GLOBAL BUSINESS FVC1 WGU ACTUAL QUESTIONS AND
CORRECT ANSWERS
Creation of isolationist policies Which negative outcome on political systems comes from globalization?
Reduced trade barriers Which factor results in a higher rate of globalization?
Culture, administration, geography, economy What are the four factors in Ghemawat's CAGE analysis?
Loss of manufacturing jobs What is a major drawback to the home country when companies outsource
manufacturing jobs to countries with lower worker wages?
The globalization process is at a disadvantage as the A country has a characteristic traditional economic system with poor
country has a lower standard of living. infrastructure and limited economic opportunity.
What is the impact of this system on the process of globalization?
Firms seek to maximize profits What is a characteristic of a market economy?
It forbids charging interest Which impact does Islamic law directly have on businesses?
International Monetary Fund Which institution helps to maintain availability of global financing to solve trade
deficit issues?
improving quality of life What is the current focus of the World Bank?
Inluence of free trade policies on labor rights For which concern has the World Trade Organization been criticized?
It is based on the value of the Five most significant How is the Special Drawing Right of the International Monetary Fund (IMF)
members' currencies. valued?
It leads to developing free trade policies with strategic Two countries agree to open their borders to international business
partners. transactions with one another without tariffs.
How does this affect global business?
It will create barriers to entry for other nations. A country uses its mature technology infrastructure to produce a good.
What is the impact of this infrastructure on trade?
The shift of jobs away from low comparative advantage What was the economic impact of the North American Free Trade Agreement
industries (NAFTA)?
Country B seeks to protect its economy and give it the A company that is located in Country A would like to sell products in Country B.
opportunity for long-term expansion. The government of Country B is pushing for a tariff-based international trade
agreement on the product.
What is the reasoning behind Country B's decision?
Increases Countries A and B participate in trade agreements that allow free trade among
participant countries. However, Country A imposed quotas on several imported
products to protect its domestic
products.
What is the effect, if any, on the domestic prices of these products?
, Jobs will increase in comparative advantage industries. Two countries decide to open up trade with each other.
What is likely to happen when trade opens up?
To protect an infant industry What is a purpose of a country implementing trade protectionism?
Provide Tax Exemptions Country A and Country B are trying to mend their relationship. A company from
Country A would like to invest in a company in Country B.
Which action by Country B will help these two countries meet their goal?
Unified trading policies with non-members Which level of regional economic integration is a key feature of a Customs
Union?
They create shifts in employment and resource What is a drawback of creating regional trade agreements?
allocation.
Almost half of all automobile parts must be made by a The United States-Mexico- Canada Agreement (USMCA), a modification of the
labor force that earns a minimum of $16 per hour by North American Free Trade Agreement (NAFTA), broadened the scope of free-
2023. trade between member nations
and tightened restrictions in the region.
Which regulation was established by this new agreement?
Central America Free Trade Agreement A U.S. capital investment firm is researching new markets to enter to diversify its
portfolio. The director of foreign investments presented a pitch to the board of
directors encouraging entry
into the Costa Rican telecommunications market by investing in local
companies in the region through acquisition.
Which alliance supports this director's suggestion?
The currency in Country A is strong relative to the A firm based in Country A manufactures its products in Country B and pays the
currency in Country B. manufacturing employees in the currency in which they are located.
Which currency situation will result in the maximum prot for the firm?
Increased exclusive internal trade Which drawback is associated with regional economic integration?
Control of natural resources Which factor contributes to the creation of a monopoly?
Contracts for the International Sale of Goods Which convention provides gap fillers for terms that may not be expressly
stated in agreements between two companies?
Anti-trust Which laws are violated by practices such as price-fixing, price discrimination,
restraints, and monopolization?
Decreased profitability An international company's consumers are demanding that the owners make
socially ethical business decisions concerning their packaging, but the
company is finding that the suggested green
modifications are increasing the costs of producing the product.
Which concern is this company facing by meeting these ethical demands?
Increase shareholder trust via high ethical standards A business is entering a global market at the same time it has been trying to
improve its level of corporate social responsibility (CSR).
