Test Bank for Global Business 4th Edition by Mike Peng.

Test Bank for Global Business 4th Edition by Mike




Test Bank for Global Business 4th Edition by Mike
Peng

,Chapter 2 Understanding Formal Institutions Politics Laws and Economics

TRUEFALSE

1. Institutional framework pertains only to a firm's behavior.

(A) True

(B) False

Answer : (B)


2. An institutional framework is made up of formal and informal institutions governing individual and firm
behavior.

(A) True

(B) False

Answer : (A)


3. The laws of a country are part of the formal institution.

(A) True

(B) False

Answer : (A)


4. The regulatory pillar supports both informal and formal institutions.

(A) True

(B) False

Answer : (B)


5. The normative pillar supports informal institutions.

(A) True

(B) False

Answer : (A)

, 6. The values and beliefs of a culture are examples of a formal institution.



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(A) True

(B) False

Answer : (B)


7. Cognitive pillar is the coercive power of governments.

(A) True

(B) False

Answer : (B)


8. Force majeure is a method of interpreting a statute by understanding the legislative history leading up to the
adoption of that statute.

(A) True

(B) False

Answer : (B)


9. Disabling formal institutes does not affect transaction costs.

(A) True

(B) False

Answer : (B)


10. Opportunism is a source of transaction costs.

(A) True

(B) False

Answer : (A)


11. Transition economies have static institutions.