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Dynamic Business Law 3rd Edition By Nancy K. Kubasek and M. Neil Browne – Test Bank
Chapter 06
International and Comparative Law
True / False Questions
1. | The terms international law and comparative law do not mean the same thing.
True    False |
2. | When doing business internationally, a foreign sales representative does the same thing as a distributor.
True    False |
3. | A franchise agreement is the same thing as a joint venture.
True    False |
4. | Because ethical issues vary from country to country, international business persons should not take ethical considerations into account in the decision-making process.
True    False |
5. | The General Agreement on Tariffs and Trade became effective in 2000.
True    False |
6. | As understood in the General Agreement on Tariffs and Trade, a subsidy is a government financial contribution that confers a benefit on a specific industry or enterprise.
True    False |
7. | In a multilateral free trade agreement, three or more states agree to reduce and gradually eliminate tariffs and other trade barriers.
True    False |
8. | The United States is not a party to the Central American Free Trade Agreement.
True    False |
9. | The European Union is an example of a customs union.
True    False |
10. | The United States has no bilateral trade agreements.
True    False |
11. | A foreign company that maintains a passive website advertising the company’s services is subject to personal jurisdiction in any state in the U.S. because the website may result in sales in the U.S.
True    False |
Multiple Choice Questions
12. | Which of the following best describes the term “comparative law?”
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13. | A reference to laws governing the conduct of states and international organizations and their relationships with one another is ______.
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14. | Which of the following is true regarding international organizations?
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15. | What has the U.S. Supreme Court held regarding whether U.S. courts must rely on customary international law?
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16. | Which of the following is an international agreement?
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17. | A company that sends its products to a foreign marketplace for sale has engaged in ______.
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18. | An agent who distributes, represents, or sells goods on behalf of a foreign seller is referred to as a[n] ______.
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19. | A[n] _____ purchases goods from a seller for resale in a foreign market and actually takes title to the goods assuming the risk of being unable to resell them.
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20. | How does ratification of international agreements occur in the U.S.?
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21. | _____ prohibits U.S. companies from offering or paying bribes to foreign government officials, political parties, and candidates for office for the purpose of obtaining or retaining business.
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22. | Which of the following is a tax levied on imported goods?
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23. | Which of the following is true regarding nontariff barriers?
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24. | Which of the following is a comprehensive multilateral trading system designed to achieve distortion-free international trade through the minimization of tariffs and removal of artificial barriers?
|
25. | The ____ facilitates international cooperation in opening markets and provides a forum for future trade negotiations and the settlement of international trade disputes.
|
26. | _____ principle requires that World Trade Organization member states treat like goods coming from other World Trade Organization member states on an equal basis.
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27. | Which of the following is a practice wherein an exporter sells products in a foreign state for less than the price charged for the same or comparable goods in the exporter’s home market?
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28. | Which of the following is one of the three basic types of subsidies?
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29. | The ____ allows recognized governments of WTO member states to bring an action alleging a violation of the GATT.
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30. | Which of the following countries are signatories to the North American Free Trade Agreement?
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31. | A ____ is a free trade area with the additional feature of a common external tariff on products originating from outside the union.
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32. | Many ______ are derived from Roman law.
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33. | Which of the following is a characteristic of civil law?
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34. | In the civil law system, which of the following has the primary responsibility for the development of evidence?
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35. | Which of the following systems originated from the English legal system?
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36. | Which type of legal system exists in North Korea?
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37. | Which of the following is literally the “law of merchants?”
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38. | Which of the following is false regarding the Convention on the International Sale of Goods?
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39. | The Convention on the International Sale of Goods recognizes a concept by which a buyer may give notice to the seller that delivery will be accepted beyond the time prescribed in the contract. That concept is known as _____________.
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40. | Which of the following references a standard meaning that either the employer or the employee may terminate the employment relationship at any time?
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41. | Which of the following is true regarding minimum-wage laws?
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42. | Which of the following prohibits slavery and grants everyone the right to free choice of employment, just and favorable conditions of work, reasonable limitations on working hours, and compensation adequate to provide for the worker’s health and that of his or her family?
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43. | Which of the following refers to the power of a court over persons appearing before it?
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44. | ____ permits adjudication of any claims against a defendant regardless of whether the claim has anything to do with the forum.
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45. | Which of the following is a multilateral convention establishing procedures for transnational discovery between private persons in different states?
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46. | Which of the following is an international agreement governing the arbitration of private international disputes that has been ratified by the U.S.?
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47. | ____ is the type of alternative dispute resolution procedure wherein disputes are submitted for resolution to private, nonofficial persons selected in a manner provided by law or the agreement of the parties.
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48. | Which of the following is true regarding the enforceability of foreign judgments in the United States?
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49. | What is the federal minimum wage per hour in the U.S.?
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50. | Which of the following is a doctrine that permits courts to decline to exercise jurisdiction where there is a more convenient forum to hear the case?
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“Miracle Face.” Tara developed a great new type of face cream guaranteed to provide total sun protection, remove wrinkles, and result in anyone looking at least ten years younger. Her product, Miracle Face, became extremely popular in the U.S., where she has several shops, and also in other countries to which it was shipped. Tara has a number of individuals in other countries seeking to team with her in selling Miracle Face. Sam, a citizen of Mexico, asks that she grant him permission to use her name and any associated trademarks, and allow him to sell Miracle Face in Mexico. Tara has an offer, however, from another Mexican citizen, Maria. Maria proposes that she and Tara associate together, open a business to sell Miracle Face, and share profits and management responsibilities. Tara has also thought about opening her own business in Mexico in conformity with Mexican laws. She would then, hire employees in Mexico to sell the product. Another matter Tara has considered is simply arranging for her products to be shipped to Mexico for sale, and she is interested in the effect of any trade agreements in effect between the U.S. and Mexico. |
51. | Assuming that Tara decides to make the deal Sam proposes, Sam would be referred to as a(n) _____ and Tara would be referred to as a(n) ______.
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52. | Assuming that Tara decides to proceed as Maria proposes, their arrangement would be a[n] ______.
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53. | If Tara simply opens her own business in Mexico in conformity with Mexican laws and hires employees in Mexico to sell the product, she would have opened a[n] ______.
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54. | If Tara ships Miracle Face to Mexico for sale, she would be involved in the _____ of goods.
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55. | Which of the following should Tara consider with regard to trade agreements between the U.S. and Mexico?
