court against Quang Tri, Ltd., a Vietnamese business. Whether the court’s judgment will be enforced by a court in Vietnam depends on the Vietnamese court’s application of a. the act of state doctrine. b. the doctrine of sovereign immunity. c. the principle of comity. d. the World Trade Organization . C PAGE: 443 TYPE: = NAT: AACSB Reflective AICPA Legal A8. Sudan seizes the assets of Triage Medico, Inc., a U.S. firm. Triage’s recovery from Sudan in a U.S. court may be prevented by a. the act of state doctrine. b. the doctrine of sovereign immunity. c. the Foreign Corrupt Practices Act. d. the principle of comity. A PAGE: 443 TYPE: = NAT: AACSB Reflective AICPA Legal A9. Michael, a citizen of Ireland, and Nina, a citizen of the United States, enter into a contract. When Nina breaches the contract, Michael obtains an award of damages in an Irish court. He asks a U.S. court to enforce the award. The U.S. court defers to and enforces the Irish court’s decree. This is a. a travesty of justice. b. the act of state doctrine. c. the doctrine of sovereign immunity. d. the principle of comity. D PAGE: 443 TYPE: = NAT: AACSB Reflective AICPA Legal A10. Noggin Development Corporation, a U.S. firm, wishes to participate, but limit its involvement, in Middle Eastern markets. Noggin empowers Ousai, Ltd., a Dubai firm, to enter into contracts in certain countries on Noggin’s behalf. This is a. a distribution agreement. b. an agency relationship. c. indirect exporting. d. licensing. B PAGE: 444 TYPE: N NAT: AACSB Reflective AICPA Legal A11. Significant business develops in Mexico for Natural Beauty Cosmetics, Inc., a U.S. firm. Natural Beauty appoints Ojos, Ltd., a Mexican firm, to act as Natural Beauty’s marketing representative in Mexico. This is a. a joint venture. b. franchising. c. indirect exporting. d. licensing. C PAGE: 444 TYPE: N NAT: AACSB Reflective AICPA Legal A12. Diners Corporation, a U.S. firm, signs a contract with Essen, A,G., a German firm, to give Essen the right to use Diners’ trademark in restau¬rants in Germany. This is a. a distribution agreement. b. a joint venture. c. direct exporting. d. licensing. D PAGE: 445 TYPE: = NAT: AACSB Reflective AICPA Legal A13. Simpatico Business, Inc., a U.S. firm, expands into international markets through a joint venture. In the venture, Simpatico shares a. both the profits and liabilities. b. none of the profits or liabilities. c. the profits but not the liabilities. d. the liabilities but not the profits. D PAGE: 445 TYPE: + NAT: AACSB Reflective AICPA Legal A14. Continents Two Corporation, a U.S. firm, establishes a wholly owned subsidiary firm in Argentina. In this situation, Continents Two retains complete control and authority over a. all of the operation. b. only the part of the operation in the United States. c. none of the operation. d. about half of the operation. A PAGE: 445 TYPE: N NAT: AACSB Analytic AICPA Legal A15. Agro Co-op, Inc., and Bio Feed Corporation are exporting firms that join together to export a line of products. Agro Co-op and Bio Feed apply to Charter Bank for a loan to fund their effort. Under federal law, Charter and other U.S. banks are a. encouraged by credit guaranties to lend such funds. b. discouraged by administrative rules to make such loans. c. asked by enforcement agencies to report such requests. d. banned by statute from opening such credit lines. A PAGE: 447 TYPE: N NAT: AACSB Reflective AICPA Legal A16. Senator Smith and other politicians want to restrict the flow of technologically advanced products and data from the United States to other countries. To restrict or encourage exports, Congress can a. do nothing. b. assess antidumping duties. c. impose export taxes. d. set export quotas. D PAGE: 447 TYPE: = NAT: AACSB Reflective AICPA Legal A17. The United States taxes each barrel of imported oil at a flat rate. This is a. an antidumping duty. b. a dumping duty. c. a quota. d. a tariff. D PAGE: 448 TYPE: = NAT: AACSB Analytic AICPA Legal A18. Wang Ltd., a Chinese firm, imports its goods into the United States and offers those goods for sale at “less than fair value.” This is a. confiscation. b. defalcation. c. dumping. d. expropriation. C PAGE: 450 TYPE: = NAT: AACSB Reflective AICPA Legal A19. Nick, or Nora, or any U.S. citizen, can bring a civil suit in a U.S. court against a foreign entity a. for a tort allegedly committed in the United States only. b. for a tort allegedly committed in the United States or overseas. c. for a tort allegedly committed overseas only. d. under no circumstances. B PAGE: 451 TYPE: + NAT: AACSB Analytic AICPA Legal A20. Qang and other foreign citizens allege human rights violations committed overseas by the government of Burma on behalf of Railway Construction Company, a U.S. firm. To seek redress for their injuries in a U.S. court, these citizens can a. subject the private company to the provisions of the Sherman Act. b. bring civil suits under the Alien Tort Claims Act. c. file criminal complaints under Title VII of the Civil Rights Act. d. do nothing. B PAGE: 451 TYPE: + NAT: AACSB Reflective AICPA Legal A1. When a nation moves from a state-controlled economy toward free enterprise, it must develop a new set of business laws. If you could start from scratch, what kind of business law system would you adopt—a civil law system or a common law system? What factors should be considered in deciding the business regulations to impose? A2. International Diversified Corporation (IDC) owns assets in Tagistan, a new country in Asia. The gov¬ernment of Tagistan wants to nationalize all assets owned by foreign firms and investors. What can IDC do? Can it at least obtain payment for the assets? [Show More]

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