WGU C211
WGU C211 Exam Study Guide Questions
with Correct Answers UPDATED 2025
What is Foreign Direct Investment? -Correct Answer ✔is direct investment in, control,
and management of value-added activities in other countries.
What different political views exist on FDI? -Correct Answer ✔Radical, Free Market, and
Pragramatic Nationalism
What benefits exist to a country receiving FDI? -Correct Answer ✔Capital inflow,
Technology, management, job creation
What costs exist to a country receiving FDI? -Correct Answer ✔Loss of sovereignty,
adverse effects on competition, and capital outflow
How do resources and capabilities influence the competitive dynamics of a business? -
Correct Answer ✔Value, rarity, imitibility, and organization (VRIO)
Globalization new view -Correct Answer ✔A new force sweeping through the world in
recent times
Evolutionary globalization view -Correct Answer ✔long-run historical evolution since the
dawn of human history
"Pendulum" view on globalization -Correct Answer ✔One that swings from one extreme
to another from time to time
What is resource similarity and how does this impact competitive dynamics? -Correct
Answer ✔The degree to which two firms with similar resources are likely to have
competitive actions. ie: market commonality
Give a description of the classical theory of international trade. -Correct Answer ✔The
major theories typically studied consist of mercantilism, absolute advantage, and
comparative advantage
How would the modern theory compare to the classical theory? -Correct Answer ✔the
major theories typically studied consist of product life cycle, strategic trade, and national
competitive advantage.
Absolute advantage -Correct Answer ✔involves being more efficient than anyone else in
the production of any good or service
WGU C211
, WGU C211
comparative advantage -Correct Answer ✔is the relative (not absolute) advantage in
one absolute activity that one nation enjoys in comparison with other nations
Mercantilism -Correct Answer ✔Classical trade theory that viewed international trade as
a zero-sum game
What are the critical features of the product life cycle? -Correct Answer ✔An economic
theory that accounts for changes in the patterns of trade over time
How would you describe strategic trade? -Correct Answer ✔A theory that suggests that
strategic intervention by governments in certain industries can enhance their odds for
international success
How are supply and demand related to the exchange rate of a country? -Correct
Answer ✔Exchange rates rise and fall based on the underlying economic conditions that
prompt traders, investors and others to want more of a particular currency.
Which theory came first, mercantilism or modern-day protectionism? -Correct Answer
✔Mercantilism: As protectionism is the idea that governments should protect domestic
industries from imports & vigorously promote exports
If a company seeks to limit foreign exchange rate exposure in the forward direction,
what is the most effective way to do this? -Correct Answer ✔This can be accomplished
by hedging
Explain the concept of "hedging" as it relates to reducing various types of risk. -Correct
Answer ✔Strategies or Tools used =Hedging
Risk associated with =Transaction risks
They use hedging to minimize transaction risks
What is transaction risk? -Correct Answer ✔The Risk that a company will incur losses
due to an adverse change in the relevant foreign exchange rate
Strategic hedging -Correct Answer ✔spreading out actives in a number of different
currency zones to offset any currency losses in one region through gains in another
region.
currency hedging -Correct Answer ✔A transaction that protects traders and investors
from exposure to the fluctuations of the spot rate.
What advantages exist with first mover? -Correct Answer ✔1-They gain advantage
through proprietary technology
2-They make pre-emptive investments
3-They erect significant entry barriers for late entrants, such as high switching cost due
to locality
WGU C211
WGU C211 Exam Study Guide Questions
with Correct Answers UPDATED 2025
What is Foreign Direct Investment? -Correct Answer ✔is direct investment in, control,
and management of value-added activities in other countries.
What different political views exist on FDI? -Correct Answer ✔Radical, Free Market, and
Pragramatic Nationalism
What benefits exist to a country receiving FDI? -Correct Answer ✔Capital inflow,
Technology, management, job creation
What costs exist to a country receiving FDI? -Correct Answer ✔Loss of sovereignty,
adverse effects on competition, and capital outflow
How do resources and capabilities influence the competitive dynamics of a business? -
Correct Answer ✔Value, rarity, imitibility, and organization (VRIO)
Globalization new view -Correct Answer ✔A new force sweeping through the world in
recent times
Evolutionary globalization view -Correct Answer ✔long-run historical evolution since the
dawn of human history
"Pendulum" view on globalization -Correct Answer ✔One that swings from one extreme
to another from time to time
What is resource similarity and how does this impact competitive dynamics? -Correct
Answer ✔The degree to which two firms with similar resources are likely to have
competitive actions. ie: market commonality
Give a description of the classical theory of international trade. -Correct Answer ✔The
major theories typically studied consist of mercantilism, absolute advantage, and
comparative advantage
How would the modern theory compare to the classical theory? -Correct Answer ✔the
major theories typically studied consist of product life cycle, strategic trade, and national
competitive advantage.
Absolute advantage -Correct Answer ✔involves being more efficient than anyone else in
the production of any good or service
WGU C211
, WGU C211
comparative advantage -Correct Answer ✔is the relative (not absolute) advantage in
one absolute activity that one nation enjoys in comparison with other nations
Mercantilism -Correct Answer ✔Classical trade theory that viewed international trade as
a zero-sum game
What are the critical features of the product life cycle? -Correct Answer ✔An economic
theory that accounts for changes in the patterns of trade over time
How would you describe strategic trade? -Correct Answer ✔A theory that suggests that
strategic intervention by governments in certain industries can enhance their odds for
international success
How are supply and demand related to the exchange rate of a country? -Correct
Answer ✔Exchange rates rise and fall based on the underlying economic conditions that
prompt traders, investors and others to want more of a particular currency.
Which theory came first, mercantilism or modern-day protectionism? -Correct Answer
✔Mercantilism: As protectionism is the idea that governments should protect domestic
industries from imports & vigorously promote exports
If a company seeks to limit foreign exchange rate exposure in the forward direction,
what is the most effective way to do this? -Correct Answer ✔This can be accomplished
by hedging
Explain the concept of "hedging" as it relates to reducing various types of risk. -Correct
Answer ✔Strategies or Tools used =Hedging
Risk associated with =Transaction risks
They use hedging to minimize transaction risks
What is transaction risk? -Correct Answer ✔The Risk that a company will incur losses
due to an adverse change in the relevant foreign exchange rate
Strategic hedging -Correct Answer ✔spreading out actives in a number of different
currency zones to offset any currency losses in one region through gains in another
region.
currency hedging -Correct Answer ✔A transaction that protects traders and investors
from exposure to the fluctuations of the spot rate.
What advantages exist with first mover? -Correct Answer ✔1-They gain advantage
through proprietary technology
2-They make pre-emptive investments
3-They erect significant entry barriers for late entrants, such as high switching cost due
to locality
WGU C211
