C 211 Global Economics for Managers WGU
Pre Assessment and Retake Sections if you
failed the OA.
The resource-based view of global business differs from the institution-based view of global
business in that the resource-based view _____. -answer focuses on the internal
strengths on the firm
Which of the following is true of globalization according to the "pendulum view" perspective? -
answer Globalization is a not a one-directional phenomenon.
The _____ of globalization suggests that globalization is neither recent nor one-directional. -
answer pendulum view
Which of the following is true of semiglobalization? -answer It is a type of
globalization that lies between total isolation and total globalization.
Globalization can be viewed as: -answer A new force sweeping through the world in
recent times.
A long-run historical evolution since the dawn of human history.
A pendulum that swings from one extreme to another from time to time.
Name the three views of globalization. -answer A recent force, a long-running
evolution, and a pendulum
,The _____ theory viewed international trade as a zero-sum game. -answer
mercantilism
The _____ principle advocated that governments should actively protect domestic industries
from imports and vigorously promote exports. -answer protectionism
Which of the following is a modern trade theory? -answer National competitive
advantage
The _____ theory is based on the assumption that the wealth of the world is fixed. -answer
mercantilism
Import quotas are a type of _____. -answer tariff barrier
According to the theory of absolute advantage, under free trade, -answer Each nation
gains by specializing in economic activities in which a nation has absolute advantage.
Which of the following is NOT a nontariff trade barrier (NTB)? -answer Cultural
distance
Chile requires 50 units of resource to produce one ton of wine and 20 units of resource to
produce one ton of blueberries. France requires 30 units of resource to produce one ton of wine
and 40 units of resource to produce one ton of blueberries. Which of the following is true? -
answer France has a comparative advantage in wine.
Which of the following theories does NOT lead to the conclusion that unrestricted free trade is
in the best interests of all countries? -answer Strategic trade theory
,Free trade is defined as: -answer The idea that market forces should determine how
much to trade with little or no government intervention.
According to the theory of absolute advantage, under free trade, -answer each nation
gains by specializing in economic activities in which a nation has absolute advantage.
Which of the following is NOT a nontariff trade barrier (NTB)? -answer Cultural
distance
Protectionism is similar to mercantilism as they both advocated _____. -answer
government involvement in international trade
OLI advantages refer to a firm's quest for _____via FDI. -answer ownership
advantages, location advantages, and internalization advantages
MNEs' possession and leveraging of certain valuable, rare, hard-to-imitate, and organizationally
embedded (VRIO) assets overseas in the context of FDI refer to _____. -answer
ownership
Firms prefer FDI to licensing because FDI_____. -answer provides the firm with direct
ownership to its foreign assets
Which of the following political perspectives maintains the view that FDI has both pros and cons
and can only be approved when its benefits outweigh costs? -answer Pragmatic
nationalism
Which of the following is a benefit of FDI to home countries? -answer Learning from
operations
, Which of the following foreign exchange transactions provide protection to traders and
investors from being exposed to fluctuations of the spot rate? -answer Forward
transactions
_____ is defined as the conversion of one currency into another at Time 1, with an agreement
to revert it back to the original currency at a specific Time 2 in the future. -answer
Currency swap
Foreign exchange rates are influenced by: -answer Interest rates and money supply.
Relative price differences and purchasing power parity.
Supply and demand of the currencies.
A savvy global business manger must understand the following concepts to be considered
literate about foreign exchange: -answer Understand the factors that influence
exchange rates
Understand the ways to hedge currency risks
Understand the foreign exchange market
Which of the following are the primary types of foreign exchange transactions made by financial
companies? -answer Swaps, spot transactions, forward transactions
A home appliance manufacturer located in The Netherlands decides to open two new
manufacturing plants, one in Poland and the other in Thailand. Its purpose is to offset currency
losses through: -answer strategic hedging
Why do managers, at some of the largest global corporations, fail to engage in currency
hedging? -answer They believe that the protection against fluctuations in exchange
rates is not worth the potentially high cost of currency hedging.
