WGU C211 Prep for OA

Globalization can be viewed as - answer-a new force sweeping through the world in recent times. a Option pendulum that swings from one extreme to another from time to time. a long-run historical evolution since the dawn of human history. What is the definition of an institution-based view of global business? - answer-An institution-based view suggests that the success and failure of firms are enabled and constrained by institutions, also known as the rules of the game, such as regulations, laws, cultures, ethics, and norms. From an institution-based view, a government's legal requirement for a business to pay taxes would be an example of: - answer-the influence of a formal institution. Which are the three views of globalization? - answer-A recent force, a long-running evolution, and a pendulum Trade deficit refers to: - answer-an economic condition in which a nation imports more than it exports. The modern trade theories include the following EXCEPT: - answer-Theory of comparative advantage The theory of mercantilism: - answer-views international trade as a zero-sum game. 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 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 An import quota is: - answer-Restriction on the quantity of imports that can be brought into a country. The three modern theories of international trade are: - answer-product life cycle, strategic trade, national competitive advantage of industries. Free trade is defined as: - answer-The idea that market forces should determine how much to trade with little or no government intervention. Multinational enterprises (MNEs) are: - answer-firms that engage in foreign direct investment (FDI). Foreign direct investment (FDI) is: - answer-investment in activities that control and manage value-added activities in foreign countries. An oligopoly is an: - answer-industry dominated by a small number of competitors. The primary political views on FDI are: - answer-Free market and pragmatic nationalism Some of the benefits of FDI to the host country are: - answer-Job creation Advanced technology Capital inflow In addition to FDI, other ways a firm can enter foreign markets include: - answer-License and trademark Outsource Import and export Which of the following statements about the effects of FDI on host countries is true? - answer-While FDI creates jobs and encourages the development of management know-how within the host country, it can also lead to adverse effects on competition and capital outflow. Beyond the enforcement of antitrust laws, collusion often fails because: - answer-it has incentive problems associated with the "prisoners' dilemma." Which of the following industry characteristic makes collusion difficult? - answer-Low entry barriers Which of the following situation represents the LOWEST intensity of rivalry between two companies? - answer-Low resource similarity and high market commonality How do firms create value when engaging rivals? - answer-Hold a dominant position in key markets. Launch products in multiple markets. Secure patents on key products. Political view most hostile to FDI - answer-Radical View Classical theories of international trade - answer-mercantilism absolute advantage comparative advantage Location specific refers to - answer-benefits a firm reaps from features specific to a place Competitive dynamics means - answer-actions or responses undertaken by competing firms Forward transaction is - answer-foreign transaction in which participants buy or sell currencies for future delivery The New Force is - answer-the theory that states the desire of Western economies to exploit other countries through multinational enterprises Resource base - answer-emphasizes economic gains due to unique, valuable and hard to duplicate of goods and services Balance of Trade is - answer-the aggregation of importing and exporting that leads to the country level trade surplus or deficit Strategic Trade theory - answer-states that government intervention can enhance an enterprise's odds for international success (in certain industries) International Monetary Fund - answer-promotes international monetary cooperation, exchange stability and orderly exchange arrangements Resource Similarity - answer-the extent to which a competitor possesses strategic endowment comparable to those of the focal firm What tools does the Federal Reserve have with regards to monetary control? - answer-Reserve requirement ratio of market operations and discount rate What are open market operations? - answer-buying and selling of government securities When the Fed buys bonds, what impact does this have on the money supply and aggregate demand? - answer-Increases money supply and aggregate demand increases When the Fed sells bonds, what impact does this have on the money supply and aggregate demand? - answer-Decreases money supply and aggregate demand decreases What is a discount rate? - answer-the minimum interest rate set by Federal Reserve for lending to other banks When the Fed reduces the discount rate, what impact will this have on the money supply and the aggregate demand? - answer-increase in money supply When the Fed increases the discount rate, what impact will this have on the money supply and the aggregate demand? - answer-decrease money supply What is a reserve ratio? - answer-what the banks are required to keep What would the Fed need to do with the reserve ratio in order to increase the money supply and aggregate demand in the economy? - answer-need to decrease the required ratio so banks have more to loan out, aggregate moves to the right. What would the Fed need to do with the reserve ratio in order to decrease the money supply and aggregate demand in the economy? - answer-need to increase the required ratio so banks would have less to loan out, aggregate moves to the left. If the Fed uses monetary policy in a way that increases money supply, what effect will this have on interest rates and aggregate demand (consider them separately)? - answer-lowers interest rate and moves aggregate demand to the right If the government uses fiscal policy to increase government spending what impact will this have on interest rates and aggregate demand? - answer-increase interest rate and moves aggregate demand to the right If the government uses fiscal policy and cuts taxes, what effect will this have on interest rates and aggregate demand? - answer-interest rate could rise and aggregate demand to the right Explain the effect an income change might have on shifting the demand curve? - answer-Income change causes the demand curve to shift either to the right or to the left. RIGHT=On normal goods, it shifts the demand curve to the right. That is as income increases, demand for normal goods increase. LEFT=On inferior goods, it shifts the demand curve to the left. An increase in income, demand for inferior goods decrease. What is the difference between a normal good and an inferior good? Explain. - answer-Normal goods = when income increases you buy more Inferior goods = income decreases you buy less Explain how the price of related goods is related to changes in the demand curve? - answer-Price in related goods is related to changes in the demand curve because it