WGU C211 OA Global Economics Exam () Questions
and Verified Answers, 100% Guarantee Pass
what costs exist to a country receiving FDI? - loss of sovereignty, adverse effects on
competition, net outflow in the capital account
The aggregation of importing and exporting that leads to the country-level trade surplus
or deficit. - balance of trade
firms with a _____ degree of resource similarity are likely to have similar competitive
actions - high
a high degree of resource similarity but low market commonality = _______ intensity of
rivalry - highest
little resource similarity but high market commonality = _____ intensity of rivalry - lowest
mercantilism, absolute advantage and comparative advantage belong to what theory of
international trade - classical
theory of international trade that relies on more realistic product life cycles and first
mover advantages - modern
under free trade, a nation gains by specializing in economic activities in which it has
_____advantage - absolute
focuses on the idea that if a country does not have absolute advantage, they can still
choose to specialize in the production of one good where it has ______ advantage -
comparative
comparative advantage and absolute advantage stem from - factor endowments
theory that the wealth of the world is fixed and that a nation that imports more and
exports less will be richer - mercantilism
stage of the product life cycle where production of a new product that commands a price
premium will concentrate in the US - new
stage of the product life cycle where demand and ability to produce grow in other
developed nations - maturing
view that claims phenomenon of globalization was initially driven by the desire of
Western economies to exploit their power through MNE's - new
,view that claims globalization is a long-run historical evolution since the dawn of
humanity. Says it is nothing new and that it will always exist - evolutionary
view that claims globalization is swinging from one extreme to another from time to time
- pendulum
investment in, controlling, and managing value-added activities in other countries -
foreign direct investment
political view hostile to FDI. believes it is an instrument of imperialism and vehicle for
exploitation of domestic resources by foreign capitalists and firms - radical
suggests that FDI, unrestricted by government intervention, will enable countries to tap
into their absolute or comparative advantages by specializing in the production of
certain goods and services - free market
views FDI as having pros and cons and only approving FDI when its benefits outweigh
costs - pragmatic nationalis
what benefits exist to a country receiving FDI? - capital inflow, technology spillovers,
advanced management know-how, creates jobs
stage of the product life cycle where the previously new product is commoditized and
production will now move to low-cost developing nations - standardized
comparative advantage may change over time because patterns of ______ change over
time - trade
theory that suggests that intervention by governments in certain industries can enhance
their odds for international success - strategic trade
if a company seeks to limit foreign exchange rate exposure in the forward direction,
what is the most effective way to do this? - currency hedging
exchange rate risk associating with the time delay between entering a contract and
settling it - transaction risk
forward transaction that protects traders and investors from exposure to fluctuations of
the spot rate - hedging
a means of spreading out activities in different currency zones in order to offset the
currency losses in certain regions through gains in other regions - strategic heding
amount of resources committed to entering a foreign market - scale of entry
, how do institutions reduce uncertainty? - by signaling which conduct is legit and which is
not
pillar of formal institution, coercive power of government - regulatory
pillar of informal institution, the mechanism through which norms influence individual
and firm behavior - normative
pillar of informal institution, taken for granted values and beliefs that guide behavior -
cognitive
institutions represented by laws, regulations and rules - formal
institutions represented by norms, culture and ethics - informal
the necessity of making rational decisions in the absence of complete information -
bounded rationality
bounded rationality is a position in which view of global business - institution
political system that affects global business with an individuals right to freedom of
expression and organization - democracy
political system that affects global business with hostility towards business, higher
political risk such as nationalism - totalitarianism
political system where citizens elect representatives to govern the country on their
behalf - democracy
political system where one person or party exercises absolute political control over the
population - totalitarianism
law that uses comprehensive statutes and codes as a primary means to form legal
judgements - civil
law that is shaped by precedents and traditions from previous judicial decisions -
common
law that is based on religious teachings - theocratic
less confrontational, shorter, less specific form of law - civil
common law is ______ flexible than civil law - more
the legal right to use an economic resource and to derive income and benefits from it -
