Business Ethics

1 Identify the practice which is not a criticism of the World Trade Organization (WTO), the International Monetary Fund (IMF), the World Bank, and the G8 that are accused of helping only the rich and harming the poor:

A) These institutions demand that developing economies remove tariffs in their own economies while tolerating protectionist tariffs for industries in the developed economies.

B) Loss of tariffs within poor countries makes them vulnerable to the economic power of industrialized countries and international corporations.

C) In fiscal year 2001, the World Bank lent more than $17 billion to developing countries as part of an effort to reduce poverty in developing countries.

D) Continued subsidies within developed countries that protect domestic industries prevent poorer countries from doing business with wealthier populations.

2 Select the statement this is not an objection to insisting that diversity of values in cultures entails ethical relativism:

A) It is a mistake to conclude too quickly that because cultures are diverse, they necessarily hold diverse ethical values.

B) Given different circumstances, conduct that might be condemned or excused in one context might be excused or condemned in another. But, excusing unethical behavior is not the same as justifying it.

C) Even in cases where a local culture holds values different from one's own, a person's own integrity would require that one's personal values not be abandoned.

D) Attempts to justify or excuse otherwise unethical conduct by appeals to local values and customs that are advanced only to contribute to the bottom line are simply another instance where ethical responsibilities restrict self-interest. This fact alone is not a good reason to abandon ethics in the face of a disagreement of values.

E) All of the above.

F) None of the above.

3 Which of the following rights might clearly be the sole responsibility of government rather than of international business?

A) The right to minimal education.

B) The right to nondiscriminatory treatment.

C) The right to physical security.

D) The right to a fair trial.

E) Answers #1 and #4 are both .

F) Answers #3 and #4 are both .

4 Identify the ways in which the process of international economic integration has increasingly become more common and accelerated in the last decade or two:

A) International trade agreements such as the General Agreement on Tariffs (GATT) and the North American Free Trade Agreement (NAFTA) have been established.

B) The Euro was adopted beginning 2002 within the European Union, establishing a common currency.

C) International loans from the World Bank have supported major development projects throughout the world.

D) Monetary policies established by the IMF have made it increasingly easy for capital to flow between countries.

E) All of the above.

F) None of the above.

5 Select the reasoning that challenges support for the ethical case for free trade and international economic cooperation:

A) The pursuit of profit within social and economic arrangements which secure free and open competition will allocate resources to their most highly valued uses and distribute those resources in ways that will produce the greatest good for the greatest number of people.

B) International competition for labor, jobs, goods and services, natural resources, and capital will, over time, increase the overall well-being of everyone.

C) Economic integration is a major impediment to conflict: the more countries cooperate economically, the less likely they will want to go to war.

D) Even though newly employed workers in the poorer countries who are forced to take jobs that are at a subsistence level in sweatshop conditions are better off in these jobs than they would be without them, the choice to work under such conditions is little more than extortion and exploitation by business.

6 Choose the statement that does not provide a reasonable way for international businesses to treat their employees in foreign countries on a comparable level with their treatment of employees in their home countries:

A) Pay wages and benefits that are somewhere between those paid in the home country and the minimal wages that will get people to work in the host country.

B) Pay wages and benefits that are very similar in the home and host countries.

C) If it takes two people earning minimum wages to support a family of four just above the poverty level in the United States, a minimum wage in the host country would be similarly determined.

D) All of the above.

E) None of the above.

7 Choose the statements that do not support the idea that international businesses should rely on local firms and independent contractors to supply workers in host countries:

A) To benefit from less-costly local labor, business should hire workers directly and take full and direct responsibility for how they are treated.

B) Hiring individuals as contractors on a per-item basis avoids having to pay fair wages and benefits.

C) As independent contractors, these individuals are responsible for the terms and conditions of their own employment.

D) Local firms are better equipped to recruit competent workers who will be satisfied with minimum wages.

8 Here are some ethical reasons for regulating economic activity. Determine which ones are not likely to be judged a barrier to free trade:

A) Protecting the environment.

B) Protecting workers and consumers.

C) Protecting family farms.

D) Protecting domestic industries.

E) All of the above.

F) None of the above.

9 Which statement is not a policy included in Thomas Friedman's "Golden Straitjacket," the policies that a country should follow for itself if it "opts for prosperity"?

A) Getting rid of quotas and domestic monopolies.

B) Privatizing state-owned industries and utilities.

C) Opening industries, stock, and bond markets to direct foreign ownership and investment.

D) Restricting imports.

E) All of the above.

F) All of the above.

10 Identify the statement that challenges the criticism that global economic integration threatens deeply held noneconomic values:

A) The WTO, World Bank, and IMF are themselves undemocratic bureaucracies that threaten the political values and self-determination in poor countries.

B) Private multinational corporations are replacing legitimate governments as the true international decision makers.

C) The policies of the "Golden Straitjacket" are simply rational requirements for a nation that chooses prosperity over poverty. Financial and economic norms are analogous to scientific laws discovered by social scientists.

D) Global market capitalism fueled by multinational corporations seeks to expand worldwide markets for their products and creates a cultural homogenization which threatens local cultures and traditions.