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“Employment law.” Clare, who has a successful pet grooming business, is planning to expand her operations from the U.S. into Canada and perhaps Mexico. A friend of hers, Bill, told her that she should carefully investigate the laws in those countries before she proceeded. Clare responded, however, that she was not concerned because by international treaty, and under NAFTA, so long as she is a U.S. citizen, she only has to obey the U.S. laws. Laws of other countries would not apply to her business operations. Clare also replied that any other country would have the same strict employment-at-will standard as exists in the U.S. She tells him the strict employment-at-will standard has not changed over the years, and that the nature of the relationship between employer and employee remains untouched. |
56. | Which of the following is true regarding Clare’s statement that so long as she obeys the laws of the U.S., she does not need to be concerned about laws of other countries?
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57. | What concept is Clare referencing when she mentions employment-at-will?
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58. | Is Clare correct that there has been no change in the concept of employment-at-will in this country and that the relationship between employer and employee has remained the same?
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“Weeds.” Susie developed a product guaranteed to immediately kill weeds, but absolutely no other type of grass or shrub. She has encountered several individuals and businesses in other countries who would like to enter into contracts with her and market her products internationally. She went to Willie, who just graduated law school and has yet to pass the bar, and asks him for advice regarding those contracts. Willie proceeded to tell her that she should simply enter into the same type of contract with international businesses and individuals from other countries as she would if those individuals and businesses were located in the United States. He tells her that if there is any problem, then they will simply have to come to the United States to settle the matter, and that any issues would be determined in Susie’s home county, in her home state, and under her state’s law. He also mentions to her that she should consider contacting local foreign officials in the areas in which she would like her product sold and suggest to them that she can contribute heavily to election campaigns if she is allowed without any hassles to obtain necessary business licenses and approvals to do business. |
59. | Which of the following is true regarding Willie’s advice that she contacts foreign officials regarding election campaign contributions?
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60. | Assuming Susie wants some additional protection to guarantee that any dispute with international business will be resolved in her state in the U.S., what should she do?
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61. | Assuming Susie does not take Willie at his word and wants additional assurance that her state’s law would be applied, what should she do?
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62. | What was the result at the U.S. Supreme Court level in Goodyear Dunlop Tires Operations, S.A. v. Brown, involving whether a court in North Carolina could exercise jurisdiction over the defendant tire manufacturer and its subsidiaries who were based in Turkey and France? (The underlying lawsuit involved the deaths of North Carolina residents in France when a bus in which they were riding allegedly overturned due to problems with its tires.)
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Essay Questions
63. | As identified by Article 38 of the Statute of the International Court of Justice, what are four sources that may be used to find international law?
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64. | Identify and describe a franchise agreement, a joint venture, and an affiliate business in relation to international business.
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65. | Richard is president of a pharmaceutical company which is based in the U.S. but has a substantial amount of sales in other countries. Richard’s company manufactures drugs prescribed to those infected with HIV and other illnesses. He is informed by some missionary workers that millions of people in Africa have HIV and that many have died. He is asked to provide medication to certain locations in Africa free of charge. On the other hand, Richard has also been asked by a group in the U.S. to provide medication free of charge to HIV positive individuals in this country and to donate other drugs his company makes for the treatment of other illnesses. Richard, in good faith and based on a good review of the company’s financial position, believes that the company can afford to donate some supplies but not in the quantities requested by both foreign and U.S. concerns. What do you believe is the ethical thing for Richard to do under the circumstances?
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66. | Define tariffs and how they may be calculated. Additionally, define a nontariff barrier and list and define three types of non-tariff barriers.
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67. | Discuss in detail the World Trade Organization including how it was established and its membership. Also discuss the normal trade relations principle, national treatment, quantitative restrictions, and dumping.
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Chapter 06 International and Comparative Law Answer Key
True / False Questions
1. (p. 125) |
The terms international law and comparative law do not mean the same thing.
TRUE International law governs the conduct of states and international organizations and their relationships with one another and natural and juridical persons, while comparative law is the study of legal systems of different states. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 06-01 What is international law? Topic: International and Comparative Law  |
2. (p. 126) |
When doing business internationally, a foreign sales representative does the same thing as a distributor.
FALSE Unlike the foreign sales representative, the distributor takes title to the goods and assumes the risk of being unable to resell them at a profit. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-02 How is business transacted in the international marketplace? Topic: Doing Business Internationally  |
3. (p. 126) |
A franchise agreement is the same thing as a joint venture.
FALSE A franchise agreement is a contract whereby a company (known as the franchisor) grants permission (a license) to a foreign entity (known as a franchisee) to utilize the franchisor’s name, trademark, or copyright in the operation of a business and associated sale of goods in a foreign state. In a joint venture with a company in the host state, the parties share profits and management responsibilities for a specific project. |
AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 06-02 How is business transacted in the international marketplace? Topic: Doing Business Internationally  |
4. (p. 127) |
Because ethical issues vary from country to country, international business persons should not take ethical considerations into account in the decision-making process.
FALSE International business persons must take ethical considerations into account in the decision-making process. |
AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-03 What ethical considerations impact business in the international marketplace? Topic: Ethical Considerations  |
5. (p. 128) |
The General Agreement on Tariffs and Trade became effective in 2000.
FALSE The General Agreement on Tariffs and Trade (GATT) became effective on January 1, 1948. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-04 What is the General Agreement on Tariffs and Trade; and what are its important provisions? Topic: The General Agreement on Tariffs and Trade  |
6. (p. 129) |
As understood in the General Agreement on Tariffs and Trade, a subsidy is a government financial contribution that confers a benefit on a specific industry or enterprise.
TRUE As understood in the General Agreement on Tariffs and Trade, a subsidy is a government payment to a specific industry or enterprise. Subsidies can be direct transfers of funds, such as loans and grants; loan guarantees; tax credits; government procurement; and price supports. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 06-04 What is the General Agreement on Tariffs and Trade; and what are its important provisions? Topic: The General Agreement on Tariffs and Trade  |
7. (p. 129) |
In a multilateral free trade agreement, three or more states agree to reduce and gradually eliminate tariffs and other trade barriers.
TRUE In a multilateral free trade agreement, three or more states agree to reduce and gradually eliminate tariffs and other trade barriers. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-05 What are regional trade agreements? Topic: Regional Trade Agreements  |
8. (p. 130) |
The United States is not a party to the Central American Free Trade Agreement.
FALSE The United States is a party to the Central American Free Trade Agreement (CAFTA) with El Salvador, Guatemala, Nicaragua, Honduras, Costa Rica, and the Dominican Republic. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-05 What are regional trade agreements? Topic: Regional Trade Agreements  |
9. (p. 130) |
The European Union is an example of a customs union.
