Chap 6 Political And Trade Forces

Question 0

Terrorism

Answer 0

Unlawful acts of violence committed for a wide variety of reasons, including for ransom to overthrow a government, to gain release of imprisoned colleagues, to exact revenge for real or imagined wrongs and to punish nonbelievers of the terrorists’ religion

Question 1

Privatization

Answer 1

The transfer of public sector assets to private sector, the transfer of management of state activities through contracts and leases, and the contracting out of activities previously conducted by the state

Question 2

Stability

Answer 2

Characteristics of a government that maintains itself in power and whose fiscal, monetary, and political policies are predictable and not sudden, radical changes.

Question 3

Instability

Answer 3

Characteristics of a government that cannot maintain itself in power or that makes sudden unpredictable or radical policy changes

Question 4

Country risk assessment (CRA)

Answer 4

An evaluation, conducted by a bank or business, that assesses a country’s economic situation and policies and its politics to determine how much risk exists of losing an investment or not being paid

Question 5

Dumping

Answer 5

Selling a product abroad for less than the cost of production, the price in the home market, or the price to third countries

Question 6

Subsidies

Answer 6

Financial contributions, provided directly or indirectly by a government, which confer a benefit, including grants, preferential tax treatment, and government assumption of normal business expenses

Question 7

Countervailing duties

Answer 7

Additional import taxes levied on imports that have benefited from export subsidies

Question 8

Tariffs

Answer 8

Taxes on imported goods for the purpose of raising their price to reduce competition for local producers or stimulate local production

Question 9

Ad valorem duty

Answer 9

An import duty levied as a percentage of the invoice value of imported goods

Question 10

Specific duty

Answer 10

A fixed sum levied on a physical unit of an imported good

Question 11

Compound duty

Answer 11

A combination of specific and ad valorem duties

Question 12

Variable levy

Answer 12

An import duty set at the difference between world market prices and local government-supported prices.

Question 13

Nontariff Barrie’s (NTBs)

Answer 13

All forms of discrimination against imports other than import duties

Question 14

Quotas

Answer 14

Numerical limits placed on specific classes of imports

Question 15

Voluntary export restraints (VERs)

Answer 15

Export quotas imposed by the exporting nation

Question 16

Orderly marketing arrangements

Answer 16

Formal agreements between exporting and importing countries that stipulate the import or export quotas each nation will have for a good