CBA 300 Mod A
Daily operations of the EU are conducted by the
European Commission.
Among trading blocs, the EU has the largest GDP per capita.
F
By and large, the UN record of facilitating business transactions has been minor.
F
Economic cooperation often begins with a common market as in the case of the EU.
F
Informal cognitive institutions are not important to international managers because such managers localize their hiring, so they can draw on local talent.
F
Recently, regional trade agreements have grown, a trend that may be seen to strengthen the WTO, according to the text.
F
The EU has been unsuccessful at harmonizing customs and tax formalities within their borders.
F
The WTO supports trade with discrimination as a basic right of trading nations.
F
The World Bank funds infrastructure projects in developed countries.
F
The World Bank is made up of one large institution, the International Bank for Reconstruction and Development (IBRD).
F
Trading blocs always bring cost savings to international firms.
F
Is the WTO's idea of "fair competition" really a code phrase for free trade?
Not really. Trade relationships among nations can be exceedingly complex, and the WTO supports fair competition, which may mean freer trade rather than free trade.
The United Nations is probably the best known among
international organizations.
Economic integration
involves a common market and a high degree of political integration.
Different institutions of the EU
represent different constituencies, such as the people of Europe and the member states.
The WTO is the only international organization designed to establish and help implement
rules of trade among nations.
This country has dramatically increased trade with Africa, especially in extraction sectors.
China
All member countries belong to the UN's
General Assembly.
The World Bank's two major institutions are the International Development Association and the
International Bank for Reconstruction and Development.
One of the significant differences between formal and informal institutions is how they gain compliance.
T
The Doha Development Agenda is
a WTO conference on trade.
An informal cognitive institution is
a collection of shared ideas that define reality, such as a collection of assumptions around a cultural pattern.
The United Nations is
a forum for the promotion of peace and global stability.
The major function of the World Bank is to serve as
a nonprofit banking cooperative for its members to meet development needs.
EU policies
affect global business, even if the EU is not directly involved.
The UN is a humanitarian organization and
also helpful in providing conditions that support business.
The WTO has made progress on trade-related intellectual property rights (TRIPS). An example of this progress is
an agreement that property rights should not take precedence over public health.
The Chinese concept of guanxi is an example of
an informal, cognitive institution.
In a free trade area, members drop internal tariffs. External tariffs
are maintained independently by each member.
IMF quotas are determined by the relative size of a nation in the global economy and
are the nation's "dues" to the IMF.
Any kind of economic integration agreement
brings reduced costs to members.
The UN Millennium Development goals drawn on
business models and business participation to accomplish their goals.
In a free trade area, members drop their tariffs with one another,
but each retains external tariffs.
Most African countries have their main trade relationships
developed countries, often their former colonial powers.
The first principle of the WTO's five basic principles is trade without
discrimination.
The purpose of the International Financial Corporation (IFC) is to invest in companies and financial institutions in developing countries to build
domestic capital markets.
WTO agreement on TRIPS had led to member agreement to
enforce 20-year patents and 50-year copyrights.
The WTO exists to
establish and help implement rules of trade among nations to increase trade flows.
Informal normative institutions
establish standards and propagate principles (UN, professional organizations).
At the end of World War II, the UN called for the conference that set up the World Bank and the IMF. This conference was
held in Bretton Woods.
Economic integration often progresses
in stages, from free trade area to customs union to common market.
The IBRD is a major institution of the World Bank whose function is to loan to
middle-income and creditworthy poor nations.
Regional trade agreements such as NAFTA impact the WTO
negatively, because they undercut the nondiscrimination principle of the WTO.
Informal institutions are of two types
normative and cognitive.
Under new institutional theory, institutions can be categorized as formal and informal, and the informal institutions can be further categorized as
normative and cognitive.
The IMF initially played a central role in
setting fixed exchange rates among nations' currencies with an established par value based on gold.
Informal institutions work on the principle of
shared norms and values
The EMU (the European Monetary Union or the Economic and Monetary Union) has established the euro, a currency that is used in
some of the EU member countries.
The EU's impact on international business is
substantial, since EU standards, especially in the areas of ecology and sustainability, impact any firm that wants to do business in the EU.
The common interest of all nations in a workable international exchange rate system transcends their conflicting international interests is the premise of
the International Monetary Fund/IMF.
The idea that WTO members treat all members equally is known as
the MFN/most favored nation principle.
The UN's International Court of Justice is also known as
the World Court.
The EU began as a common market for
the coal and steel industries.
In developing economies, informal institutions tend to play a greater role than in developed economies, possibly because
the developing economies have more ambiguity and lack formal institutions by definition, so informal institutions step into the breach.
Strictly speaking, the impact of the EU on the WTO could be said to be negative,
the favored trade relationships among EU members are not extended to nonmember countries, so the EU undercuts the WTO.
Informal institutions operate like
the mind's software.
IDA's purpose is to loan to
the poorest nations.
New institutional theory suggests that institutions provide
the rules of the game, so to speak.
Institutions are vitally important to international business decision makers because
they provide ways to settle conflicts.
NAFTA maintains restrictions on the movement of labor, so it is
within the scope of a free trade area.
NAFTA is an agreement among
Mexico, Canada, and the U.S.
Informal institutions are composed of sets of
voluntary agreements.
NAFTA has a carve-out for
Canadian eggs, sugar, poultry, and dairy.
Although India is a member of the WTO and has benefited greatly from increased trade as a result of WTO agreements, China is not yet a member.
F
Although the EU can influence the practices of businesses located in non-EU member countries, Microsoft has been able to maintain business in the EU much as it conducts business in the U.S.
F
As discussed in the module, institutions are organizations constructed to create jobs for government employment initiatives.
F
This type of institution operates through laws and regulations, with coercion as the regulative mechanism.
Formal
International institutions provide nations the opportunity to build multilateral solutions, and thus make significant contributions to international stability.
T
New institutional theory suggests that institutions be understood as collections of rules and codes of conduct that limit behavior.
T
Some think that renewed focus on exchange rates would be a good path forward for the IMF, which is struggling with core issues related to its purpose.
T
The EU is a supranational body that has become, essentially, a regional government.
T
The International Finance Corporation (IFC) acts as an investment banker, arranging private risk ventures in developing countries.
T
The UN International Court of Justice (ICJ) hears cases that involve disputes between national governments.
T
The United Nations operates with voluntary agreements, so is essentially an informal institution.
T
The WTO has negotiated a TRIPS agreement whereby property rights do not take precedence over public health.
T
Formal institutions gain compliance through
laws and regulations that operate with threat of force.
New institutional theory divides institutions into
two basic types: formal and informal.
The benefits of liberalized trade so far have been
uneven for developing and developed economies.