TRUE The European Union (EU) is an example of a customs union meaning a free trade area with the additional feature of a common external tariff on products originating outside the union. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-05 What are regional trade agreements? Topic: Regional Trade Agreements  |
10. (p. 130) |
The United States has no bilateral trade agreements.
FALSE The United States has several bilateral free trade agreements, including those with Australia, Bahrain, Chile, and others. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-05 What are regional trade agreements? Topic: Regional Trade Agreements  |
11. (p. 137) |
A foreign company that maintains a passive website advertising the company’s services is subject to personal jurisdiction in any state in the U.S. because the website may result in sales in the U.S.
FALSE In Pebble Beach Company v. Caddy, the court recognized that an Internet domain name and passive website alone are not enough to subject a party to jurisdiction. |
AACSB: Technology Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-08 How does employment law differ among states? Topic: Substantive Law  |
Multiple Choice Questions
12. (p. 125) |
Which of the following best describes the term “comparative law?”
Comparative law is the study of the legal systems of different states. For example, a comparative legal theorist might study contracts in the American, Chinese, and French legal systems by identifying and contrasting applicable national laws. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-01 What is international law? Topic: International and Comparative Law  |
13. (p. 125) |
A reference to laws governing the conduct of states and international organizations and their relationships with one another is ______.
International law governs the conduct of states and international organizations and their relationships with one another and with natural and juridical persons. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-01 What is international law? Topic: International and Comparative Law  |
14. (p. 125) |
Which of the following is true regarding international organizations?
The United Nations, the International Monetary Fund, the International Bank for Reconstruction and Development (World Bank), and the World Trade Organization are international organizations. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-01 What is international law? Topic: International and Comparative Law  |
15. (p. 125) |
What has the U.S. Supreme Court held regarding whether U.S. courts must rely on customary international law?
The U.S. Supreme Court has held that in the absence of a governing international agreement or controlling executive or legislative act or judicial decision, U.S. courts must rely on customary international law. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-01 What is international law? Topic: International and Comparative Law  |
16. (p. 126) |
Which of the following is an international agreement?
An international agreement is a written agreement made between states governed by international law that relates to an international matter. International agreements can be bilateral (between two states) or multilateral (between three or more states). |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-01 What is international law? Topic: International and Comparative Law  |
17. (p. 126) |
A company that sends its products to a foreign marketplace for sale has engaged in ______.
The simplest method of entering a foreign market is through the export of the company’s product to the foreign marketplace. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 06-02 How is business transacted in the international marketplace? Topic: Doing Business Internationally  |
18. (p. 126) |
An agent who distributes, represents, or sells goods on behalf of a foreign seller is referred to as a[n] ______.
A foreign sales representative is an agent who distributes, represents, or sells goods on behalf of a foreign seller and forwards orders directly to the company. |
AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 06-02 How is business transacted in the international marketplace? Topic: Doing Business Internationally  |
19. (p. 126) |
A[n] _____ purchases goods from a seller for resale in a foreign market and actually takes title to the goods assuming the risk of being unable to resell them.
Companies may engage distributors for their products, who purchase goods from a seller for resale in a foreign market. Unlike the foreign sales representative, the distributor takes title to the goods and assumes the risk of being unable to resell them at a profit. |
AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-02 How is business transacted in the international marketplace? Topic: Doing Business Internationally  |
20. (p. 126) |
How does ratification of international agreements occur in the U.S.?
In the United States, ratification of an international agreement requires the advice and consent of two-thirds of the Senate after the president submits the agreement for consideration. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-01 What is international law? Topic: International and Comparative Law  |
21. (p. 127) |
_____ prohibits U.S. companies from offering or paying bribes to foreign government officials, political parties, and candidates for office for the purpose of obtaining or retaining business.
The Foreign Corrupt Practices Act (FCPA) prohibits U.S. companies from offering or paying bribes to foreign government officials, political parties, and candidates for office for the purpose of obtaining or retaining business. |
AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 06-03 What ethical considerations impact business in the international marketplace? Topic: Ethical Considerations  |
22. (p. 127) |
Which of the following is a tax levied on imported goods?
Tariffs are taxes levied on imported goods. |
AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 06-04 What is the General Agreement on Tariffs and Trade; and what are its important provisions? Topic: The General Agreement on Tariffs and Trade  |
23. (p. 128) |
Which of the following is true regarding nontariff barriers?
A nontariff barrier is any impediment to trade other than tariffs, including quotas, embargoes, and indirect barriers. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-04 What is the General Agreement on Tariffs and Trade; and what are its important provisions? Topic: The General Agreement on Tariffs and Trade  |
24. (p. 128) |
Which of the following is a comprehensive multilateral trading system designed to achieve distortion-free international trade through the minimization of tariffs and removal of artificial barriers?
The General Agreement on Tariffs and Trade (GATT) is a comprehensive multilateral trading system designed to achieve distortion-free international trade by minimizing tariffs and removing artificial barriers. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-04 What is the General Agreement on Tariffs and Trade; and what are its important provisions? Topic: The General Agreement on Tariffs and Trade  |
25. (p. 128) |
The ____ facilitates international cooperation in opening markets and provides a forum for future trade negotiations and the settlement of international trade disputes.
The World Trade Organization facilitates international cooperation in opening markets and provides a forum for future trade negotiations and the settlement of international trade disputes. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 06-04 What is the General Agreement on Tariffs and Trade; and what are its important provisions? Topic: The General Agreement on Tariffs and Trade  |
26. (p. 128) |
_____ principle requires that World Trade Organization member states treat like goods coming from other World Trade Organization member states on an equal basis.
Article I of GATT addresses the principle of most-favored-nation relations, a principle now known as normal trade relations, through which WTO member states treat like goods coming from other WTO member states on an equal basis. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-04 What is the General Agreement on Tariffs and Trade; and what are its important provisions? Topic: The General Agreement on Tariffs and Trade  |
27. (p. 128) |
Which of the following is a practice wherein an exporter sells products in a foreign state for less than the price charged for the same or comparable goods in the exporter’s home market?
Dumping is the practice wherein an exporter sells products in a foreign state for less than the price charged for the same or comparable goods in the exporter’s home market. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-04 What is the General Agreement on Tariffs and Trade; and what are its important provisions? Topic: The General Agreement on Tariffs and Trade  |
28. (p. 129) |
Which of the following is one of the three basic types of subsidies?
