IB 300 Module A quiz

Which scenario demonstrates the concept of guanxi?

A Chinese businessman would not commit to a project with an American company until he established a relationship with the local representative.

The free trade area that was created in 1994 between Canada, Mexico and the United States is called

NAFTA

An informal cognitive institution is

a collection of shared ideas that define reality.

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.

The Eurasian Economic Union, consisting of Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan, is an example of a

common market.

The World Trade Organization is an example of an institution that "propagate(s) principles, and broadly represent(s) 'humanity.'" As such, the WTO is a (n)

normative institution.

The oldest customs union is

the Southern African Customs Union.

New institutional theory suggests that institutions provide

the rules of the game, reducing uncertainty.

Most African nations have their main trade relationships

with developed nations, often built on former colonial ties.