Chapter 6

Question 1

The powers exercised by a state in relation to other countries and the supreme powers exercised over its own members are both in reference to __________

Answer 1

Sovereignty

Question 2

What are some examples of specific powers of sovereign state?

Answer 2

1) Sets requirements for citizenship
2) Defines geographical boundaries
3) Controls trade and the movement of people and goods across its borders
4) Can enter into agreements with other nations
5) Selects political, economical, and social systems

Question 3

What are some examples of pacts when nations hesitantly relinquish their rights in order to coexist with other nations?

Answer 3

European Union
NAFTA
WTO

Question 4

What does the stability of government policies have the biggest effect on?

Answer 4

Codes
Rules
Laws

Question 5

What are the political causes of policy instability?

Answer 5

1) Forms of government
2) Changes in political parties
3) Nationalism
4) Targeted fear/animosity
5) Trade disputes

Question 6

____________ is the seizing of a company’s assets without payment.

Answer 6

Confiscation

Question 7

____________ is the seizing of a company’s assets with reimbursement.

Answer 7

Expropriation

Question 8

Investment is either __________ or ___________.

Which one is government owned and which is private ownership?

Answer 8

Nationalized
Privatized

Nationalized
Privatized

Question 9

___________ is a gradual transfer of foreign investments to national control and ownership.

Answer 9

Domestication

Question 10

List the six economic risks:

Answer 10

1) Exchange controls
2) Local content laws
3) Import restrictions
4) Tax controls
5) Price controls
6) Labor problems

Question 11

What are four political risks?

Answer 11

1) Political sanctions
2) Political and social activists and nongovernmental organizations
3) Violence, terrorism, and war
4) Cyberterrorism and cybercrime