There are three types of subsidies under GATT, actionable subsidies, nonactionable subsidies, and domestic subsidies. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-04 What is the General Agreement on Tariffs and Trade; and what are its important provisions? Topic: The General Agreement on Tariffs and Trade  |
29. (p. 129) |
The ____ allows recognized governments of WTO member states to bring an action alleging a violation of the GATT.
The Dispute Settlement Understanding allows recognized governments of WTO member states to bring an action alleging a violation of GATT. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-04 What is the General Agreement on Tariffs and Trade; and what are its important provisions? Topic: The General Agreement on Tariffs and Trade  |
30. (p. 129) |
Which of the following countries are signatories to the North American Free Trade Agreement?
The North American Free Trade Agreement (NAFTA) between the United States, Canada, and Mexico is a multilateral free trade agreement. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 06-05 What are regional trade agreements? Topic: Regional Trade Agreements  |
31. (p. 130) |
A ____ is a free trade area with the additional feature of a common external tariff on products originating from outside the union.
A customs union is a free trade area with the additional feature of a common external tariff on products originating outside the union. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 06-05 What are regional trade agreements? Topic: Regional Trade Agreements  |
32. (p. 130) |
Many ______ are derived from Roman law.
Many civil law systems are derived from Roman law. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-06 What is comparative law? Topic: Legal Systems and Procedures  |
33. (p. 131) |
Which of the following is a characteristic of civil law?
Civil law systems assume a separation of powers, but it is unlike the U.S. system of checks and balances. In civil law systems, the legislative branch has ultimate authority. The judicial branch interprets the code and applies it to resolve disputes. However, the judicial branch cannot create its own law. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-06 What is comparative law? Topic: Legal Systems and Procedures  |
34. (p. 131) |
In the civil law system, which of the following has the primary responsibility for the development of evidence?
The judge is primarily responsible for developing evidence by asking witnesses questions and introducing legal theories. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-06 What is comparative law? Topic: Legal Systems and Procedures  |
35. (p. 131) |
Which of the following systems originated from the English legal system?
Common law systems originated in the English legal system. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-06 What is comparative law? Topic: Legal Systems and Procedures  |
36. (p. 132) |
Which type of legal system exists in North Korea?
Socialist legal systems, such as exist in Cuba and North Korea, are based on the premise that the rights of society as a whole outweigh the rights of the individual. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-06 What is comparative law? Topic: Legal Systems and Procedures  |
37. (p. 132) |
Which of the following is literally the “law of merchants?”
One potential source of contract law is the lex mercatoria, literally the “law of merchants.” |
AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 06-07 How does contract law differ among states? Topic: Substantive Law  |
38. (p. 133) |
Which of the following is false regarding the Convention on the International Sale of Goods?
The CISG was adopted in 1980 and has been ratified by the majority of states in the developed world. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Analyze Difficulty: 3 Hard Learning Objective: 06-07 How does contract law differ among states? Topic: Substantive Law  |
39. (p. 134) |
The Convention on the International Sale of Goods recognizes a concept by which a buyer may give notice to the seller that delivery will be accepted beyond the time prescribed in the contract. That concept is known as _____________.
As recognized in Exhibit 6-2, nachfrist allows additional time for performance of a contract upon notice to the other party. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 06-08 How does employment law differ among states? Topic: Substantive Law  |
40. (p. 134) |
Which of the following references a standard meaning that either the employer or the employee may terminate the employment relationship at any time?
The employment relationship in the United States is governed by the employment-at-will standard meaning that unless an exception applies either the employer or the employee may terminate the employment relationship at any time. |
AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-08 How does employment law differ among states? Topic: Substantive Law  |
41. (p. 135) |
Which of the following is true regarding minimum-wage laws?
Australia requires that employers pay a certain amount per week. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-08 How does employment law differ among states? Topic: Substantive Law  |
42. (p. 136) |
Which of the following prohibits slavery and grants everyone the right to free choice of employment, just and favorable conditions of work, reasonable limitations on working hours, and compensation adequate to provide for the worker’s health and that of his or her family?
The Universal Declaration of Human Rights of 1948, often referred to as the basis for modern human rights law, prohibits slavery and grants everyone the right to free choice of employment, just and favorable conditions of work, reasonable limitation of working hours, and compensation adequate to provide for the worker’s health that of his or her family. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-08 How does employment law differ among states? Topic: Substantive Law  |
43. (p. 138) |
Which of the following refers to the power of a court over persons appearing before it?
Personal jurisdiction is the power of the court over the persons appearing before it. |
AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 06-09 How are disputes settled in the international marketplace? Topic: Dispute Settlement in an International Context  |
44. (p. 138) |
____ permits adjudication of any claims against a defendant regardless of whether the claim has anything to do with the forum.
General personal jurisdiction permits adjudication of any claims against a defendant regardless of whether the claim has anything to do with the forum, or location where the claim is filed. |
AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 06-09 How are disputes settled in the international marketplace? Topic: Dispute Settlement in an International Context  |
45. (p. 142-143) |
Which of the following is a multilateral convention establishing procedures for transnational discovery between private persons in different states?
The Hague Evidence Convention, a multilateral convention establishing procedures for transnational discovery between private persons in different states, has been ratified by only 31 states. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-09 How are disputes settled in the international marketplace? Topic: Dispute Settlement in an International Context  |
46. (p. 143) |
Which of the following is an international agreement governing the arbitration of private international disputes that has been ratified by the U.S.?
The New York Convention is an international agreement governing the arbitration of private international disputes and has been ratified by 148 states to date, including the United States. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-09 How are disputes settled in the international marketplace? Topic: Dispute Settlement in an International Context  |
47. (p. 143) |
____ is the type of alternative dispute resolution procedure wherein disputes are submitted for resolution to private, nonofficial persons selected in a manner provided by law or the agreement of the parties.
Arbitration is a type of alternative dispute resolution whereby disputes are submitted for resolution by private, nonofficial persons selected in a manner provided by law or the agreement of the parties. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 06-09 How are disputes settled in the international marketplace? Topic: Dispute Settlement in an International Context  |
48. (p. 143) |
Which of the following is true regarding the enforceability of foreign judgments in the United States?
In the United States, foreign judgments are not entitled to full faith and credit but are only evidence of the justice of the plaintiff’s claims. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-09 How are disputes settled in the international marketplace? Topic: Dispute Settlement in an International Context  |
49. (p. 135) |
What is the federal minimum wage per hour in the U.S.?
