WGU C211 – Global Economics for Managers
Pre-Assessment & Retake Questions
(2025/2026 Latest Exam Prep) | Complete
Study Guide & Verified Q&A PDF
The resource-based view of global business differs from the institution-based view of
global business in that the resource-based view _____. - correct answerfocuses on the
internal strengths on the firm
Which of the following is true of globalization according to the "pendulum view"
perspective? - correct answerGlobalization is a not a one-directional phenomenon.
The _____ of globalization suggests that globalization is neither recent nor one-
directional. - correct answerpendulum view
Which of the following is true of semiglobalization? - correct answerIt is a type of
globalization that lies between total isolation and total globalization.
Globalization can be viewed as: - correct answerA new force sweeping through the
world in recent times.
A long-run historical evolution since the dawn of human history.
A pendulum that swings from one extreme to another from time to time.
Name the three views of globalization. - correct answerA recent force, a long-running
evolution, and a pendulum
The _____ theory viewed international trade as a zero-sum game. - correct
answermercantilism
The _____ principle advocated that governments should actively protect domestic
industries from imports and vigorously promote exports. - correct answerprotectionism
Which of the following is a modern trade theory? - correct answerNational competitive
advantage
The _____ theory is based on the assumption that the wealth of the world is fixed. -
correct answermercantilism
Import quotas are a type of _____. - correct answertariff barrier
,According to the theory of absolute advantage, under free trade, - correct answerEach
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)? - correct answerCultural
distance
Chile requires 50 units of resource to produce one ton of wine and 20 units of resource
to produce one ton of blueberries. France requires 30 units of resource to produce one
ton of wine and 40 units of resource to produce one ton of blueberries. Which of the
following is true? - correct answerFrance has a comparative advantage in wine.
Which of the following theories does NOT lead to the conclusion that unrestricted free
trade is in the best interests of all countries? - correct answerStrategic trade theory
Free trade is defined as: - correct answerThe idea that market forces should determine
how much to trade with little or no government intervention.
According to the theory of absolute advantage, under free trade, - correct answereach
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)? - correct answerCultural
distance
Protectionism is similar to mercantilism as they both advocated _____. - correct
answergovernment involvement in international trade
OLI advantages refer to a firm's quest for _____via FDI. - correct answerownership
advantages, location advantages, and internalization advantages
MNEs' possession and leveraging of certain valuable, rare, hard-to-imitate, and
organizationally embedded (VRIO) assets overseas in the context of FDI refer to _____.
- correct answerownership
Firms prefer FDI to licensing because FDI_____. - correct answerprovides the firm with
direct ownership to its foreign assets
Which of the following political perspectives maintains the view that FDI has both pros
and cons and can only be approved when its benefits outweigh costs? - correct
answerPragmatic nationalism
Which of the following is a benefit of FDI to home countries? - correct answerLearning
from operations
,Which of the following foreign exchange transactions provide protection to traders and
investors from being exposed to fluctuations of the spot rate? - correct answerForward
transactions
_____ is defined as the conversion of one currency into another at Time 1, with an
agreement to revert it back to the original currency at a specific Time 2 in the future. -
correct answerCurrency swap
Foreign exchange rates are influenced by: - correct answerInterest rates and money
supply.
Relative price differences and purchasing power parity.
Supply and demand of the currencies.
A savvy global business manger must understand the following concepts to be
considered literate about foreign exchange: - correct answerUnderstand the factors that
influence exchange rates
Understand the ways to hedge currency risks
Understand the foreign exchange market
Which of the following are the primary types of foreign exchange transactions made by
financial companies? - correct answerSwaps, spot transactions, forward transactions
A home appliance manufacturer located in The Netherlands decides to open two new
manufacturing plants, one in Poland and the other in Thailand. Its purpose is to offset
currency losses through: - correct answerstrategic hedging
Why do managers, at some of the largest global corporations, fail to engage in currency
hedging? - correct answerThey believe that the protection against fluctuations in
exchange rates is not worth the potentially high cost of currency hedging.
Risk analysis of any country must include an analysis of the country's: - correct
answercurrency risks
With regard to foreign market entry, the resource-based view argues that foreign firms
need to - correct answerdeploy overwhelming resources and capabilities to offset their
liability of foreignness.
