TJ_Comp 20_TB_Ch07

TJ_Comp 20_TB_Ch07 - Chapter 7THE LEGAL ENVIRONMENT OF...

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Chapter 7—THE LEGAL ENVIRONMENT OF INTERNATIONAL TRADE TRUE/FALSE 1. When an international sale is made, the parties often set forth in their contract which country's law will govern a dispute. ANS: T MSC: AACSB Analytic 2. Parties to international ventures often agree to arbitrate their disputes in neutral countries. ANS: T MSC: AACSB Analytic 3. Law is the result of the desire of the lawmaker to achieve certain goals. ANS: T MSC: AACSB Analytic 4. A letter of credit agrees to provide the seller with needed currency exchanges when transactions with foreign buyers occur. ANS: F MSC: AACSB Analytic 5. The U.S. dollar is considered the international currency. ANS: F MSC: AACSB Analytic 6. In the developing countries of the world, trade often focuses on providing for unplanned shortages or disposing of unplanned surpluses. ANS: F MSC: AACSB Analytic 7. Under GATT, the principle of trade without discrimination is embodied in the most favored nation clause. ANS: T MSC: AACSB Analytic 8. As a result of pressure from the United Nations Conference on Trade and Development (UNCTAD), the General Agreement on Tariffs and Trade (GATT) allowed the grant of special preferences to de- veloping countries as an exception to the GATT's basic rule of trade without discrimination. ANS: T MSC: AACSB Analytic 9. GATT is a multilateral treaty subscribed to by countries that account for four-fifths of world trade. ANS: T MSC: AACSB Analytic 10. Contracts for the International Sale of Goods (CISG) sets forth uniform rules to govern international sales contracts. ANS: T MSC: AACSB Analytic 11. The interests of the less-developed nations of the world are represented by the UNCTAD.
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ANS: T MSC: AACSB Analytic 12. The goal of the North American Free Trade Agreement (NAFTA) is to eliminate all tariffs between Mexico, Canada, and the United States. ANS: T MSC: AACSB Analytic 13. The World Bank uses Special Drawing Rights to facilitate the lending of money by capital surplus countries to countries needing economic help. ANS: F MSC: AACSB Analytic 14. The International Monetary Fund (IMF) was formed to shorten the duration and lessen the disequilibri- um in the international balance of payments of its members. ANS: T MSC: AACSB Analytic 15. The IMF administers a straightforward lending system between member and nonmember countries. ANS: T MSC: AACSB Analytic 16. A direct sale to customers abroad by an American firm, with terms of payment commonly based on an irrevocable letter of credit, is an import sale. ANS: F MSC: AACSB Analytic 17. The use of agency arrangements allows a U.S. firm to avoid taxation on sales made in its agent's coun- try. ANS: F MSC: AACSB Analytic 18. Franchising is a form of licensing that now is very common in international business. ANS: T
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This note was uploaded on 02/22/2012 for the course BUS BUS212 taught by Professor Manney during the Spring '12 term at FSU.

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TJ_Comp 20_TB_Ch07 - Chapter 7THE LEGAL ENVIRONMENT OF...

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