The current minimum wage in the U.S. is $7.25 per hour. |
AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 06-08 How does employment law differ among states? Topic: Substantive Law  |
50. (p. 140) |
Which of the following is a doctrine that permits courts to decline to exercise jurisdiction where there is a more convenient forum to hear the case?
Forum non conveniens is a doctrine that permits courts to decline to exercise jurisdiction where there is a more convenient forum to hear the case. |
AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 06-09 How are disputes settled in the international marketplace? Topic: Dispute Settlement in an International Context  |
“Miracle Face.” Tara developed a great new type of face cream guaranteed to provide total sun protection, remove wrinkles, and result in anyone looking at least ten years younger. Her product, Miracle Face, became extremely popular in the U.S., where she has several shops, and also in other countries to which it was shipped. Tara has a number of individuals in other countries seeking to team with her in selling Miracle Face. Sam, a citizen of Mexico, asks that she grant him permission to use her name and any associated trademarks, and allow him to sell Miracle Face in Mexico. Tara has an offer, however, from another Mexican citizen, Maria. Maria proposes that she and Tara associate together, open a business to sell Miracle Face, and share profits and management responsibilities. Tara has also thought about opening her own business in Mexico in conformity with Mexican laws. She would then, hire employees in Mexico to sell the product. Another matter Tara has considered is simply arranging for her products to be shipped to Mexico for sale, and she is interested in the effect of any trade agreements in effect between the U.S. and Mexico. |
51. (p. 126) |
Assuming that Tara decides to make the deal Sam proposes, Sam would be referred to as a(n) _____ and Tara would be referred to as a(n) ______.
A franchise agreement is a contract whereby a company (known as the franchisor) grants permission (a license) to a foreign entity (known as a franchisee) to utilize the franchisor’s name, trademark, or copyright in the operation of a business and associated sale of goods in a foreign state. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Analyze Difficulty: 2 Medium Learning Objective: 06-02 How is business transacted in the international marketplace? Topic: Doing Business Internationally  |
52. (p. 126) |
Assuming that Tara decides to proceed as Maria proposes, their arrangement would be a[n] ______.
In a joint venture with a company in the host state, the parties share profits and management responsibilities for a specific project. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Evaluate Difficulty: 3 Hard Learning Objective: 06-02 How is business transacted in the international marketplace? Topic: Doing Business Internationally  |
53. (p. 127) |
If Tara simply opens her own business in Mexico in conformity with Mexican laws and hires employees in Mexico to sell the product, she would have opened a[n] ______.
An affiliate is a business enterprise located in one state that is directly or indirectly owned and controlled by a company located in another state. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Analyze Difficulty: 3 Hard Learning Objective: 06-02 How is business transacted in the international marketplace? Topic: Doing Business Internationally  |
54. (p. 126) |
If Tara ships Miracle Face to Mexico for sale, she would be involved in the _____ of goods.
The simplest method of entering a foreign market is through the export of the company’s product to the foreign marketplace. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-02 How is business transacted in the international marketplace? Topic: Doing Business Internationally  |
55. (p. 129) |
Which of the following should Tara consider with regard to trade agreements between the U.S. and Mexico?
The North American Free Trade Agreement (NAFTA) between the United States, Canada, and Mexico is a multilateral free trade agreement. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 06-05 What are regional trade agreements? Topic: Regional Trade Agreements  |
“Employment law.” Clare, who has a successful pet grooming business, is planning to expand her operations from the U.S. into Canada and perhaps Mexico. A friend of hers, Bill, told her that she should carefully investigate the laws in those countries before she proceeded. Clare responded, however, that she was not concerned because by international treaty, and under NAFTA, so long as she is a U.S. citizen, she only has to obey the U.S. laws. Laws of other countries would not apply to her business operations. Clare also replied that any other country would have the same strict employment-at-will standard as exists in the U.S. She tells him the strict employment-at-will standard has not changed over the years, and that the nature of the relationship between employer and employee remains untouched. |
56. (p. 133) |
Which of the following is true regarding Clare’s statement that so long as she obeys the laws of the U.S., she does not need to be concerned about laws of other countries?
Despite numerous similarities among contract laws, international business persons must be aware of significant differences between U.S. and other national contract laws. There are also numerous significant differences between the employment law in the United States and employment law in other countries. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Evaluate Difficulty: 3 Hard Learning Objective: 06-07 How does contract law differ among states? Topic: Substantive Law  |
57. (p. 134) |
What concept is Clare referencing when she mentions employment-at-will?
The employment-at-will standard references the right of either the employer or the employee to terminate the employment relationship at any time. |
AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 06-08 How does employment law differ among states? Topic: Substantive Law  |
58. (p. 134) |
Is Clare correct that there has been no change in the concept of employment-at-will in this country and that the relationship between employer and employee has remained the same?
A change in the employment-at-will doctrine is that federal, state, and local government restrictions protect workers in the areas of minimum wages, unemployment and workers’ compensation, occupational health and safety, employment discrimination, and termination. |
AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Analyze Difficulty: 3 Hard Learning Objective: 06-08 How does employment law differ among states? Topic: Substantive Law  |
“Weeds.” Susie developed a product guaranteed to immediately kill weeds, but absolutely no other type of grass or shrub. She has encountered several individuals and businesses in other countries who would like to enter into contracts with her and market her products internationally. She went to Willie, who just graduated law school and has yet to pass the bar, and asks him for advice regarding those contracts. Willie proceeded to tell her that she should simply enter into the same type of contract with international businesses and individuals from other countries as she would if those individuals and businesses were located in the United States. He tells her that if there is any problem, then they will simply have to come to the United States to settle the matter, and that any issues would be determined in Susie’s home county, in her home state, and under her state’s law. He also mentions to her that she should consider contacting local foreign officials in the areas in which she would like her product sold and suggest to them that she can contribute heavily to election campaigns if she is allowed without any hassles to obtain necessary business licenses and approvals to do business. |
59. (p. 127) |
Which of the following is true regarding Willie’s advice that she contacts foreign officials regarding election campaign contributions?
The Foreign Corrupt Practices Act (FCPA) prohibits U.S. companies from offering or paying bribes to foreign government officials, political parties, and candidates for office for the purpose of obtaining or retaining business. |
AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Evaluate Difficulty: 2 Medium Learning Objective: 06-03 What ethical considerations impact business in the international marketplace? Topic: Ethical Considerations  |
60. (p. 142) |
Assuming Susie wants some additional protection to guarantee that any dispute with international business will be resolved in her state in the U.S., what should she do?
