C211 OA PREPARATION GUIDE QUESTIONS
AND ANSWERS GRADED A+ 2026
view that claims phenomenon of globalization was initially driven by the desire of
Western economies to exploit their power through MNE's ANSWER >> new
view that claims globalization is a long-run historical evolution since the dawn of
humanity. Says it is nothing new and that it will always exist ANSWER >> evolutionary
view that claims globalization is swinging from one extreme to another from time to time
ANSWER >> pendulum
investment in, controlling, and managing value-added activities in other countries
ANSWER >> foreign direct investment
political view hostile to FDI. believes it is an instrument of imperialism and vehicle for
exploitation of domestic resources by foreign capitalists and firms ANSWER >> radical
1
,suggests that FDI, unrestricted by government intervention, will enable countries to tap
into their absolute or comparative advantages by specializing in the production of
certain goods and services ANSWER >> free market
views FDI as having pros and cons and only approving FDI when its benefits outweigh
costs ANSWER >> pragmatic nationalis
what benefits exist to a country receiving FDI? ANSWER >> capital inflow, technology
spillovers, advanced management know-how, creates jobs
what costs exist to a country receiving FDI? ANSWER >> loss of sovereignty, adverse
effects on competition, net outflow in the capital account
The aggregation of importing and exporting that leads to the country-level trade surplus
or deficit. ANSWER >> balance of trade
firms with a _____ degree of resource similarity are likely to have similar competitive
actions ANSWER >> high
a high degree of resource similarity but low market commonality = _______ intensity of
rivalry ANSWER >> highest
little resource similarity but high market commonality = _____ intensity of rivalry
ANSWER >> lowest
mercantilism, absolute advantage and comparative advantage belong to what theory of
international trade ANSWER >> classical
theory of international trade that relies on more realistic product life cycles and first
mover advantages ANSWER >> modern
2
, under free trade, a nation gains by specializing in economic activities in which it has
_____advantage ANSWER >> absolute
focuses on the idea that if a country does not have absolute advantage, they can still
choose to specialize in the production of one good where it has ______ advantage
ANSWER >> comparative
comparative advantage and absolute advantage stem from ANSWER >> factor
endowments
theory that the wealth of the world is fixed and that a nation that imports more and
exports less will be richer ANSWER >> mercantilism
stage of the product life cycle where production of a new product that commands a price
premium will concentrate in the US ANSWER >> new
stage of the product life cycle where demand and ability to produce grow in other
developed nations ANSWER >> maturing
stage of the product life cycle where the previously new product is commoditized and
production will now move to low-cost developing nations ANSWER >> standardized
comparative advantage may change over time because patterns of ______ change over
time ANSWER >> trade
theory that suggests that intervention by governments in certain industries can enhance
their odds for international success ANSWER >> strategic trade
if a company seeks to limit foreign exchange rate exposure in the forward direction,
what is the most effective way to do this? ANSWER >> currency hedging
3
AND ANSWERS GRADED A+ 2026
view that claims phenomenon of globalization was initially driven by the desire of
Western economies to exploit their power through MNE's ANSWER >> new
view that claims globalization is a long-run historical evolution since the dawn of
humanity. Says it is nothing new and that it will always exist ANSWER >> evolutionary
view that claims globalization is swinging from one extreme to another from time to time
ANSWER >> pendulum
investment in, controlling, and managing value-added activities in other countries
ANSWER >> foreign direct investment
political view hostile to FDI. believes it is an instrument of imperialism and vehicle for
exploitation of domestic resources by foreign capitalists and firms ANSWER >> radical
1
,suggests that FDI, unrestricted by government intervention, will enable countries to tap
into their absolute or comparative advantages by specializing in the production of
certain goods and services ANSWER >> free market
views FDI as having pros and cons and only approving FDI when its benefits outweigh
costs ANSWER >> pragmatic nationalis
what benefits exist to a country receiving FDI? ANSWER >> capital inflow, technology
spillovers, advanced management know-how, creates jobs
what costs exist to a country receiving FDI? ANSWER >> loss of sovereignty, adverse
effects on competition, net outflow in the capital account
The aggregation of importing and exporting that leads to the country-level trade surplus
or deficit. ANSWER >> balance of trade
firms with a _____ degree of resource similarity are likely to have similar competitive
actions ANSWER >> high
a high degree of resource similarity but low market commonality = _______ intensity of
rivalry ANSWER >> highest
little resource similarity but high market commonality = _____ intensity of rivalry
ANSWER >> lowest
mercantilism, absolute advantage and comparative advantage belong to what theory of
international trade ANSWER >> classical
theory of international trade that relies on more realistic product life cycles and first
mover advantages ANSWER >> modern
2
, under free trade, a nation gains by specializing in economic activities in which it has
_____advantage ANSWER >> absolute
focuses on the idea that if a country does not have absolute advantage, they can still
choose to specialize in the production of one good where it has ______ advantage
ANSWER >> comparative
comparative advantage and absolute advantage stem from ANSWER >> factor
endowments
theory that the wealth of the world is fixed and that a nation that imports more and
exports less will be richer ANSWER >> mercantilism
stage of the product life cycle where production of a new product that commands a price
premium will concentrate in the US ANSWER >> new
stage of the product life cycle where demand and ability to produce grow in other
developed nations ANSWER >> maturing
stage of the product life cycle where the previously new product is commoditized and
production will now move to low-cost developing nations ANSWER >> standardized
comparative advantage may change over time because patterns of ______ change over
time ANSWER >> trade
theory that suggests that intervention by governments in certain industries can enhance
their odds for international success ANSWER >> strategic trade
if a company seeks to limit foreign exchange rate exposure in the forward direction,
what is the most effective way to do this? ANSWER >> currency hedging
3