Which CSR goal should this company remember during this process?
CORRECT ANSWERS
Creation of isolationist policies Which negative outcome on political systems comes from globalization?
Reduced trade barriers Which factor results in a higher rate of globalization?
Culture, administration, geography, economy What are the four factors in Ghemawat's CAGE analysis?
Loss of manufacturing jobs What is a major drawback to the home country when companies outsource
manufacturing jobs to countries with lower worker wages?
The globalization process is at a disadvantage as the A country has a characteristic traditional economic system with poor
country has a lower standard of living. infrastructure and limited economic opportunity.
What is the impact of this system on the process of globalization?
Firms seek to maximize profits What is a characteristic of a market economy?
It forbids charging interest Which impact does Islamic law directly have on businesses?
International Monetary Fund Which institution helps to maintain availability of global financing to solve trade
deficit issues?
improving quality of life What is the current focus of the World Bank?
Inluence of free trade policies on labor rights For which concern has the World Trade Organization been criticized?
It is based on the value of the Five most significant How is the Special Drawing Right of the International Monetary Fund (IMF)
members' currencies. valued?
It leads to developing free trade policies with strategic Two countries agree to open their borders to international business
partners. transactions with one another without tariffs.
How does this affect global business?
It will create barriers to entry for other nations. A country uses its mature technology infrastructure to produce a good.
What is the impact of this infrastructure on trade?
The shift of jobs away from low comparative advantage What was the economic impact of the North American Free Trade Agreement
industries (NAFTA)?
Country B seeks to protect its economy and give it the A company that is located in Country A would like to sell products in Country B.
opportunity for long-term expansion. The government of Country B is pushing for a tariff-based international trade
agreement on the product.
What is the reasoning behind Country B's decision?
Increases Countries A and B participate in trade agreements that allow free trade among
participant countries. However, Country A imposed quotas on several imported
products to protect its domestic
products.
What is the effect, if any, on the domestic prices of these products?
, Jobs will increase in comparative advantage industries. Two countries decide to open up trade with each other.
What is likely to happen when trade opens up?
To protect an infant industry What is a purpose of a country implementing trade protectionism?
Provide Tax Exemptions Country A and Country B are trying to mend their relationship. A company from
Country A would like to invest in a company in Country B.
Which action by Country B will help these two countries meet their goal?
Unified trading policies with non-members Which level of regional economic integration is a key feature of a Customs
Union?
They create shifts in employment and resource What is a drawback of creating regional trade agreements?
allocation.
Almost half of all automobile parts must be made by a The United States-Mexico- Canada Agreement (USMCA), a modification of the
labor force that earns a minimum of $16 per hour by North American Free Trade Agreement (NAFTA), broadened the scope of free-
2023. trade between member nations
and tightened restrictions in the region.
Which regulation was established by this new agreement?
Central America Free Trade Agreement A U.S. capital investment firm is researching new markets to enter to diversify its
portfolio. The director of foreign investments presented a pitch to the board of
directors encouraging entry
into the Costa Rican telecommunications market by investing in local
companies in the region through acquisition.
Which alliance supports this director's suggestion?
The currency in Country A is strong relative to the A firm based in Country A manufactures its products in Country B and pays the
currency in Country B. manufacturing employees in the currency in which they are located.
Which currency situation will result in the maximum prot for the firm?
Increased exclusive internal trade Which drawback is associated with regional economic integration?
Control of natural resources Which factor contributes to the creation of a monopoly?
Contracts for the International Sale of Goods Which convention provides gap fillers for terms that may not be expressly
stated in agreements between two companies?
Anti-trust Which laws are violated by practices such as price-fixing, price discrimination,
restraints, and monopolization?
Decreased profitability An international company's consumers are demanding that the owners make
socially ethical business decisions concerning their packaging, but the
company is finding that the suggested green
modifications are increasing the costs of producing the product.
Which concern is this company facing by meeting these ethical demands?
Increase shareholder trust via high ethical standards A business is entering a global market at the same time it has been trying to
improve its level of corporate social responsibility (CSR).
Which CSR goal should this company remember during this process?
