WGU C211 - Global Economics for Managers Brain Dump questions with correct answers

What different political views exist on Foreign Direct Investment FDI? CORRECT ANSWER Radical View, Free Market View, Pragmatic Nationalism **answer includes radicalism** What is resource similarity and how does this impact competitive dynamics? CORRECT ANSWER Extent to which a given competitor possesses strategic endowment comparable, in terms of both type & amount to those of the focal firm. *Firms with a high degree are likely to have similar competitive actions. (Starbuck's instant coffee & McDonald's iced coffee) What are the critical features of the product life cycle? CORRECT ANSWER 1. New stage: prod. of a new product (ex. TV) that commands a price premium will concentrate in the USA, which exports to other developed nations. 2. Maturing stage: demand & ability to prod.; grow in other dev. nations (ex. Australia & Italy), it is now worthwhile to produce there. 3. Standardized stage: the prev. new prod. is standardized (or commoditized). Prod. will now move to low-cost dev. nations, which export to dev. nations. In other words, comparative advantage may change over time. How are supply and demand related to the exchange rate of a country? CORRECT ANSWER The price of a commodity, a country's currency, is fundamentally determined by this. Strong demand leads to price hikes; oversupply results in price drops. What advantages exist with first mover? CORRECT ANSWER 1. Proprietary, technological leadership 2. Pre-emption of scarce resources 3. Establishment of entry barriers for late entrants