C211 Study Guide questions
C211 WGU: Global Economics for
Managers Study Guide Test Questions
and Answers/ 2024.
What is Foreign Direct Investment? - Answer: is direct investment in, control, and
management of value-added activities in other countries.
What different political views exist on FDI? - Answer: Radical, Free Market, and
Programmatic Nationalism
What benefits exist to a country receiving FDI? - Answer: Capital inflow,
Technology, management, job creation
1|Page
, C211 Study Guide questions
What costs exist to a country receiving FDI? - Answer: Loss of sovereignty, adverse
effects on competition, and capital outflow
How do resources and capabilities influence the competitive dynamics of a
business? - Answer: Value, rarity, imitability, and organization (VRIO)
Globalization new view - Answer: A new force sweeping through the world in
recent times
Evolutionary globalization view - Answer: long-run historical evolution since the
dawn of human history
"Pendulum" view on globalization - Answer: One that swings from one extreme to
another from time to time
What is resource similarity and how does this impact competitive dynamics? -
Answer: The degree to which two firms with similar resources are likely to have
competitive actions. ie: market commonality
Give a description of the classical theory of international trade. - Answer: The
major theories typically studied consist of mercantilism, absolute advantage, and
comparative advantage
2|Page
, C211 Study Guide questions
How would the modern theory compare to the classical theory? - Answer: the
major theories typically studied consist of product life cycle, strategic trade, and
national competitive advantage.
Absolute advantage - Answer: involves being more efficient than anyone else in
the production of any good or service
comparative advantage - Answer: is the relative (not absolute) advantage in one
absolute activity that one nation enjoys in comparison with other nations
Mercantilism - Answer: Classical trade theory that viewed international trade as a
zero-sum game
What are the critical features of the product life cycle? - Answer: An economic
theory that accounts for changes in the patterns of trade over time
How would you describe strategic trade? - Answer: A theory that suggests that
strategic intervention by governments in certain industries can enhance their odds
for international success
How are supply and demand related to the exchange rate of a country? - Answer:
Exchange rates rise and fall based on the underlying economic conditions that
prompt traders, investors and others to want more of a particular currency.
3|Page
C211 WGU: Global Economics for
Managers Study Guide Test Questions
and Answers/ 2024.
What is Foreign Direct Investment? - Answer: is direct investment in, control, and
management of value-added activities in other countries.
What different political views exist on FDI? - Answer: Radical, Free Market, and
Programmatic Nationalism
What benefits exist to a country receiving FDI? - Answer: Capital inflow,
Technology, management, job creation
1|Page
, C211 Study Guide questions
What costs exist to a country receiving FDI? - Answer: Loss of sovereignty, adverse
effects on competition, and capital outflow
How do resources and capabilities influence the competitive dynamics of a
business? - Answer: Value, rarity, imitability, and organization (VRIO)
Globalization new view - Answer: A new force sweeping through the world in
recent times
Evolutionary globalization view - Answer: long-run historical evolution since the
dawn of human history
"Pendulum" view on globalization - Answer: One that swings from one extreme to
another from time to time
What is resource similarity and how does this impact competitive dynamics? -
Answer: The degree to which two firms with similar resources are likely to have
competitive actions. ie: market commonality
Give a description of the classical theory of international trade. - Answer: The
major theories typically studied consist of mercantilism, absolute advantage, and
comparative advantage
2|Page
, C211 Study Guide questions
How would the modern theory compare to the classical theory? - Answer: the
major theories typically studied consist of product life cycle, strategic trade, and
national competitive advantage.
Absolute advantage - Answer: involves being more efficient than anyone else in
the production of any good or service
comparative advantage - Answer: is the relative (not absolute) advantage in one
absolute activity that one nation enjoys in comparison with other nations
Mercantilism - Answer: Classical trade theory that viewed international trade as a
zero-sum game
What are the critical features of the product life cycle? - Answer: An economic
theory that accounts for changes in the patterns of trade over time
How would you describe strategic trade? - Answer: A theory that suggests that
strategic intervention by governments in certain industries can enhance their odds
for international success
How are supply and demand related to the exchange rate of a country? - Answer:
Exchange rates rise and fall based on the underlying economic conditions that
prompt traders, investors and others to want more of a particular currency.
3|Page
