WGU C211 - GLOBAL ECONOMICS FOR
MANAGERS EXAM QUESTION WITH WELL
RATIONALE
Views mon mGlobalization m- mANS-New, mEvolutionary, mand mPendulum
"New" mview mon mglobalization m- mANS-A mforce msweeping mthrough mthe mworld min
mrecent mtimes.
"Evolutionary" mview mon mglobalization m- mANS-A mlong-run mhistorical mevolution msince
mthe mdawn mof mhuman mhistory
"Pendulum" mview mon mglobalization m- mANS-One mthat mswings mfrom mone mextreme mto
manother mfrom mtime mto mtime
Foreign mDirect mInvestment m- mANS-Direct minvestment min, mcontrol, mand
mmanagement mof mvalue-added mactivities min mother mcountries
Political mviews mon mFDI m- mANS-Radical mView, mFree mMarket mView, mPragmatic
mNationalism
Benefits mto ma mcountry mreceiving mFDI m- mANS-Capital mInflow, mTechnology mSpillover,
mAdvanced mManagement mKnow-How, mJob mcreation
Costs mto ma mcountry mreceiving mFDI m- mANS-Loss mof mSovereignty, mAdverse meffects
mon mcompetition, m
Capital moutflow.
How mdo mresources mand mcapabilities minfluence mthe mcompetitive mdynamics mof ma
mbusiness? m- mANS-Resource msimilarity mand mmarket mcommonality mcan myield ma
mpowerful mframework mfor mcompetitor manalysis.
Resource msimilarity m- mANS-The mextent mto mwhich ma mgiven mcompetitor mpossesses
mstrategic mendowment mcomparable, min mterms mof mboth mtype mand mamount, mto
mthose mof mthe mfocal mfirm.
, How mdoes mresource msimilarity mimpact mcompetitive mdynamics? m- mANS-Firms mwith
ma mhigh mdegree mare mlikely mto mhave msimilar mcompetitive mactions. m(Starbuck's
minstant mcoffee m& mMcDonald's miced mcoffee)
Classical mtheories mof minternational mtrade m- mANS-Mercantilism, mAbsolute
madvantage, mand mComparative madvantage
Modern mtheory mview m- mANS-Dynamic
Classical mtheory mview m- mANS-Static
Absolute madvantage m- mANS-The meconomic madvantage mone mnation menjoys mthat mis
msuperior mto mother mnations
Comparative madvantage m- mANS-The madvantage mone meconomic mactivity mnation
menjoys min mcomparison mwith mother mnations m(relative, mnot mabsolute)
Mercantilism m- mANS-A mtheory mthat msuggests mthat mthe mwealth mof mthe mworld mis
mfixed mand mthat ma mnation mthat mexports mmore mand mimports mless mwill mbe mricher.
Features mof mthe mproduct mlife mcycle? m- mANS-New, mMaturing, mand mStandardized
Strategic mtrade m- mANS-Intervention mby mgovernments min mcertain mindustries mcan
menhance mtheir modds mfor minternational msuccess.
How mare msupply mand mdemand mrelated mto mthe mexchange mrate mof ma mcountry? m-
mANS-The mprice mof ma mcommodity, ma mcountry's mcurrency, mis mfundamentally
mdetermined mby mthis. mStrong mdemand mleads mto mprice mhikes; moversupply mresults
min mprice mdrops.
Which mtheory mcame mfirst? m- mANS-Mercantilism m(although mboth mare mof mthe midea
mthat mgovernments mshould mactively mprotect mdomestic mindustries mfrom mimports mand
mvigorously mpromote mexports)
If ma mcompany mseeks mto mlimit mforeign mexchange mrate mexposure min mthe mforward
mdirection, mwhat mis mthe mmost meffective mway mto mdo mthis? m- mANS-Forward
mtransactions, man mact mknow mas mcurrency mhedging.
Transaction mrisk m- mANS-The mexchange mrate mrisk massociated mwith mthe mtime mdelay
mbetween mentering minto ma mcontract mand msettling mit.
Hedging m- mANS-A mtransaction, msuch mas mforward mtransactions, mthat mprotects
mtraders mand minvestors mfrom mexposure mto mthe mfluctuations mof mthe mspot mrate.
