WGU C211 GLOBAL ECONOMICS FOR
MANAGERS EXAM QUESTIONS AND
ANSWERS LATEST () (WITH
VERIFIED ANSWERS)
Views on Globalization - ANSWER-New, Evolutionary, and Pendulum
"New" view on globalization - ANSWER-A force sweeping through the world in recent times.
"Evolutionary" view on globalization - ANSWER-A 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
Foreign Direct Investment - ANSWER-Direct investment in, control, and management of value-added
activities in other countries
Political views on FDI - ANSWER-Radical View, Free Market View, Pragmatic Nationalism
Benefits to a country receiving FDI - ANSWER-Capital Inflow, Technology Spillover, Advanced
Management Know-How, Job creation
Costs to a country receiving FDI - ANSWER-Loss of Sovereignty, Adverse effects on competition,
Capital outflow.
How do resources and capabilities influence the competitive dynamics of a business? - ANSWER-
Resource similarity and market commonality can yield a powerful framework for competitor analysis.
Resource similarity - ANSWER-The extent to which a given competitor possesses strategic endowment
comparable, in terms of both type and amount, to those of the focal firm.
How does resource similarity impact competitive dynamics? - ANSWER-Firms with a high degree are
likely to have similar competitive actions. (Starbuck's instant coffee & McDonald's iced coffee)
Classical theories of international trade - ANSWER-Mercantilism, Absolute advantage, and
Comparative advantage
Modern theory view - ANSWER-Dynamic
Classical theory view - ANSWER-Static
Absolute advantage - ANSWER-The economic advantage one nation enjoys that is superior to other
nations
Comparative advantage - ANSWER-The advantage one economic activity nation enjoys in comparison
with other nations (relative, not absolute)
Mercantilism - ANSWER-A theory that suggests that the wealth of the world is fixed and that a nation
that exports more and imports less will be richer.
, Features of the product life cycle? - ANSWER-New, Maturing, and Standardized
Strategic trade - ANSWER-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-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.
Which theory came first? - ANSWER-Mercantilism (although both are of the idea that governments
should actively protect domestic industries from imports and 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? - ANSWER-Forward transactions, an act know as currency hedging.
Transaction risk - ANSWER-The exchange rate risk associated with the time delay between entering
into a contract and settling it.
Hedging - ANSWER-A transaction, such as forward transactions, that protects traders and investors
from exposure to the fluctuations of the spot rate.
Currency hedging - ANSWER-A way to protect traders and investors from being exposed to the
fluctuations of the spot rate
Strategic hedging - ANSWER-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 (currency diversification)
First mover advantages - ANSWER-Proprietary, technological leadership, pre-emption of scarce
resources, establishment of entry barriers to late entrants, avoidance of clash with dominant firms at
home, relationships with key stakeholders, (such as governments.)
Late mover advantages - ANSWER-Opportunity to free ride on first-mover investments, Resolution of
technological and market uncertainty, First mover's difficulty to adapt to market changes.)
Foreign market entries types - ANSWER-Non-equity and equity
Non-equity - ANSWER-Reflects relatively smaller commitments to overseas markets. Determines firms
MNE status.
Equity - ANSWER-indicative of relatively larger, harder-to-reverse commitments. Determines firms
MNE status.
How do institutions reduce uncertainty? - ANSWER-Establish "rules of the game" that economic
players play by. A standard to follow in order to survive and prosper. By signaling which conduct is
legitimate and which is not, institutions constrain the range of acceptable actions.
Regulatory pillar - ANSWER-The coercive power of governments (laws, regs, rules)
Normative pillar - ANSWER-Values, beliefs, and actions of other relevant players (norms, cultures,
ethics)
Cognitive pillar - ANSWER-The internalized, taken-for-granted values and beliefs that guide behavior.
(beliefs between right/wrong)
Formal institution - ANSWER-One that include laws, regulations and rules
MANAGERS EXAM QUESTIONS AND
ANSWERS LATEST () (WITH
VERIFIED ANSWERS)
Views on Globalization - ANSWER-New, Evolutionary, and Pendulum
"New" view on globalization - ANSWER-A force sweeping through the world in recent times.
"Evolutionary" view on globalization - ANSWER-A 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
Foreign Direct Investment - ANSWER-Direct investment in, control, and management of value-added
activities in other countries
Political views on FDI - ANSWER-Radical View, Free Market View, Pragmatic Nationalism
Benefits to a country receiving FDI - ANSWER-Capital Inflow, Technology Spillover, Advanced
Management Know-How, Job creation
Costs to a country receiving FDI - ANSWER-Loss of Sovereignty, Adverse effects on competition,
Capital outflow.
How do resources and capabilities influence the competitive dynamics of a business? - ANSWER-
Resource similarity and market commonality can yield a powerful framework for competitor analysis.
Resource similarity - ANSWER-The extent to which a given competitor possesses strategic endowment
comparable, in terms of both type and amount, to those of the focal firm.
How does resource similarity impact competitive dynamics? - ANSWER-Firms with a high degree are
likely to have similar competitive actions. (Starbuck's instant coffee & McDonald's iced coffee)
Classical theories of international trade - ANSWER-Mercantilism, Absolute advantage, and
Comparative advantage
Modern theory view - ANSWER-Dynamic
Classical theory view - ANSWER-Static
Absolute advantage - ANSWER-The economic advantage one nation enjoys that is superior to other
nations
Comparative advantage - ANSWER-The advantage one economic activity nation enjoys in comparison
with other nations (relative, not absolute)
Mercantilism - ANSWER-A theory that suggests that the wealth of the world is fixed and that a nation
that exports more and imports less will be richer.
, Features of the product life cycle? - ANSWER-New, Maturing, and Standardized
Strategic trade - ANSWER-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-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.
Which theory came first? - ANSWER-Mercantilism (although both are of the idea that governments
should actively protect domestic industries from imports and 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? - ANSWER-Forward transactions, an act know as currency hedging.
Transaction risk - ANSWER-The exchange rate risk associated with the time delay between entering
into a contract and settling it.
Hedging - ANSWER-A transaction, such as forward transactions, that protects traders and investors
from exposure to the fluctuations of the spot rate.
Currency hedging - ANSWER-A way to protect traders and investors from being exposed to the
fluctuations of the spot rate
Strategic hedging - ANSWER-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 (currency diversification)
First mover advantages - ANSWER-Proprietary, technological leadership, pre-emption of scarce
resources, establishment of entry barriers to late entrants, avoidance of clash with dominant firms at
home, relationships with key stakeholders, (such as governments.)
Late mover advantages - ANSWER-Opportunity to free ride on first-mover investments, Resolution of
technological and market uncertainty, First mover's difficulty to adapt to market changes.)
Foreign market entries types - ANSWER-Non-equity and equity
Non-equity - ANSWER-Reflects relatively smaller commitments to overseas markets. Determines firms
MNE status.
Equity - ANSWER-indicative of relatively larger, harder-to-reverse commitments. Determines firms
MNE status.
How do institutions reduce uncertainty? - ANSWER-Establish "rules of the game" that economic
players play by. A standard to follow in order to survive and prosper. By signaling which conduct is
legitimate and which is not, institutions constrain the range of acceptable actions.
Regulatory pillar - ANSWER-The coercive power of governments (laws, regs, rules)
Normative pillar - ANSWER-Values, beliefs, and actions of other relevant players (norms, cultures,
ethics)
Cognitive pillar - ANSWER-The internalized, taken-for-granted values and beliefs that guide behavior.
(beliefs between right/wrong)
Formal institution - ANSWER-One that include laws, regulations and rules