property right
and Verified Answers, 100% Guarantee Pass
what costs exist to a country receiving FDI? - loss of sovereignty, adverse effects on
competition, net outflow in the capital account
The aggregation of importing and exporting that leads to the country-level trade surplus
or deficit. - balance of trade
firms with a _____ degree of resource similarity are likely to have similar competitive
actions - high
a high degree of resource similarity but low market commonality = _______ intensity of
rivalry - highest
little resource similarity but high market commonality = _____ intensity of rivalry - lowest
mercantilism, absolute advantage and comparative advantage belong to what theory of
international trade - classical
theory of international trade that relies on more realistic product life cycles and first
mover advantages - modern
under free trade, a nation gains by specializing in economic activities in which it has
_____advantage - absolute
focuses on the idea that if a country does not have absolute advantage, they can still
choose to specialize in the production of one good where it has ______ advantage -
comparative
comparative advantage and absolute advantage stem from - factor endowments
theory that the wealth of the world is fixed and that a nation that imports more and
exports less will be richer - mercantilism
stage of the product life cycle where production of a new product that commands a price
premium will concentrate in the US - new
stage of the product life cycle where demand and ability to produce grow in other
developed nations - maturing
view that claims phenomenon of globalization was initially driven by the desire of
Western economies to exploit their power through MNE's - new
,view that claims globalization is a long-run historical evolution since the dawn of
humanity. Says it is nothing new and that it will always exist - evolutionary
view that claims globalization is swinging from one extreme to another from time to time
- pendulum
investment in, controlling, and managing value-added activities in other countries -
foreign direct investment
political view hostile to FDI. believes it is an instrument of imperialism and vehicle for
exploitation of domestic resources by foreign capitalists and firms - radical
suggests that FDI, unrestricted by government intervention, will enable countries to tap
into their absolute or comparative advantages by specializing in the production of
certain goods and services - free market
views FDI as having pros and cons and only approving FDI when its benefits outweigh
costs - pragmatic nationalis
what benefits exist to a country receiving FDI? - capital inflow, technology spillovers,
advanced management know-how, creates jobs
stage of the product life cycle where the previously new product is commoditized and
production will now move to low-cost developing nations - standardized
comparative advantage may change over time because patterns of ______ change over
time - trade
theory that suggests that intervention by governments in certain industries can enhance
their odds for international success - strategic trade
if a company seeks to limit foreign exchange rate exposure in the forward direction,
what is the most effective way to do this? - currency hedging
exchange rate risk associating with the time delay between entering a contract and
settling it - transaction risk
forward transaction that protects traders and investors from exposure to fluctuations of
the spot rate - hedging
a means of spreading out activities in different currency zones in order to offset the
currency losses in certain regions through gains in other regions - strategic heding
amount of resources committed to entering a foreign market - scale of entry
, how do institutions reduce uncertainty? - by signaling which conduct is legit and which is
not
pillar of formal institution, coercive power of government - regulatory
pillar of informal institution, the mechanism through which norms influence individual
and firm behavior - normative
pillar of informal institution, taken for granted values and beliefs that guide behavior -
cognitive
institutions represented by laws, regulations and rules - formal
institutions represented by norms, culture and ethics - informal
the necessity of making rational decisions in the absence of complete information -
bounded rationality
bounded rationality is a position in which view of global business - institution
political system that affects global business with an individuals right to freedom of
expression and organization - democracy
political system that affects global business with hostility towards business, higher
political risk such as nationalism - totalitarianism
political system where citizens elect representatives to govern the country on their
behalf - democracy
political system where one person or party exercises absolute political control over the
population - totalitarianism
law that uses comprehensive statutes and codes as a primary means to form legal
judgements - civil
law that is shaped by precedents and traditions from previous judicial decisions -
common
law that is based on religious teachings - theocratic
less confrontational, shorter, less specific form of law - civil
common law is ______ flexible than civil law - more
the legal right to use an economic resource and to derive income and benefits from it -
property right
