WGU C211 OA Global Economics Exam
Questions and Ansẉers with
Expert-Verified Explanation 2026\2027
update
This Exam contains:
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Questions and Ansẉers
format set of multiple-choice
Expert-Verified Explanation
, Verified ẉith trusted textbooks
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─
1. Which two phrases represent the views of globalization? (Choose two
answers.)
A. A pendulum that swings from one extreme to another
B. A competition among key financial centers and markets
C. A continuing force sweeping through the world
D. An unplanned result of corporate responses to a variety of opportunities
E. A trading of goods and services between the most and least regulated
countries
Correct answer A and C
Expert-Explanation The three primary views on globalization are the "new" view,
the "evolutionary" view, and the "pendulum" view . The "new" view describes
globalization as a recent force sweeping through the world. The "evolutionary"
view sees globalization as a long-run historical evolution since the dawn of
human history. The "pendulum" view depicts globalization as swinging from
one extreme to another over time. Options A (pendulum view) and C (new view)
are correct. The other options are not standard descriptions of globalization
views in the C211 curriculum.
2. What are two trade barriers? (Choose two answers.)
A. Nontariffs
B. Foreign languages
C. The ocean
D. Tariffs
E. Shipping
Correct answer A and D
Expert-Explanation Trade barriers are government-induced restrictions on
international trade. The two major categories are tariffs (taxes on imports) and
non-tariff barriers (quotas, subsidies, regulations, and administrative hurdles).
,Options A (nontariffs) and D (tariffs) are correct . Foreign languages, oceans,
and shipping are logistical or communication challenges, not trade barriers
imposed by governments.
3. What is the effect of a tariff on a particular product for the country imposing
the tariff?
A. Increases domestic production of the product
B. Decreases the deadweight cost of the country
C. Increases domestic consumption of the product
D. Decreases government trade revenues
Correct answer A
Expert-Explanation A tariff is a tax on imported goods. It raises the domestic
price of the imported product, making domestic producers more competitive.
This leads to an increase in domestic production (quantity supplied by domestic
firms) and a decrease in domestic consumption because the higher price
reduces quantity demanded . Tariffs also increase government revenue (not
decrease) and create deadweight loss (not decrease). Option A is correct.
4. Which benefits come to the host country as a result of foreign direct
investment (FDI)? (Choose two answers.)
A. Sovereign stability
B. Capital inflow
C. Domestic resource allocation
D. Creation of domestic jobs
Correct answer B and D
Expert-Explanation Foreign direct investment (FDI) occurs when a firm invests
directly in facilities in a foreign country. Benefits to the host country (the
country receiving FDI) include capital inflow (investment funds), technology
spillover, advanced management know-how, and job creation . Capital outflow
(C) is a cost, not a benefit. Sovereign stability is not a direct benefit of FDI.
Options B and D are correct.
5. What is a cost of foreign direct investment (FDI) to a host country?
A. Increased competition
B. Technology transfer
C. Developing countries may be exploited by multinational enterprises (MNEs)
, D. Job creation
Correct answer C
Expert-Explanation Costs of FDI to the host country include loss of sovereignty,
adverse effects on competition (MNEs may drive out local firms), capital outflow
(repatriation of profits), and potential exploitation of developing countries by
multinational enterprises (MNEs) . Job creation, technology transfer, and
increased competition (when it stimulates local firms) are benefits, not costs.
6. Which theory states that patterns of international trade change across new,
maturing, and standardized stages?
A. Comparative advantage theory
B. Absolute advantage theory
C. Product life cycle theory
D. Mercantilism
Correct answer C
Expert-Explanation The product life cycle theory, developed by Raymond
Vernon, describes how patterns of international trade evolve as a product
moves through three stages: new, maturing, and standardized . In the new
stage, production is concentrated in the innovating country (usually developed).
In the maturing stage, production expands to other developed nations. In the
standardized stage, production shifts to low-cost developing countries.
Comparative advantage and absolute advantage are static theories.
Mercantilism focuses on accumulating wealth through trade surpluses.
7. What may precious, rare, and hard-to-duplicate resources and capabilities
lead to for a firm?
A. Sustained competitive advantage
B. Short-term profit
C. Market commonality
D. Resource similarity
Correct answer A
Expert-Explanation According to the resource-based view (RBV) and the VRIO
framework, resources that are valuable, rare, inimitable (hard-to-duplicate), and
supported by the organization lead to sustained competitive advantage .
