The political and economic environment - Political/legal environment

7 important questions on The political and economic environment - Political/legal environment

What term is used to describe the takeover of foreign companies by the host government?

Nationalization

What term is used to describe trade laws that favor local firms and discriminate against foreign ones?

Trade barriers

What are used tools by governments to protect local companies from oust side competition. They are direct taxed and charge imposed on imports.

Tariffs
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What are the two main reasons why countries levy tariffs?

1. To protect domestic producers
2. To generate revenue

What are the reasons why governments impose import quotas?

1. To protect domestic producers by placing a limit on the amount of goods allowed to enter a country

2. To force the companies of other nations to compete against one another for the limited amount of imports allowed

Why do governments impose export quotas?

1. Desire to maintain adequate supplies of a product in the home market 

2. To restrict supply on world markets, thereby increasing the international price of a good

Political risks are addresses through the building of relationships with various stakeholders in a company. Which are the following:

Government
Customer
Employees
The local community 

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