BUS 410 EXAM 1 QUESTIONS WITH VERIFIED SOLUTIONS LATEST UPDATE 2026

BUS 410 EXAM 1 QUESTIONS WITH VERIFIED SOLUTIONS LATEST UPDATE 2026 Chapter 1: Introduction to International Business - Answers What is international business? - Answers The cross-border movement of goods, services, people, money, and intellectual property. What risks are common in international business? - Answers Cultural, commercial, transport, currency, and regulatory compliance risks. What is commercial risk? - Answers The risk that one party fails to perform as promised in a transaction. What is transport risk? - Answers The possibility of loss, damage, or delay during shipping by air, land, or sea. What is foreign exchange risk? - Answers The risk from currency value fluctuations in international transactions. What are currency controls? - Answers Government restrictions on currency exchange or transfer. What is regulatory compliance risk? - Answers The challenge of meeting foreign legal and regulatory standards. What is direct exporting? - Answers The company manages its own exports and deals directly with foreign buyers. What is indirect exporting? - Answers Using intermediaries like export management or trading companies to handle exports. What is importing? - Answers The process of bringing foreign goods into a country's customs territory. What are tariffs, quotas, and embargoes? - Answers Tariffs are import taxes; quotas limit quantities; embargoes prohibit trade. What is intellectual property (IP)? - Answers Legal rights from intellectual activity such as inventions, designs, or artistic works. What is an IP licensing agreement? - Answers A contract granting another party rights to use intellectual property. What is IP infringement? - Answers Unauthorized use, copying, or distribution of another's intellectual property. What is international franchising? - Answers A business model licensing trademarks and know-how in exchange for royalties or fees. What is foreign direct investment (FDI)? - Answers Ownership or control of productive assets in a foreign business. What is a foreign branch? - Answers An extension of a company in another country, not a separate legal entity. What is a foreign subsidiary? - Answers A separate legal entity owned and controlled by a parent company abroad. What is a joint venture? - Answers A cooperative business arrangement between two or more firms for profit. What is a multinational corporation? - Answers A firm with significant operations and revenue in multiple countries. What are national language laws? - Answers Laws requiring contracts or advertising to be in the host country's language. Case: Gaskin v. Stumm Handel GmbH - Answers Language barrier doesn't invalidate a contract; parties are bound by what they sign. Case: Bernina Distributors v. Bernina Sewing Machine Co. - Answers Importer bore exchange rate risk; contract didn't allow currency cost pass-through. Case: Dayan v. McDonald's Corp. - Answers Franchisee breached quality standards; franchisor properly terminated agreement. Case: In re Union Carbide (Bhopal) - Answers Court dismissed case to India under forum non conveniens—local courts more appropriate. Chapter 2: International Law and Legal Systems - Answers What is international law? - Answers The body of rules governing relationships among nations and private international actors. What is public international law? - Answers Rules applying to conduct between nations and international organizations. What is private international law? - Answers Rules for resolving cross-border disputes between private parties. What are the sources of international law? - Answers Treaties, custom, and general principles of law. What is a treaty? - Answers A legally binding agreement between nations recognized under international law. What is pacta sunt servanda? - Answers The principle that treaties must be honored in good faith. What is the Vienna Convention on the Law of Treaties? - Answers The main treaty codifying international rules on treaties. What is a self-executing treaty? - Answers A treaty enforceable domestically without further legislation. What is a non-self-executing treaty? - Answers A treaty requiring legislative action before enforcement. What is customary international law? - Answers Commonly accepted norms followed by states out of legal obligation. Case: The Paquette Habana - Answers Fishing vessels exempt from capture; customary international law is part of U.S. law. What is international business law (IBL)? - Answers Laws regulating cross-border business activities and transactions. What is extraterritoriality? - Answers Applying a nation's laws beyond its borders. What are the five jurisdiction principles? - Answers Territoriality, nationality, protective, passive personality, and universal. Case: U.S. v. Campbell - Answers U.S. may prosecute acts abroad under the protective principle for fraud against the government. What is the International Court of Justice (ICJ)? - Answers The UN's main judicial organ for disputes between nations. What is the International Criminal Court (ICC)? - Answers An independent court prosecuting genocide and crimes against humanity. What is corporate social responsibility (CSR)? - Answers A business commitment to ethical and socially responsible conduct. What is the OECD? - Answers An intergovernmental group promoting responsible business and anti-corruption standards. What is the UN Global Compact? - Answers A voluntary initiative promoting human rights, labor, environment, and anti-corruption. What are the CERES Principles? - Answers Environmental responsibility standards for corporations post-Exxon Valdez. Case: Vedanta v. Lungowe - Answers UK parent company may owe duty of care for subsidiary's harm abroad. What is comparative law? - Answers The study of differences between national legal systems. What is civil law? - Answers System based on codified statutes, common in Europe and Latin America. What is common law? - Answers System based on judicial precedents, common in U.S., UK, and former colonies.