Questions and Ansẉers with
Expert-Verified Explanation 2026\2027
update
This Exam contains:
Guarantee passing score
Questions and Ansẉers
format set of multiple-choice
Expert-Verified Explanation
, Verified ẉith trusted textbooks
───────────────────────────────────────────────────────
─
1. Which two phrases represent the views of globalization? (Choose two
answers.)
A. A pendulum that swings from one extreme to another
B. A competition among key financial centers and markets
C. A continuing force sweeping through the world
D. An unplanned result of corporate responses to a variety of opportunities
E. A trading of goods and services between the most and least regulated
countries
Correct answer A and C
Expert-Explanation The three primary views on globalization are the "new" view,
the "evolutionary" view, and the "pendulum" view . The "new" view describes
globalization as a recent force sweeping through the world. The "evolutionary"
view sees globalization as a long-run historical evolution since the dawn of
human history. The "pendulum" view depicts globalization as swinging from
one extreme to another over time. Options A (pendulum view) and C (new view)
are correct. The other options are not standard descriptions of globalization
views in the C211 curriculum.
2. What are two trade barriers? (Choose two answers.)
A. Nontariffs
B. Foreign languages
C. The ocean
D. Tariffs
E. Shipping
Correct answer A and D
Expert-Explanation Trade barriers are government-induced restrictions on
international trade. The two major categories are tariffs (taxes on imports) and
non-tariff barriers (quotas, subsidies, regulations, and administrative hurdles).
,Options A (nontariffs) and D (tariffs) are correct . Foreign languages, oceans,
and shipping are logistical or communication challenges, not trade barriers
imposed by governments.
3. What is the effect of a tariff on a particular product for the country imposing
the tariff?
A. Increases domestic production of the product
B. Decreases the deadweight cost of the country
C. Increases domestic consumption of the product
D. Decreases government trade revenues
Correct answer A
Expert-Explanation A tariff is a tax on imported goods. It raises the domestic
price of the imported product, making domestic producers more competitive.
This leads to an increase in domestic production (quantity supplied by domestic
firms) and a decrease in domestic consumption because the higher price
reduces quantity demanded . Tariffs also increase government revenue (not
decrease) and create deadweight loss (not decrease). Option A is correct.
4. Which benefits come to the host country as a result of foreign direct
investment (FDI)? (Choose two answers.)
A. Sovereign stability
B. Capital inflow
C. Domestic resource allocation
D. Creation of domestic jobs
Correct answer B and D
Expert-Explanation Foreign direct investment (FDI) occurs when a firm invests
directly in facilities in a foreign country. Benefits to the host country (the
country receiving FDI) include capital inflow (investment funds), technology
spillover, advanced management know-how, and job creation . Capital outflow
(C) is a cost, not a benefit. Sovereign stability is not a direct benefit of FDI.
Options B and D are correct.
5. What is a cost of foreign direct investment (FDI) to a host country?
A. Increased competition
B. Technology transfer
C. Developing countries may be exploited by multinational enterprises (MNEs)
, D. Job creation
Correct answer C
Expert-Explanation Costs of FDI to the host country include loss of sovereignty,
adverse effects on competition (MNEs may drive out local firms), capital outflow
(repatriation of profits), and potential exploitation of developing countries by
multinational enterprises (MNEs) . Job creation, technology transfer, and
increased competition (when it stimulates local firms) are benefits, not costs.
6. Which theory states that patterns of international trade change across new,
maturing, and standardized stages?
A. Comparative advantage theory
B. Absolute advantage theory
C. Product life cycle theory
D. Mercantilism
Correct answer C
Expert-Explanation The product life cycle theory, developed by Raymond
Vernon, describes how patterns of international trade evolve as a product
moves through three stages: new, maturing, and standardized . In the new
stage, production is concentrated in the innovating country (usually developed).
In the maturing stage, production expands to other developed nations. In the
standardized stage, production shifts to low-cost developing countries.
Comparative advantage and absolute advantage are static theories.
Mercantilism focuses on accumulating wealth through trade surpluses.
7. What may precious, rare, and hard-to-duplicate resources and capabilities
lead to for a firm?
A. Sustained competitive advantage
B. Short-term profit
C. Market commonality
D. Resource similarity
Correct answer A
Expert-Explanation According to the resource-based view (RBV) and the VRIO
framework, resources that are valuable, rare, inimitable (hard-to-duplicate), and
supported by the organization lead to sustained competitive advantage .
