WGU C211 GLOBAL ECONOMICS FOR MANAGERS
(OA) 100+ EXAM QUESTIONS AND ANSWERS
Views on Globalization Accurate Answer: New, Evolutionary, and Pendulum
"New" view on globalization Accurate Answer: A force sweeping through the world in recent
times.
"Evolutionary" view on globalization Accurate Answer: A long-run historical evolution since the
dawn of human history
"Pendulum" view on globalization Accurate Answer: One that swings from one extreme to
another from time to time
Foreign Direct Investment Accurate Answer: Direct investment in, control, and management of
value-added activities in other countries
Political views on FDI Accurate Answer: Radical View, Free Market View, Pragmatic Nationalism
Benefits to a country receiving FDI Accurate Answer: Capital Inflow, Technology Spillover,
Advanced Management Know-How, Job creation
Costs to a country receiving FDI Accurate Answer: Loss of Sovereignty, Adverse effects on
competition,
Capital outflow.
,How do resources and capabilities influence the competitive dynamics of a business?
Accurate Answer: Resource similarity and market commonality can yield a powerful framework
for competitor analysis.
Resource similarity Accurate Answer: The extent to which a given competitor possesses
strategic endowment comparable, in terms of both type and amount, to those of the focal firm.
How does resource similarity impact competitive dynamics? Accurate Answer: Firms with a high
degree are likely to have similar competitive actions. (Starbuck's instant coffee & McDonald's
iced coffee)
Classical theories of international trade Accurate Answer: Mercantilism, Absolute advantage,
and Comparative advantage
Modern theory view Accurate Answer: Dynamic
Classical theory view Accurate Answer: Static
Absolute advantage Accurate Answer: The economic advantage one nation enjoys that is
superior to other nations
Comparative advantage Accurate Answer: The advantage one economic activity nation enjoys in
comparison with other nations (relative, not absolute)
Mercantilism Accurate Answer: A theory that suggests that the wealth of the world is fixed and
that a nation that exports more and imports less will be richer.
, Features of the product life cycle? Accurate Answer: New, Maturing, and Standardized
Strategic trade Accurate Answer: Intervention by governments in certain industries can
enhance their odds for international success.
How are supply and demand related to the exchange rate of a country?
Accurate Answer: The price of a commodity, a country's currency, is fundamentally determined
by this. Strong demand leads to price hikes; oversupply results in price drops.
Which theory came first?
Accurate Answer: Mercantilism (although both are of the idea that governments should actively
protect domestic industries from imports and vigorously promote exports)
If a company seeks to limit foreign exchange rate exposure in the forward direction, what is the
most effective way to do this? Accurate Answer: Forward transactions, an act know as currency
hedging.
Transaction risk Accurate Answer: The exchange rate risk associated with the time delay
between entering into a contract and settling it.
Hedging Accurate Answer: A transaction, such as forward transactions, that protects traders
and investors from exposure to the fluctuations of the spot rate.
(OA) 100+ EXAM QUESTIONS AND ANSWERS
Views on Globalization Accurate Answer: New, Evolutionary, and Pendulum
"New" view on globalization Accurate Answer: A force sweeping through the world in recent
times.
"Evolutionary" view on globalization Accurate Answer: A long-run historical evolution since the
dawn of human history
"Pendulum" view on globalization Accurate Answer: One that swings from one extreme to
another from time to time
Foreign Direct Investment Accurate Answer: Direct investment in, control, and management of
value-added activities in other countries
Political views on FDI Accurate Answer: Radical View, Free Market View, Pragmatic Nationalism
Benefits to a country receiving FDI Accurate Answer: Capital Inflow, Technology Spillover,
Advanced Management Know-How, Job creation
Costs to a country receiving FDI Accurate Answer: Loss of Sovereignty, Adverse effects on
competition,
Capital outflow.
,How do resources and capabilities influence the competitive dynamics of a business?
Accurate Answer: Resource similarity and market commonality can yield a powerful framework
for competitor analysis.
Resource similarity Accurate Answer: The extent to which a given competitor possesses
strategic endowment comparable, in terms of both type and amount, to those of the focal firm.
How does resource similarity impact competitive dynamics? Accurate Answer: Firms with a high
degree are likely to have similar competitive actions. (Starbuck's instant coffee & McDonald's
iced coffee)
Classical theories of international trade Accurate Answer: Mercantilism, Absolute advantage,
and Comparative advantage
Modern theory view Accurate Answer: Dynamic
Classical theory view Accurate Answer: Static
Absolute advantage Accurate Answer: The economic advantage one nation enjoys that is
superior to other nations
Comparative advantage Accurate Answer: The advantage one economic activity nation enjoys in
comparison with other nations (relative, not absolute)
Mercantilism Accurate Answer: A theory that suggests that the wealth of the world is fixed and
that a nation that exports more and imports less will be richer.
, Features of the product life cycle? Accurate Answer: New, Maturing, and Standardized
Strategic trade Accurate Answer: Intervention by governments in certain industries can
enhance their odds for international success.
How are supply and demand related to the exchange rate of a country?
Accurate Answer: The price of a commodity, a country's currency, is fundamentally determined
by this. Strong demand leads to price hikes; oversupply results in price drops.
Which theory came first?
Accurate Answer: Mercantilism (although both are of the idea that governments should actively
protect domestic industries from imports and vigorously promote exports)
If a company seeks to limit foreign exchange rate exposure in the forward direction, what is the
most effective way to do this? Accurate Answer: Forward transactions, an act know as currency
hedging.
Transaction risk Accurate Answer: The exchange rate risk associated with the time delay
between entering into a contract and settling it.
Hedging Accurate Answer: A transaction, such as forward transactions, that protects traders
and investors from exposure to the fluctuations of the spot rate.