Which of the following is a first-mover advantage? - correct answerAvoidance of clash
with a dominant firm at home
Which of the following is an equity mode of entry? - correct answerWholly owned
subsidiaries
Which of the following entry modes is a type of strategic alliance? - correct
answerLicensing
, Which of the following is a disadvantage of licensing and franchising? - correct
answerLittle control over marketing
Miami is an ideal city for both North American firms looking to expand their business to
Central and South America and for Latin American companies to expand their business
to North America. This is an example of a(n): - correct answerlocation-specific
advantage.
The following are examples of location-specific advantages: - correct answerIndustry
demand that creates a skilled labor force.
Industry demand that facilitates a pool of specialized suppliers and buyers.
Knowledge spillovers among closely located firms.
Which of the following is a first-mover advantage? - correct answerAvoid clashing with
dominant firms in their home market.
Which of type of entry mode is a wholly owned subsidiary? - correct answerEquity mode
What are the possible benefits of being a late mover? - correct answerOpportunity to
free ride on first-mover investments
First mover's difficulty to adapt to market changes
Resolution of technological and market uncertainty
Assume that a firm is looking to expand into a foreign market, but it needs an
opportunity that has low development costs and little risk. Its best choice would be: -
correct answera contractual agreement.
Assume that a major technology company is looking to expand into a foreign market but
it can't risk losing its core innovations by sharing them with anyone outside the
corporation. Its best choice would be: - correct answera wholly owned subsidiary.
The price leader's _____ is defined as sufficient resources possessed to deter and
combat defection. - correct answercapacity to punish
_____ is defined as the extent to which a given competitor possesses strategic
endowment comparable, in terms of both type and amount, to those of the focal firm. -
correct answerResource similarity
Which of the following sets of words describes the initial set of actions a firm uses to
gain competitive advantage and the other firm's response to it? - correct answerAttack,
counterattack
When firms indirectly coordinate actions by signaling their intentions, often in an attempt
to reduce output and maintain pricing above competitive levels, they are engaging in: -
correct answertacit collusion.
Pre-Assessment & Retake Questions
(2025/2026 Latest Exam Prep) | Complete
Study Guide & Verified Q&A PDF
The resource-based view of global business differs from the institution-based view of
global business in that the resource-based view _____. - correct answerfocuses on the
internal strengths on the firm
Which of the following is true of globalization according to the "pendulum view"
perspective? - correct answerGlobalization is a not a one-directional phenomenon.
The _____ of globalization suggests that globalization is neither recent nor one-
directional. - correct answerpendulum view
Which of the following is true of semiglobalization? - correct answerIt is a type of
globalization that lies between total isolation and total globalization.
Globalization can be viewed as: - correct answerA new force sweeping through the
world in recent times.
A long-run historical evolution since the dawn of human history.
A pendulum that swings from one extreme to another from time to time.
Name the three views of globalization. - correct answerA recent force, a long-running
evolution, and a pendulum
The _____ theory viewed international trade as a zero-sum game. - correct
answermercantilism
The _____ principle advocated that governments should actively protect domestic
industries from imports and vigorously promote exports. - correct answerprotectionism
Which of the following is a modern trade theory? - correct answerNational competitive
advantage
The _____ theory is based on the assumption that the wealth of the world is fixed. -
correct answermercantilism
Import quotas are a type of _____. - correct answertariff barrier
,According to the theory of absolute advantage, under free trade, - correct answerEach
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)? - correct answerCultural
distance
Chile requires 50 units of resource to produce one ton of wine and 20 units of resource
to produce one ton of blueberries. France requires 30 units of resource to produce one
ton of wine and 40 units of resource to produce one ton of blueberries. Which of the
following is true? - correct answerFrance has a comparative advantage in wine.
Which of the following theories does NOT lead to the conclusion that unrestricted free
trade is in the best interests of all countries? - correct answerStrategic trade theory
Free trade is defined as: - correct answerThe idea that market forces should determine
how much to trade with little or no government intervention.