Pre Assessment and Retake Sections if you
failed the OA.
The resource-based view of global business differs from the institution-based view of global
business in that the resource-based view _____. -answer focuses on the internal
strengths on the firm
Which of the following is true of globalization according to the "pendulum view" perspective? -
answer Globalization is a not a one-directional phenomenon.
The _____ of globalization suggests that globalization is neither recent nor one-directional. -
answer pendulum view
Which of the following is true of semiglobalization? -answer It is a type of
globalization that lies between total isolation and total globalization.
Globalization can be viewed as: -answer A new force sweeping through the world in
recent times.
A long-run historical evolution since the dawn of human history.
A pendulum that swings from one extreme to another from time to time.
Name the three views of globalization. -answer A recent force, a long-running
evolution, and a pendulum
,The _____ theory viewed international trade as a zero-sum game. -answer
mercantilism
The _____ principle advocated that governments should actively protect domestic industries
from imports and vigorously promote exports. -answer protectionism
Which of the following is a modern trade theory? -answer National competitive
advantage
The _____ theory is based on the assumption that the wealth of the world is fixed. -answer
mercantilism
Import quotas are a type of _____. -answer tariff barrier
According to the theory of absolute advantage, under free trade, -answer Each nation
gains by specializing in economic activities in which a nation has absolute advantage.
Which of the following is NOT a nontariff trade barrier (NTB)? -answer Cultural
distance
Chile requires 50 units of resource to produce one ton of wine and 20 units of resource to
produce one ton of blueberries. France requires 30 units of resource to produce one ton of wine
and 40 units of resource to produce one ton of blueberries. Which of the following is true? -
answer France has a comparative advantage in wine.
Which of the following theories does NOT lead to the conclusion that unrestricted free trade is
in the best interests of all countries? -answer Strategic trade theory
,Free trade is defined as: -answer The idea that market forces should determine how
much to trade with little or no government intervention.
According to the theory of absolute advantage, under free trade, -answer each nation
gains by specializing in economic activities in which a nation has absolute advantage.
Which of the following is NOT a nontariff trade barrier (NTB)? -answer Cultural
distance
Protectionism is similar to mercantilism as they both advocated _____. -answer
government involvement in international trade
OLI advantages refer to a firm's quest for _____via FDI. -answer ownership
advantages, location advantages, and internalization advantages
MNEs' possession and leveraging of certain valuable, rare, hard-to-imitate, and organizationally
embedded (VRIO) assets overseas in the context of FDI refer to _____. -answer
ownership
Firms prefer FDI to licensing because FDI_____. -answer provides the firm with direct
ownership to its foreign assets
Which of the following political perspectives maintains the view that FDI has both pros and cons
and can only be approved when its benefits outweigh costs? -answer Pragmatic
nationalism
Which of the following is a benefit of FDI to home countries? -answer Learning from
operations
, Which of the following foreign exchange transactions provide protection to traders and
investors from being exposed to fluctuations of the spot rate? -answer Forward
transactions
_____ is defined as the conversion of one currency into another at Time 1, with an agreement
to revert it back to the original currency at a specific Time 2 in the future. -answer
Currency swap
Foreign exchange rates are influenced by: -answer Interest rates and money supply.
Relative price differences and purchasing power parity.
Supply and demand of the currencies.
A savvy global business manger must understand the following concepts to be considered
literate about foreign exchange: -answer Understand the factors that influence
exchange rates
Understand the ways to hedge currency risks
Understand the foreign exchange market
Which of the following are the primary types of foreign exchange transactions made by financial
companies? -answer Swaps, spot transactions, forward transactions
A home appliance manufacturer located in The Netherlands decides to open two new
manufacturing plants, one in Poland and the other in Thailand. Its purpose is to offset currency
losses through: -answer strategic hedging
Why do managers, at some of the largest global corporations, fail to engage in currency
hedging? -answer They believe that the protection against fluctuations in exchange
rates is not worth the potentially high cost of currency hedging.