A forum selection agreement allows the parties to choose where disputes between them will be resolved. In the United States, such clauses are presumptively valid and will be disregarded only if they are unreasonable. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Analyze Difficulty: 3 Hard Learning Objective: 06-09 How are disputes settled in the international marketplace? Topic: Dispute Settlement in an International Context  |
61. (p. 142) |
Assuming Susie does not take Willie at his word and wants additional assurance that her state’s law would be applied, what should she do?
A choice-of-law clause lets the parties to a contract choose the law of a certain state to apply to the interpretation of the contract or in the event of a dispute. Choice-of-law clauses are generally enforceable as long as there is a reasonable relation between the transaction and the law of the selected jurisdiction. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Analyze Difficulty: 3 Hard Learning Objective: 06-09 How are disputes settled in the international marketplace? Topic: Dispute Settlement in an International Context  |
62. (p. 139) |
What was the result at the U.S. Supreme Court level in Goodyear Dunlop Tires Operations, S.A. v. Brown, involving whether a court in North Carolina could exercise jurisdiction over the defendant tire manufacturer and its subsidiaries who were based in Turkey and France? (The underlying lawsuit involved the deaths of North Carolina residents in France when a bus in which they were riding allegedly overturned due to problems with its tires.)
According to the Court, the defendants “attenuated connections” fell short of “the continuous and systematic general business contacts” required to empower a North Carolina court to entertain suit against them on claims unrelated to anything connecting them to the State. |
AACSB: Diversity Accessibility: Keyboard Navigation Blooms: Analyze Difficulty: 2 Medium Learning Objective: 06-09 How are disputes settled in the international marketplace? Topic: Dispute Settlement in an International Context  |
Essay Questions
63. (p. 125) |
As identified by Article 38 of the Statute of the International Court of Justice, what are four sources that may be used to find international law?
Article 38 of the Statute of the International Court of Justice, a part of the United Nations system, identifies four sources of international law as follows: Customs, international agreements, general principles of law recognized by legal systems throughout the world (such as equity and elementary considerations of humanity), and secondary sources (such as decisions of the international court of justice, resolutions of the U.N. General Assembly and scholarly writings). |
AACSB: Diversity Blooms: Analyze Difficulty: 3 Hard Learning Objective: 06-01 What is international law? Topic: International and Comparative Law  |
64. (p. 126-127) |
Identify and describe a franchise agreement, a joint venture, and an affiliate business in relation to international business.
A franchise agreement is a contract whereby a company grants permission to a foreign entity to utilize the franchisor’s name, trademark, or copyright in the operation of a business and associated sale of goods in a foreign state. A joint venture is an association between two or more parties wherein the parties share profits and management responsibilities with respect to a specific project. An affiliate is a business enterprise in one state that is directly or indirectly owned and controlled by a company located in another state. The affiliate is usually established in conformity with the laws of the foreign state and is subject to that state’s regulation. |
AACSB: Diversity Blooms: Analyze Difficulty: 3 Hard Learning Objective: 06-02 How is business transacted in the international marketplace? Topic: Doing Business Internationally  |
65. (p. 127) |
Richard is president of a pharmaceutical company which is based in the U.S. but has a substantial amount of sales in other countries. Richard’s company manufactures drugs prescribed to those infected with HIV and other illnesses. He is informed by some missionary workers that millions of people in Africa have HIV and that many have died. He is asked to provide medication to certain locations in Africa free of charge. On the other hand, Richard has also been asked by a group in the U.S. to provide medication free of charge to HIV positive individuals in this country and to donate other drugs his company makes for the treatment of other illnesses. Richard, in good faith and based on a good review of the company’s financial position, believes that the company can afford to donate some supplies but not in the quantities requested by both foreign and U.S. concerns. What do you believe is the ethical thing for Richard to do under the circumstances?
Student responses, of course, will vary. Students should analyze the difficulty of making decisions when resources are limited. |
AACSB: Ethics Blooms: Analyze Difficulty: 3 Hard Learning Objective: 06-03 What ethical considerations impact business in the international marketplace? Topic: Ethical Considerations  |
66. (p. 127-128) |
Define tariffs and how they may be calculated. Additionally, define a nontariff barrier and list and define three types of non-tariff barriers.
Tariffs are taxes levied on imported goods. Tariffs may be calculated as a percentage of the value of the imported good (ad valorem tariff), on the basis of the number or weight of the imported units or a flat per-unit charge (specific tariff), or as a combination of the two (compound tariff). A nontariff barrier is any impediment to trade other than tariffs. Examples of nontariff barriers include quotas, embargoes, and indirect barriers. Quotas are limits on imported goods, usually imposed for national economic reasons or for the protection of domestic industry. An embargo is a ban on trade with a particular state or on the sale of specific products, usually on the basis of foreign policy or national security. Indirect barriers are laws, practices, customs, and traditions that have the effect of limiting or discouraging the sale or purchase of imported goods. |
AACSB: Diversity Blooms: Understand Difficulty: 3 Hard Learning Objective: 06-04 What is the General Agreement on Tariffs and Trade; and what are its important provisions? Topic: The General Agreement on Tariffs and Trade  |
67. (p. 128) |
Discuss in detail the World Trade Organization including how it was established and its membership. Also discuss the normal trade relations principle, national treatment, quantitative restrictions, and dumping.
The Uruguay Round established the World Trade Organization. Membership presently consists of 157 states. The WTO facilitates international cooperation in opening markets and provides a forum for future trade negotiations and the settlement of international trade disputes. |
AACSB: Diversity Blooms: Analyze Difficulty: 3 Hard Learning Objective: 06-04 What is the General Agreement on Tariffs and Trade; and what are its important provisions? Topic: The General Agreement on Tariffs and Trade  |
Chapter 07
Crime and the Business Community
True / False Questions
1. | The primary purpose of criminal law is to compensate a victim.
True    False |
2. | Commission of the offense of grand larceny involves the theft of larger items as opposed to smaller items that can be hidden, for example, in a purse.
True    False |
3. | Under our criminal laws that exist today, white-collar crime is not punishable by imprisonment.
True    False |
4. | By broadening the scope of actions covered and the definition of a public official, Congress amended the Foreign Corrupt Practices Act to conform to the antibribery convention adopted by the Organization for Economic Cooperation and Development.
True    False |
5. | Mail fraud is a federal crime.
True    False |
6. | Embezzlement is distinguished from larceny because in embezzlement the individual does not take the property from another and is already in possession of the property.
