C211 WGU OA CORE EXAM MANUAL UPDATED
QUESTIONS AND ANSWERS GRADED A+
✔✔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
✔✔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
QUESTIONS AND ANSWERS GRADED A+
✔✔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
✔✔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
