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Exam 8: The International Legal Environment of Business

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Question 51

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Joint ventures are used in host countries with fewer restrictions on foreign investment.

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Question 52

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Which of the following is true of the sovereign immunity doctrine?

A) A host government expropriates the property of a foreign corporation.
B) A host government refuses to permit a company to use the court system of the owner's country to sue the host government.
C) A host government insists that it must own more than 50 percent of a multinational joint venture.
D) Courts in the host country pass a judgment against the company that cannot be contested by courts in any other nation.

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Question 53

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Companies doing business in follow common law.

Which of the following statements is true of civil law systems?

A obligates the host government to extend fair and nondiscriminatory treatment to investors from the other country.

The World Trade Organization pact makes it more risky for multinationals to have parts built in cheap-labor countries and then brought back to the multinational's home country for use in making a product.

The is in the process of forming a Western European political and economic community with a single currency and a common external tariff barrier toward nonmembers.

Which of the following is a form of foreign direct investment?

The theory of refers to a theory of trade relationship that encourages nations to concentrate on exporting the goods they can produce most efficiently.

Compare and contrast the common law system and the civil law system.

are negotiated between two governments and obligate the host government to extend fair and nondiscriminatory treatment to investors from the other country.

In order to stimulate its local textile economy and promote the production of cotton, something that has traditionally been imported, a country decides to charge the importing agency a certain percentage of the value of the item being imported. By doing this, the government seeks to make such imported products more expensive and thus unattractive. This is an example of a(n) .

A large automobile manufacturer wants to expand its market for mid-size cars to a country with a large population and sizeable working class. In addition, this country is also known to be a source for cheap labor. This is something that could help the auto company significantly improve its production efficiency. Which of the following methods of engaging in international business will help the company best achieve these goals?

Unilateral investment treaties (UITs) obligate the host government to extend fair and nondiscriminatory treatment to investors from the other country.

Countries that follow the Romano-Germanic civil law organize their legal systems around cases, regulations, and precedents rather than around legal codes.

Explain how the sovereign immunity doctrine is a risk for companies engaged in international business.

Mediterranean and Latin American cultures base their group affiliation on .

The North American Free Trade Agreement (NAFTA), ratified in 1994, sought to eliminate barriers to the flow of goods, services, and investments among Canada, the United States, and Mexico over a 15-year period.

Discuss arbitration as a method of dispute resolution.