True    False |
7. | China punishes embezzlement and bank fraud less severely than the U.S.
True    False |
8. | Under the common law, a corporation could not be considered a criminal because it was not an actual person and, thus, did not have a mind.
True    False |
9. | Under current law, corporations cannot be held criminally accountable for strict-liability offenses.
True    False |
10. | A person who is considered an infant under the law cannot be tried as an adult under any circumstances.
True    False |
11. | The test used to establish one’s mental state when insanity is claimed is the same regardless of the jurisdiction involved.
True    False |
12. | The majority of the U.S. Supreme Court Berghuis v. Thompkins ruled that absent an explicit invocation of the right to remain silent, police may continue to interrogate a suspect, and what the suspect says may be used against him in court.
True    False |
Multiple Choice Questions
13. | Which of the following is the term that describes wrongful behavior in a criminal action?
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14. | Which of the following is a term describing the wrongful state of mind needed for a criminal action?
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15. | Strict liability is a term used to describe which of the following?
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16. | Which of the following is an example of the imposition of strict liability?
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17. | Which of the following is punishable by imprisonment for more than one year or death?
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18. | Which of the following are less serious crimes punishable by fines or imprisonment of less than one year?
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19. | Which of the following are minor offenses usually punishable by a jail sentence of less than six months or a small fine with an example being violation of a building code?
|
20. | Which of the following is the forceful and unlawful taking of personal property?
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21. | Which of the following occurs when someone unlawfully enters a building with the intent to commit a felony?
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22. | Which of the following is the secretive and wrongful taking and carrying away of the personal property of another with the intent to permanently deprive the rightful owner of its use or possession?
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23. | Which of the following includes destruction of a building using an explosive device?
|
24. | Which of the following serves to combat bribery of foreign officials?
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25. | Which of the following is the making of threats for the purpose of obtaining money or property?
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26. | Which of the following is the making of an entry into the books of a bank or corporation that is designed to represent the existence of funds that do not exist?
|
27. | Which of the following is a false document or sign of existence used to perpetrate fraud, such as making counterfeit money?
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28. | Which of the following is the misappropriation of trust funds or money held in a fiduciary capacity?
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29. | Which of the following is an investment swindle in which high profits are promised from fictitious sources and early investors are paid off with funds raised from later investors?
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30. | Which of the following is using fraudulent means to obtain information about someone’s phone use?
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31. | Zack, the president of ABC Company, falsified documents to make it appear as if he had been granted stock options on certain dates, and he selected the dates after the fact, picking dates on which the stock price was low. Which of the following offenses, if any, did he commit?
|
32. | Ed goes door-to-door selling magazine subscriptions. Ed knows, however, that he is simply taking money for subscriptions and has absolutely no intention of ever arranging for the provision of magazines. Which of the following offenses, if any, has he committed?
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33. | Which of the following occurs when companies bill consumers for optional services that the consumers did not order?
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34. | In which of the following involves tricking consumers into changing their phone service to another carrier without their consent?
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35. | Bank teller Ben receives $1,000 from a customer for deposit into the customer’s bank account. Instead of placing the money into the customer’s account, Ben puts it into his pocket. Which of the following offenses has he committed?
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36. | Which of the following is a person who illegally accesses or enters another person’s or a company’s computer system to obtain information or to steal money?
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37. | Which of the following is true regarding corporate executives being held personally liable for business crime under the “responsible corporate officer” doctrine?
|
38. | Which of the following are considered infants under the law in regards to criminal activity?
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39. | Which of the following is generally a legitimate defense to a charge of a crime?
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40. | Which of the following allows a defendant to be found not guilty by reason of insanity if he or she did not understand the nature of the act?
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41. | Which of the following holds that a person may be deemed not guilty by reason of insanity, even if he or she knew that a criminal act was wrong, as long as the defendant was driven to commit the crime from some urge resulting from a mental deficiency the defendant could not resist?
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42. | Assuming the requisite elements are proven, which of the following is a defense when it is established that a crime is committed because the person committing the act was threatened with immediate bodily harm or loss of life unless the offense was committed?
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43. | A defendant can use the _____ defense if the idea for a crime originated not with the defendant but with a police officer or other government official who suggested it to the defendant, and the defendant would not otherwise have committed the crime.
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44. | A defendant who argues that commission of a crime was necessary to prevent a more severe crime from occurring is relying upon the defense of _______.
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45. | Which amendment provides the right to a speedy and public trial?
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46. | Which of the following is true regarding the Fourteenth Amendment?
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47. | Which of the following is true regarding the manner in which the exclusionary rule is derived from the U.S. Constitution?
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48. | At trial a defense lawyer states that evidence should not be admitted because it is “fruit of the poisonous tree.” Upon which of the following is the attorney relying?
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49. | Ordinarily, to obtain an arrest warrant, a law enforcement agent must demonstrate that there is ________ that a suspect committed or is planning to commit a crime.
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50. | Which of the following is true regarding an arrest without a warrant?
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51. | Of which of the following must a defendant be informed before questioning?
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52. | Which of the following occurs when a defendant makes a first appearance?
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53. | Which of the following is a plea in which the defendant does not admit guilt but agrees not to contest the charges?
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54. | A judge reports that a jury was “hung”. What does the judge mean?
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55. | Which of the following requires a “pattern”?
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56. | Under the Sarbanes-Oxley Act, it is now a felony to willfully fail to maintain proper records of audits and work papers for at least ______ years.
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57. | Which of the following was created specifically to combat white-collar crime?
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58. | Carla learns that her employer, a healthcare facility, is committing fraud against the government by filing false Medicare claims. Under which of the following might she obtain a portion of any recovery obtained by the government?
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59. | Which of the following was passed largely in response to business scandals of the early 2000’s, such as those implicated by Enron, WorldCom, Global Crossing, and Arthur Anderson?
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60. | Under the Sarbanes-Oxley Act, which of the following is true regarding the destruction of documents in a federal bankruptcy investigation?
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61. | What was the result in the case of U.S. v. Park, the case in which the defendant, the president of a national food-chain corporation, claimed he should not be held liable for allowing food in a warehouse to be exposed to rodent contamination because he had delegated responsibility to subordinates?
