The Foreign Corrupt Practices Act

question 97

Multiple Choice

The Foreign Corrupt Practices Act:

• A) prohibits U.S. firms from paying bribes to foreign officials.
• B) levies stiff penalties against people who pay bribes.
• C) applies to foreign firms or individuals who accept payments while in the U.S.
• D) was amended to allow small grease money payments if they are customary in that country.
• E) All of the above.

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Definitions:

Fixed Exchange Rates

A currency system where the value of a currency is set at a predetermined rate relative to other currencies, instead of fluctuating in the open market.

Exchange Controls

Restrictions that a government may impose over the quantity of foreign currency demand by its citizens and firms and over the rate of exchange as a way to limit the nation’s quantity of outpayments relative to its quantity of inpayments (in order to eliminate a payments deficit).

Flexible Exchange Rates

Foreign exchange system where the value of currencies is determined by supply and demand in the forex market, without direct government intervention.

Services Trade

The exchange of services between countries, including sectors such as finance, insurance, transport, and tourism.