WGU C211 OA EXAM PREPARATION
QUESTIONS AND ANSWERS (2022/2023) (VERIFIED
ANSWERS)
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
QUESTIONS AND ANSWERS (2022/2023) (VERIFIED
ANSWERS)
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
