WGU C211 OA Global Economics Exam Questions and Verified Answers 2024

Which political view of foreign direct investment (FDI) is most widely used by governments in the current international business environment? - Protectionism Which factors credit the degree of rivalry between a pair of competitors? 2 choices - Market Commonality Cost Structure Which factors credit how local firms in emerging economics will respond to multinational competitors? - Competitive assets and industry pressures to globalize During which stage of the product life cycle do sales and profits gradually increase before seeing more dramatic increases? - Growth Which factor determines the foreign exchange rate of any currency? - Supply and demand for the currency Which risk must corporation minimize if it is to effectively manage short-term currency fluctuations? - Transaction Risk Which policy does a country use to determine the exchange rate of their currency in relationship to another country's currency if they do not rely on market forces? - Fixed Rate Policy Which term refers to trading currencies and currency derivatives in order to earn profits and help make prices efficient? - Brokering Which type of advantage is gained by a company based on where it operates? - Location-Specific Who gains from erecting significant entry barriers for other entrants? - First Movers Which strategy for entering into a foreign market has the lowest degree of risk? - Licensing What is a non-equity mode involving some type of contractual agreement? - Licensing After the Lehman Brothers collapse, the federal Reserve stood ready to lend financial institutions funds. When the Federal reserve did this, it was acting in its role as a lender of last resort. Which type of group has this role? - Non Governmental Organization What is the comprehensive free-trade settlement among Canada, US, and Mexico, that address issues of protecting workers rights, the environment and reducing tariffs and non-tariff trade barriers? - NAFTA What is one of the core propositions underpinning an institution-based view of global business? - Managers and corporations make rational decisions within their formal and informal framework Which type of system allows businesses to be privately owned with a strong individualistic profit orientation? - Market economy Which legal system is based on a religious document and religious teachings? - Theocratic Law Which type of good has well-established property rights? - Private Goods Which activity disregards basic property rights? - Students play loud music in the open area between dorms What is one type of economy that uses the market system? - Mixed Economy Which kind of outcome was Adam Smith referring to when describing the invisible hand? - Market Outcomes What does the value of the marginal product of labor for a perfectly competitive, profit maximizing firm equal? - Wage What is the change in total cost equal to? - Marginal Cost multiplied by change in quantity Which condition must be satisfied for a competitive firm to shut down in a short run? - Total variable costs are greater than total revenue What will a competitive firm do in the short run if its average variable cost exceeds price? - It will shut down What is a characteristic of a monopoly demand curve? - It is the same as the market demand curve Which statement describes a monopoly's demand curve? - It is less elastic than a perfectly competitive firms demand curve What is the profit maximization condition for a monopoly? - Where marginal revenue equals marginal cost What is a characteristic of monopolistic competition? - Many firms sell differentiated products How does self-interest influence each prisoner's decision in the prisoner's dilemma? - Neither prisoner will confess Why is studying the prisoners dilemma applicable to business? - It demonstrates the value of mapping out potential strategy given actions of rivals What does an indifference curve illustrate? - The preferences of a consumer What happens to an individual's budget constraint if the budget decreases and prices remain the same? - The budget constraints line shifts parallel inward What happens to the nominal interest rate and the quantity of money if the Federal Reserve increase the reserve requirement? Chose 2 answers - The interest rate increases The quantity of money decreases What will happen to the equilibrium in the market for a good if demand and supply increase simultaneously? - Equilibrium quantity will always increase What concept measures how much the quantity supplied responds to change in price? - Price elasticity of supply Which elasticity of demand measures how the quantity demanded of one good responds to a change in price of another good? - Cross-price elasticity of demand