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62. | Which of the following Supreme Court cases established the right to counsel before questioning by the police?
|
“Cosmetic profits.” Sally is the vice president at Big Name Cosmetics Company. She learns that the company is soon going to purchase a smaller chain of stores. It is expected that stock in Big Name Cosmetics will rise dramatically at that point. Sally immediately buys a number of shares of her company’s stock. She also tells her friend Alice about the expected purchase of stores. Alice wanted to purchase stock in the company but lacked the funds with which to do so. Although she did not have the funds in Bank A, Alice decided to draw a check on Bank A and deposit the check in Bank B and then proceed to write a check on Bank B to cover the purchase of the stock. She hoped that she would have sufficient funds to deposit before the check was presented for payment. |
63. | Which offense is Sally guilty of, if any, in purchasing stock of her company?
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64. | Of which of the following, if any, is Sally guilty of by providing information to Alice regarding the purchase?
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65. | Of which of the following offenses, if any, is Alice guilty of by buying stock?
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66. | Of what offense, if any, is Alice guilty of by her method of payment?
|
“Divorce fallout.” Dr. Fred, following a messy divorce, has encountered significant financial difficulties. Dr. Fred has a friend named Slick Slim who tells Dr. Fred that he has been making lots of money by selling people a wristband that allegedly places pressure on a nerve that signals hunger resulting in a lack of appetite. Slick Slim tells Dr. Fred that, although the device does not really work, people who want to lose weight and look good in their bathing suits will do anything. Slick says the wristband sells like hotcakes. Slick also tells Dr. Fred that he will pay Dr. Fred five dollars for every band that Dr. Fred can sell to his patients. Dr. Fred proceeds to mail letters to patients suggesting the use of the band for weight loss. He also uses UPS to mail samples of the band to some patients along with letters encouraging purchase of the bands. Dr. Fred then proceeds to bill Medicare for office consultations he has with patients when they come in to purchase the bands. The scheme is wildly successful. Dr. Fred is able to entirely satisfy his alimony obligations within just a few months. Unfortunately, as patients begin to see that they are not having any weight loss, he has been receiving numerous complaints, and a friend of his told him that he could even be facing some criminal prosecution. |
67. | By mailing correspondence to patients encouraging purchase of the band, which of the following offenses, if any, did Dr. Fred commit?
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68. | Which of the following offenses, if any, did Dr. Fred commit when he used UPS to send correspondence and samples of the bands to patients?
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69. | By which of the following acts, if any, did Dr. Fred commit health care fraud?
|
“Green Gold.” Martin owned a factory in which he manufactured furniture. Martin had some extra space in the factory and decided to use heat lamps to grow marijuana. He smuggled the marijuana into the hands of dealers by hollowing out the furniture and placing the marijuana inside and by putting the marijuana in drawers, etc. Law enforcement became suspicious and unexpectedly burst into the building without a warrant, discovering the marijuana. Martin asked the agent in charge about the lack of a warrant. The agent told him that Fourth Amendment protections did not extend to businesses. Martin was charged with growing marijuana. Martin refused to testify at trial. At his trial, however, the judge excluded any evidence obtained from the search, and Martin was declared not guilty because there was no evidence against him. The agent was very angry and arrested Martin immediately for the same offense as he was walking down the courthouse steps from the first trial. The agent tells Martin that he should be tried again because the judge was incorrect. Martin is placed in a holding cell and immediately calls his attorney in an attempt to get out of jail free. |
70. | Which of the following is correct regarding Fourth Amendment protections for businesses and the necessity of a search warrant prior to a search of a business?
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71. | Upon which of the following defenses would Martin’s lawyer rely upon in regards to the second charge after Martin was found not guilty?
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72. | Upon which amendment did Martin rely in refusing to testify at trial?
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73. | Which of the following was the result in U.S. v. Ruiz, the case in the text involving the defending deputy superintendent of New Mexico’s insurance division who was convicted of offenses including mail fraud after he told insurers that they could avoid paying the fines for violation of licensing requirements if they contributed to certain charities?
|
Essay Questions
74. | List the elements necessary to establish bribery of a public official.
|
75. | Discuss the four alternative ways, in addition to fines, to punish white-collar criminals discussed in the text. Discuss the pros and cons of each.
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76. | Explain the type of conduct generally referenced by the term “criminal fraud” and list the three elements generally involved in establishing criminal fraud.
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77. | Penny, who is the president of XYZ Corporation, tells Andy that buying stock in XYZ Corporation right now is a good idea. Andy is only casually acquainted with Penny and did not know that she was an officer of the corporation. He, however, acting on her information investigated the company somewhat and proceeded to buy some stock. Both Penny and Andy were charged with insider trading. Both Penny and Andy say that they did not know that insider trading was against the law. Also, Andy says that he did not even know that Penny was an officer of XYZ Corporation and that he thought the information at issue was public information. Provide the legal definitions for the defenses asserted and discuss whether they are adequate.
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78. | List and discuss the three tests discussed in the text used for determining the viability of the insanity defense.
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79. | Set for the four activities referenced in the text that may constitute a violation of the Racketeer Influenced and Corrupt Organizations Act (RICO).
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Chapter 07 Crime and the Business Community Answer Key
True / False Questions
1. (p. 150) |
The primary purpose of criminal law is to compensate a victim.
FALSE The purpose of criminal law is to punish an offender for causing harm to public health, safety, or morals. |
AACSB: Reflective Thinking Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 07-01 What are the basic elements of a crime? Topic: Elements of a Crime  |
2. (p. 151) |
Commission of the offense of grand larceny involves the theft of larger items as opposed to smaller items that can be hidden, for example, in a purse.
FALSE Grand larceny involves items of greater value; thus, it is a felony and carries more severe penalties than does petty larceny. |
AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 07-02 What are some of the common crimes affecting businesses; and how do we prove them? Topic: Common Crimes Affecting Business  |
3. (p. 153) |
Under our criminal laws that exist today, white-collar crime is not punishable by imprisonment.
FALSE Fines are only one way those found guilty of white-collar crimes might be punished; there are at least four others including incarceration. |
AACSB: Ethics Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 07-03 When a crime is committed to benefit a corporation; who can be held liable? Topic: Common Crimes Affecting Business  |
4. (p. 153) |
By broadening the scope of actions covered and the definition of a public official, Congress amended the Foreign Corrupt Practices Act to conform to the antibribery convention adopted by the Organization for Economic Cooperation and Development.
TRUE To conform to the antibribery convention adopted by the Organization for Economic Cooperation and Development (OECD), Congress amended the FCPA by broadening the scope of actions covered and the definition of a public official. |
AACSB: Analytic Accessibility: Keyboard Navigation Blooms: Apply Difficulty: 3 Hard Learning Objective: 07-02 What are some of the common crimes affecting businesses; and how do we prove them? Topic: Common Crimes Affecting Business  |