WGU C211 OA GLOBAL ECONOMICS EXAM () QUESTIONS AND VERIFIED ANSWERS, 100% [GRADED A+]
view that claims phenomenon of globalization was initially driven by the desire of Western economies to exploit their power through MNE's
✔️new
view that claims globalization is a long-run historical evolution since the dawn of humanity. Says it is nothing new and that it will always exist
✔️evolutionary
view that claims globalization is swinging from one extreme to another from time to time ✔️pendulum
investment in, controlling, and managing value-added activities in other countries ✔️foreign direct investment
political view hostile to FDI. believes it is an instrument of imperialism and vehicle for exploitation of domestic resources by foreign capitalists
and firms ✔️radical
suggests that FDI, unrestricted by government intervention, will enable countries to tap into their absolute or comparative advantages by
specializing in the production of certain goods and services ✔️free market
views FDI as having pros and cons and only approving FDI when its benefits outweigh costs ✔️pragmatic nationalis
what benefits exist to a country receiving FDI? ✔️capital inflow, technology spillovers, advanced management know-how, creates jobs
what costs exist to a country receiving FDI? ✔️loss of sovereignty, adverse effects on competition, net outflow in the capital account
The aggregation of importing and exporting that leads to the country-level trade surplus or deficit. ✔️balance of trade
firms with a _____ degree of resource similarity are likely to have similar competitive actions ✔️high
a high degree of resource similarity but low market commonality = _______ intensity of rivalry ✔️highest
little resource similarity but high market commonality = _____ intensity of rivalry ✔️lowest
mercantilism, absolute advantage and comparative advantage belong to what theory of international trade ✔️classical
theory of international trade that relies on more realistic product life cycles and first mover advantages ✔️modern
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
less confrontational, shorter, less specific form of law ✔️civil
common law is ______ flexible than civil law ✔️more
the legal right to use an economic resource and to derive income and benefits from it ✔️property right
legal rights awarded by government authorities to investors of new products or processes who are given monopoly rights to derive income
from inventions ✔️patent
exclusive legal rights of authors and publishers to publish and disseminate their work ✔️copyright
exclusive legal rights of firms to use specific names, brands and designs to differentiate their products ✔️trademark
characterized by the invisible hand of market forces where the government takes a hands off approach ✔️market
factors of production should be government owned or state owned and all supply, demand and pricing are planned by the government
✔️command
the economic system of most countries ✔️mixed economy
a curve that represents a consumers preferences ✔️indifference curve
________ indifference curves are preferred to ______ ones ✔️higher, lower
indifference curves are bowed ______ ✔️inward
the rate at which a consumer is willing to substitute one good for another ✔️marginal rate of substitution
the limit on consumption bundles that a consumer can afford ✔️budget constraint
a piece of analysis that shows the combination of goods the consumer can afford given their income and price of goods ✔️budget constraint
an increase in income will shift the budget constraint ________ ✔️outward
view that claims phenomenon of globalization was initially driven by the desire of Western economies to exploit their power through MNE's
✔️new
view that claims globalization is a long-run historical evolution since the dawn of humanity. Says it is nothing new and that it will always exist
✔️evolutionary
view that claims globalization is swinging from one extreme to another from time to time ✔️pendulum
investment in, controlling, and managing value-added activities in other countries ✔️foreign direct investment
political view hostile to FDI. believes it is an instrument of imperialism and vehicle for exploitation of domestic resources by foreign capitalists
and firms ✔️radical
suggests that FDI, unrestricted by government intervention, will enable countries to tap into their absolute or comparative advantages by
specializing in the production of certain goods and services ✔️free market
views FDI as having pros and cons and only approving FDI when its benefits outweigh costs ✔️pragmatic nationalis
what benefits exist to a country receiving FDI? ✔️capital inflow, technology spillovers, advanced management know-how, creates jobs
what costs exist to a country receiving FDI? ✔️loss of sovereignty, adverse effects on competition, net outflow in the capital account
The aggregation of importing and exporting that leads to the country-level trade surplus or deficit. ✔️balance of trade
firms with a _____ degree of resource similarity are likely to have similar competitive actions ✔️high
a high degree of resource similarity but low market commonality = _______ intensity of rivalry ✔️highest
little resource similarity but high market commonality = _____ intensity of rivalry ✔️lowest
mercantilism, absolute advantage and comparative advantage belong to what theory of international trade ✔️classical
theory of international trade that relies on more realistic product life cycles and first mover advantages ✔️modern
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
less confrontational, shorter, less specific form of law ✔️civil
common law is ______ flexible than civil law ✔️more
the legal right to use an economic resource and to derive income and benefits from it ✔️property right
legal rights awarded by government authorities to investors of new products or processes who are given monopoly rights to derive income
from inventions ✔️patent
exclusive legal rights of authors and publishers to publish and disseminate their work ✔️copyright
exclusive legal rights of firms to use specific names, brands and designs to differentiate their products ✔️trademark
characterized by the invisible hand of market forces where the government takes a hands off approach ✔️market
factors of production should be government owned or state owned and all supply, demand and pricing are planned by the government
✔️command
the economic system of most countries ✔️mixed economy
a curve that represents a consumers preferences ✔️indifference curve
________ indifference curves are preferred to ______ ones ✔️higher, lower
indifference curves are bowed ______ ✔️inward
the rate at which a consumer is willing to substitute one good for another ✔️marginal rate of substitution
the limit on consumption bundles that a consumer can afford ✔️budget constraint
a piece of analysis that shows the combination of goods the consumer can afford given their income and price of goods ✔️budget constraint
an increase in income will shift the budget constraint ________ ✔️outward