According to the theory of absolute advantage, under free trade, - correct answereach
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)? - correct answerCultural
distance
Protectionism is similar to mercantilism as they both advocated _____. - correct
answergovernment involvement in international trade
OLI advantages refer to a firm's quest for _____via FDI. - correct answerownership
advantages, location advantages, and internalization advantages
MNEs' possession and leveraging of certain valuable, rare, hard-to-imitate, and
organizationally embedded (VRIO) assets overseas in the context of FDI refer to _____.
- correct answerownership
Firms prefer FDI to licensing because FDI_____. - correct answerprovides the firm with
direct ownership to its foreign assets
Which of the following political perspectives maintains the view that FDI has both pros
and cons and can only be approved when its benefits outweigh costs? - correct
answerPragmatic nationalism
Which of the following is a benefit of FDI to home countries? - correct answerLearning
from operations
,Which of the following foreign exchange transactions provide protection to traders and
investors from being exposed to fluctuations of the spot rate? - correct answerForward
transactions
_____ is defined as the conversion of one currency into another at Time 1, with an
agreement to revert it back to the original currency at a specific Time 2 in the future. -
correct answerCurrency swap
Foreign exchange rates are influenced by: - correct answerInterest rates and money
supply.
Relative price differences and purchasing power parity.
Supply and demand of the currencies.
A savvy global business manger must understand the following concepts to be
considered literate about foreign exchange: - correct answerUnderstand the factors that
influence exchange rates
Understand the ways to hedge currency risks
Understand the foreign exchange market
Which of the following are the primary types of foreign exchange transactions made by
financial companies? - correct answerSwaps, spot transactions, forward transactions
A home appliance manufacturer located in The Netherlands decides to open two new
manufacturing plants, one in Poland and the other in Thailand. Its purpose is to offset
currency losses through: - correct answerstrategic hedging
Why do managers, at some of the largest global corporations, fail to engage in currency
hedging? - correct answerThey believe that the protection against fluctuations in
exchange rates is not worth the potentially high cost of currency hedging.
Risk analysis of any country must include an analysis of the country's: - correct
answercurrency risks
With regard to foreign market entry, the resource-based view argues that foreign firms
need to - correct answerdeploy overwhelming resources and capabilities to offset their
liability of foreignness.
Which of the following is a first-mover advantage? - correct answerAvoidance of clash
with a dominant firm at home
Which of the following is an equity mode of entry? - correct answerWholly owned
subsidiaries
Which of the following entry modes is a type of strategic alliance? - correct
answerLicensing
, Which of the following is a disadvantage of licensing and franchising? - correct
answerLittle control over marketing
Miami is an ideal city for both North American firms looking to expand their business to
Central and South America and for Latin American companies to expand their business
to North America. This is an example of a(n): - correct answerlocation-specific
advantage.
The following are examples of location-specific advantages: - correct answerIndustry
demand that creates a skilled labor force.
Industry demand that facilitates a pool of specialized suppliers and buyers.
Knowledge spillovers among closely located firms.
Which of the following is a first-mover advantage? - correct answerAvoid clashing with
dominant firms in their home market.
Which of type of entry mode is a wholly owned subsidiary? - correct answerEquity mode
What are the possible benefits of being a late mover? - correct answerOpportunity to
free ride on first-mover investments
First mover's difficulty to adapt to market changes
Resolution of technological and market uncertainty
Assume that a firm is looking to expand into a foreign market, but it needs an
opportunity that has low development costs and little risk. Its best choice would be: -
correct answera contractual agreement.
Assume that a major technology company is looking to expand into a foreign market but
it can't risk losing its core innovations by sharing them with anyone outside the
corporation. Its best choice would be: - correct answera wholly owned subsidiary.
The price leader's _____ is defined as sufficient resources possessed to deter and
combat defection. - correct answercapacity to punish
_____ is defined as the extent to which a given competitor possesses strategic
endowment comparable, in terms of both type and amount, to those of the focal firm. -
correct answerResource similarity
Which of the following sets of words describes the initial set of actions a firm uses to
gain competitive advantage and the other firm's response to it? - correct answerAttack,
counterattack
When firms indirectly coordinate actions by signaling their intentions, often in an attempt
to reduce output and maintain pricing above competitive levels, they are engaging in: -
correct answertacit collusion.
