C 211 GLOBAL ECONOMICS FOR MANAGERS
WGU PRE ASSESSMENT AND RETAKE
SECTIONS FOR OA.
The resource-based view of global business differs from the institution-based view of
global business in that the resource-based view _____. ANSWER >> focuses on the
internal strengths on the firm
Which of the following is true of globalization according to the "pendulum view"
perspective? ANSWER >> Globalization is a not a one-directional phenomenon.
The _____ of globalization suggests that globalization is neither recent nor one-
directional. ANSWER >> pendulum view
Which of the following is true of semi-globalization? ANSWER >> It is a type of
globalization that lies between total isolation and total globalization.
Globalization can be viewed as: ANSWER >> A new force sweeping through the world
in recent times.
1
,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. ANSWER >> A recent force, a long-running
evolution, and a pendulum
The _____ theory viewed international trade as a zero-sum game. ANSWER >>
mercantilism
The _____ principle advocated that governments should actively protect domestic
industries from imports and vigorously promote exports. ANSWER >> protectionism
Which of the following is a modern trade theory? ANSWER >> National competitive
advantage
The _____ theory is based on the assumption that the wealth of the world is fixed.
ANSWER >> mercantilism
Import quotas are a type of _____. ANSWER >> tariff barrier
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
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? ANSWER >> France has a comparative advantage in wine.
2
,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
Free trade is defined as: ANSWER >> The 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, 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
Protectionism is similar to mercantilism as they both advocated _____. ANSWER >>
government involvement in international trade
OLI advantages refer to a firm's quest for _____via FDI. ANSWER >> ownership
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 _____.
ANSWER >> ownership
Firms prefer FDI to licensing because FDI_____. ANSWER >> provides 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? ANSWER >>
Pragmatic nationalism
Which of the following is a benefit of FDI to home countries? ANSWER >> Learning
from operations
3
, Which of the following foreign exchange transactions provide protection to traders and
investors from being exposed to fluctuations of the spot rate? ANSWER >> Forward
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.
ANSWER >> Currency swap
Foreign exchange rates are influenced by: ANSWER >> Interest 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: ANSWER >> Understand 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? ANSWER >> Swaps, 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: ANSWER >> strategic hedging
4
WGU PRE ASSESSMENT AND RETAKE
SECTIONS FOR OA.
The resource-based view of global business differs from the institution-based view of
global business in that the resource-based view _____. ANSWER >> focuses on the
internal strengths on the firm
Which of the following is true of globalization according to the "pendulum view"
perspective? ANSWER >> Globalization is a not a one-directional phenomenon.
The _____ of globalization suggests that globalization is neither recent nor one-
directional. ANSWER >> pendulum view
Which of the following is true of semi-globalization? ANSWER >> It is a type of
globalization that lies between total isolation and total globalization.
Globalization can be viewed as: ANSWER >> A new force sweeping through the world
in recent times.
1
,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. ANSWER >> A recent force, a long-running
evolution, and a pendulum
The _____ theory viewed international trade as a zero-sum game. ANSWER >>
mercantilism
The _____ principle advocated that governments should actively protect domestic
industries from imports and vigorously promote exports. ANSWER >> protectionism
Which of the following is a modern trade theory? ANSWER >> National competitive
advantage
The _____ theory is based on the assumption that the wealth of the world is fixed.
ANSWER >> mercantilism
Import quotas are a type of _____. ANSWER >> tariff barrier
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
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? ANSWER >> France has a comparative advantage in wine.
2
,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
Free trade is defined as: ANSWER >> The 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, 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
Protectionism is similar to mercantilism as they both advocated _____. ANSWER >>
government involvement in international trade
OLI advantages refer to a firm's quest for _____via FDI. ANSWER >> ownership
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 _____.
ANSWER >> ownership
Firms prefer FDI to licensing because FDI_____. ANSWER >> provides 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? ANSWER >>
Pragmatic nationalism
Which of the following is a benefit of FDI to home countries? ANSWER >> Learning
from operations
3
, Which of the following foreign exchange transactions provide protection to traders and
investors from being exposed to fluctuations of the spot rate? ANSWER >> Forward
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.
ANSWER >> Currency swap
Foreign exchange rates are influenced by: ANSWER >> Interest 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: ANSWER >> Understand 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? ANSWER >> Swaps, 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: ANSWER >> strategic hedging
4
