CH 3

The Chinese concept of guanxi is an example of:

A. an informal, cognitive institution.

IDA's purpose is to loan to:

A. the poorest nations.

The Organization for Economic Cooperation and Development provides information on:

B. economic and other activities within its member-nations.

The OECD has encouraged members to:

B. eliminate bribery in all commercial transactions.

The WTO is the only international organization designed to establish and help implement:

B. rules of trade among nations.

The impact of the EU on the WTO could be said to be negative, since:

B. the favored trade relationships among EU members are not extended to nonmember countries, so the EU undercuts the WTO.

The Council of European Union, the primary policy-setting institution of the EU, is composed of:

B. the member-states' ministers who represent the specific area being discussed.

Which country does not belong to the OECD?

D. China

NAFTA maintains restrictions on the movement of labor, a limitation that suggests it is:

A. a free trade area.

That the common interest of all nations in a workable international exchange rate system transcends their conflicting international interests is the premise of:

A. the International Monetary Fund (IMF).

All UN member-countries belong to the UN's:

B. General Assembly.

The World Bank's two major institutions are the International Development Association and the:

B. International Bank for Reconstruction and Development (IBRD).

EU rulings:

B. affect all businesses within the EU and those that trade within the EU

Two good places to begin country-level research are the websites of the:

C. BIAC and CIA.

ASEAN began as a defensive alliance of 10 Asian nations concerned about:

C. the spread of communism in their region.

Most African nations have their main trade relationships:

C. with developed nations, often built on former colonial ties.

The following country is not a member of ASEAN:

D. China.

The main difference between a free trade area (FTA) and a customs union is that in a customs union, there is:

D. a common external tariff.

The Doha Development Agenda is:

D. an extended conference of the WTO initially convened in Doha.

The purpose of the International Financial Corporation (IFC) is to invest in companies and financial institutions in developing countries in order to build:

D. domestic capital markets.

The Treaty of Rome, signed in 1957, established a common market for coal and steel for:

A. West Germany, Belgium, the Netherlands, France, Luxembourg, and Italy.

The EU's impact on international business is:

C. substantial, since EU standards, especially in the areas of ecology and sustainability, impact any firm that wants to do business in the EU.

Is the WTO's idea of "fair competition" really a code phrase for free trade?

B. 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 UN is important to international business for many reasons, including that it:

A. develops standards and norms in technical areas.

The WTO exists to:

A. establish and help implement rules of trade among nations in order to increase trade flows.

Economic integration often progresses:

A. in stages, from free trade area to customs union to common market.

International institutions offer graduating international business majors:

A. interesting career development and internship opportunities.

The main purpose of the OECD is to:

A. provide economic research and a discussion forum.

"Trade without discrimination" in the WTO means that:

B. all trading partners must be treated the same.

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:

D. held at Bretton Woods, New Hampshire.

The WTO has made progress on trade-related intellectual property rights (TRIPS). An example of this progress is:

A. an agreement that property rights should not take precedence over public health.

Regional trade agreements such as NAFTA can be seen to impact the WTO:

A. negatively, because they undercut the nondiscrimination principle of the WTO.

The major function of the World Bank is to serve as a:

A. nonprofit banking cooperative for its members to meet development needs.

Under new institutional theory, institutions can be categorized as formal and informal, and the informal institutions can be further categorized as:

A. normative and cognitive.

This type of institution operates through laws and regulations, with coercion as the regulative mechanism:

A.formal

The OECD is called the "rich man's club" because its members:

B. are 34 of the world's wealthiest nations.

The geographical area that receives the most International Development Association (IDA) credits and grants is:

C. Africa.

In a free trade area, members drop internal tariffs. External tariffs:

C. are maintained independently by each member.

The first principle of the WTO's five basic principles is trade without:

C. discrimination.

The United Nations is probably the best known among:

C. international organizations.

International institutions are important to international business managers because, in general, they:

C. limit choices, thereby providing ways to settle disagreements and resolve conflicts.

ASEAN began as a:

C. security and military alliance among Southeast Asian nations.

The IBRD is a major institution of the World Bank whose function is to loan to:

D. middle-income and creditworthy poor nations.

The idea that WTO members treat all members equally is known as:

D. the MFN (most-favored-nation) principle.

The UN's International Court of Justice (ICJ) is also known as:

D. the World Court.

The EU began as a common market for:

D. the coal and steel industries.

The results of liberalized trade so far have been:

D. uneven for developing and developed economies.