Question : 111.When social unrest and disorder in a country causes drastic : 1299231

111.When social unrest and disorder in a country causes drastic changes in its business environment that adversely affect the profit and other goals of a business enterprise, the business enterprise is said to be facing a(n) _____ risk.  

A. political

B. demographic

C. ethical

D. technological

E. physiological

112.Which of the following factors in a country is most likely to cause a political risk for an international business?  

A. The presence of more than one ethnic nationality

B. Infrequent changes in government and government policy

C. Low inflation rate

D. Low level of government debt

E. High living standards

113.Lamboria Republic is facing a high rate of inflation, and the government debt in the country is also high. As a result, the country’s business environment is beginning to deteriorate, and the profits of the business enterprises are hurt. According to this information, Lamboria Republic is facing a(n) _____ risk.  

A. legal

B. ethical

C. demographic

D. ethnographic

E. economic

114.Which of the following statements is most likely to be true about the risks of doing business in a country? 

A. Political risk is low in countries that contain more than one ethnic nationality.

B. Economic risks are independent of political risk.

C. One visible indicator of economic risk is the level of business and government debt in the country.

D. One visible indicator of legal risk tends to be a country’s inflation rate.

E. Political risk tends to be low in those countries that have high inflation and falling living standards.

115.The government of Ugania had been extending huge amounts of loans to the business enterprises in the country. However, the borrowers failed to generate the profits necessary to repay their debts. As a result, national banks in Ugania had a lot of nonperforming assets on their books, and the Uganian currency was devalued. In this context, the business enterprises in Ugania are most likely to face a(n) _____ risk.  

A. ethical

B. economic

C. technological

D. legal

E. sociological

116.A(n) _____ risk can be defined as the likelihood that a trading partner will opportunistically break a contract or expropriate property rights.  

A. political

B. legal

C. economic

D. sociological

E. cultural

117.If a company from a highly developed nation hesitates to enter into a joint venture with a company from a developing nation due to inadequate protection of intellectual property rights, it is trying to avoid a(n) ____ risk.  

A. political

B. legal

C. ethical

D. economic

E. ethnographic

118.The risks of doing business are most likely to be the highest in a country that:  

A. has low inflation rates.

B. supports high living standards.

C. has only one ethnic nationality.

D. protects intellectual property.

E. faces frequent changes in government and government policy.

119.Generally, the costs and risks associated with doing business in a foreign country are typically lower in:  

A. less developed countries.

B. economically advanced countries.

C. totalitarian states.

D. countries with high inflation and falling living standards.

E. countries that lack intellectual property rights.

120.Which of the following is most likely to be true about the overall attractiveness of a country as a potential market or investment site for an international business?  

A. The potential long-run benefits of doing business in a foreign country are independent of the country’s future economic growth rates.

B. The costs and risks associated with doing business in a foreign country are highest in economically advanced democratic nations.

C. Economic growth tends to be higher in a centrally planned command economy system than in a free market system.

D. The risks associated with doing business are low in developing nations where the governments have huge debts.

E. The costs and risks associated with doing business in a foreign country tend to be greater in politically unstable nations.

121.The government of Nerumbia wants to open the country’s economy to international business, and increase its overall attractiveness as a potential market or investment site. Which of the following will facilitate this decision of the Nerumbian government?  

A. Shifting toward command economy or an economy where property rights are not enforced strictly

B. Investing in infrastructure and in the required supporting businesses

C. Frequently changing the government and the government policies

D. Maintaining a high inflation rate

E. Adopting a legal system which does not provide any protection for intellectual property rights