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Module A International Institutions from a Business Perspective
Answer Key
True / False Questions
1.
As discussed in the module, institutions are organizations constructed to create jobs for
government employment initiatives.
2.
New institutional theory suggests that institutions be understood as collections of rules
and codes of conduct that limit behavior.
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3.
One of the significant differences between formal and informal institutions is how they
gain compliance.
4.
Informal cognitive institutions are not important to international managers because such
managers localize their hiring, so they can draw on local talent.
5.
International institutions provide nations the opportunity to build multilateral solutions,
and thus make significant contributions to international stability.
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6.
The United Nations operates with voluntary agreements, so is essentially an informal
institution.
7.
The UN Environment Programme laid the groundwork for the Climate Change Convention,
which led to the Kyoto Protocol.
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8.
Permanent members of the UN Security Council vote on Security Council measures and
only the Secretary-General of the UN, Ban Ki-moon, has veto power.
9.
The UN International Court of Justice (ICJ) hears cases that involve disputes between
national governments.
10.
By and large, the UN record of facilitating business transactions has been minor.
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11.
The Bretton Woods Conference established the European Union currency, the euro.
12.
The World Bank funds infrastructure projects in developed countries.
13.
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.
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14.
The World Bank is made up of one large institution, the International Bank for
Reconstruction and Development (IBRD).
15.
The International Finance Corporation (IFC) acts as an investment banker, arranging
private risk ventures in developing countries.
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16.
The WTO supports trade with discrimination as a basic right of trading nations.
17.
The Doha Development Agenda is an extended development plan for Doha, Qatar.
18.
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.
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19.
The WTO has negotiated a TRIPS agreement whereby property rights do not take
precedence over public health.
20.
Recently, regional trade agreements have grown, a trend that may be seen to strengthen
the WTO, according to the text.
21.
Economic cooperation often begins with a common market as in the case of the EU.
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22.
In a customs union, common external tariffs are added to an existing free trade area
(FTA), as found in the Southern African Customs Union and Mercosur.
23.
Among trading blocs, the EU has the largest GDP per capita.
24.
Trading blocs always bring cost savings to international firms.
25.
ASEAN, whose initial, political goal was to foster peaceful relations among members,
includes China as its core member.
26.
The EU is a supranational body that has become, essentially, a regional government.
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27.
The EU is administered by the European Commission, a group composed of 27
commissioners, elected at the EU level.
28.
The EU has been unsuccessful at harmonizing customs and tax formalities within their
borders.
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29.
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.
30.
All EU members use the euro, and thus have given up part of their national sovereignty to
the EU.
Multiple Choice Questions
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31.
IMF quotas are determined by the relative size of a nation in the global economy and
32.
The IMF initially played a central role in
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33.
The major function of the World Bank is to serve as
34.
The IBRD is a major institution of the World Bank whose function is to loan to
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35.
The WTO exists to
36.
Is the WTO's idea of "fair competition" really a code phrase for free trade?
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37.
The Doha Development Agenda is
38.
The WTO has made progress on trade-related intellectual property rights (TRIPS). An
example of this progress is
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Topic: Overview of Trade
39.
Regional trade agreements such as NAFTA impact the WTO
40.
In a free trade area, members drop internal tariffs. External tariffs
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41.
Economic integration often progresses
42.
Most African nations have their main trade relationships
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43.
ASEAN began as a defensive alliance of 10 Asian nations concerned about
44.
NAFTA maintains restrictions on the movement of labor, so it is
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45.
The EU began as a common market for
46.
The Treaty of Rome, signed in 1957, established a common market for coal and steel for
