WGU C211 Study Guide |UPDATED!!!| 100% Correct Q&A

WGU C211 Study Guide |UPDATED!!!| 100% Correct Q&A What is Foreign Direct Investment? *Ans* is direct investment in, control, and management of value-added activities in other countries. What different political views exist on FDI? *Ans* Radical, Free Market, and Pragramatic Nationalism What benefits exist to a country receiving FDI? *Ans* Capital inflow, Technology, management, job creation What costs exist to a country receiving FDI? *Ans* Loss of sovereignty, adverse effects on competition, and capital outflow How do resources and capabilities influence the competitive dynamics of a business? *Ans* Value, rarity, imitibility, and organization (VRIO) Globalization new view *Ans* A new force sweeping through the world in recent times Evolutionary globalization view *Ans* long-run historical evolution since the dawn of human history "Pendulum" view on globalization *Ans* One that swings from one extreme to another from time to time What is resource similarity and how does this impact competitive dynamics? *Ans* 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. *Ans* The major theories typically studied consist of mercantilism, absolute advantage, and comparative advantage How would the modern theory compare to the classical theory? *Ans* the major theories typically studied consist of product life cycle, strategic trade, and national competitive advantage. Absolute advantage *Ans* involves being more efficient than anyone else in the production of any good or service comparative advantage *Ans* is the relative (not absolute) advantage in one absolute activity that one nation enjoys in comparison with other nations Mercantilism *Ans* Classical trade theory that viewed international trade as a zero-sum game What are the critical features of the product life cycle? *Ans* An economic theory that accounts for changes in the patterns of trade over time How would you describe strategic trade? *Ans* 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? *Ans* Exchange rates rise and fall based on the underlying economic conditions that prompt traders, investors and others to want more of a particular currency. Which theory came first, mercantilism or modern-day protectionism? *Ans* Mercantilism: As protectionism is the idea that governments should protect domestic industries from imports & vigorously promote exports If a company seeks to limit foreign exchange rate exposure in the forward direction, what is the most effective way to do this? *Ans* This can be accomplished by hedging Explain the concept of "hedging" as it relates to reducing various types of risk. *Ans* Strategies or Tools used =Hedgin