Currency mhedging m- mANS-A mway mto mprotect mtraders mand minvestors mfrom mbeing
mexposed mto mthe mfluctuations mof mthe mspot mrate
MANAGERS EXAM QUESTION WITH WELL
RATIONALE
Views mon mGlobalization m- mANS-New, mEvolutionary, mand mPendulum
"New" mview mon mglobalization m- mANS-A mforce msweeping mthrough mthe mworld min
mrecent mtimes.
"Evolutionary" mview mon mglobalization m- mANS-A mlong-run mhistorical mevolution msince
mthe mdawn mof mhuman mhistory
"Pendulum" mview mon mglobalization m- mANS-One mthat mswings mfrom mone mextreme mto
manother mfrom mtime mto mtime
Foreign mDirect mInvestment m- mANS-Direct minvestment min, mcontrol, mand
mmanagement mof mvalue-added mactivities min mother mcountries
Political mviews mon mFDI m- mANS-Radical mView, mFree mMarket mView, mPragmatic
mNationalism
Benefits mto ma mcountry mreceiving mFDI m- mANS-Capital mInflow, mTechnology mSpillover,
mAdvanced mManagement mKnow-How, mJob mcreation
Costs mto ma mcountry mreceiving mFDI m- mANS-Loss mof mSovereignty, mAdverse meffects
mon mcompetition, m
Capital moutflow.
How mdo mresources mand mcapabilities minfluence mthe mcompetitive mdynamics mof ma
mbusiness? m- mANS-Resource msimilarity mand mmarket mcommonality mcan myield ma
mpowerful mframework mfor mcompetitor manalysis.
Resource msimilarity m- mANS-The mextent mto mwhich ma mgiven mcompetitor mpossesses
mstrategic mendowment mcomparable, min mterms mof mboth mtype mand mamount, mto
mthose mof mthe mfocal mfirm.
, How mdoes mresource msimilarity mimpact mcompetitive mdynamics? m- mANS-Firms mwith
ma mhigh mdegree mare mlikely mto mhave msimilar mcompetitive mactions. m(Starbuck's
minstant mcoffee m& mMcDonald's miced mcoffee)
Classical mtheories mof minternational mtrade m- mANS-Mercantilism, mAbsolute
madvantage, mand mComparative madvantage
Modern mtheory mview m- mANS-Dynamic
Classical mtheory mview m- mANS-Static
Absolute madvantage m- mANS-The meconomic madvantage mone mnation menjoys mthat mis
msuperior mto mother mnations
Comparative madvantage m- mANS-The madvantage mone meconomic mactivity mnation
menjoys min mcomparison mwith mother mnations m(relative, mnot mabsolute)
Mercantilism m- mANS-A mtheory mthat msuggests mthat mthe mwealth mof mthe mworld mis
mfixed mand mthat ma mnation mthat mexports mmore mand mimports mless mwill mbe mricher.
Features mof mthe mproduct mlife mcycle? m- mANS-New, mMaturing, mand mStandardized
Strategic mtrade m- mANS-Intervention mby mgovernments min mcertain mindustries mcan
menhance mtheir modds mfor minternational msuccess.
How mare msupply mand mdemand mrelated mto mthe mexchange mrate mof ma mcountry? m-
mANS-The mprice mof ma mcommodity, ma mcountry's mcurrency, mis mfundamentally
mdetermined mby mthis. mStrong mdemand mleads mto mprice mhikes; moversupply mresults
min mprice mdrops.
Which mtheory mcame mfirst? m- mANS-Mercantilism m(although mboth mare mof mthe midea
mthat mgovernments mshould mactively mprotect mdomestic mindustries mfrom mimports mand
mvigorously mpromote mexports)
If ma mcompany mseeks mto mlimit mforeign mexchange mrate mexposure min mthe mforward
mdirection, mwhat mis mthe mmost meffective mway mto mdo mthis? m- mANS-Forward
mtransactions, man mact mknow mas mcurrency mhedging.
Transaction mrisk m- mANS-The mexchange mrate mrisk massociated mwith mthe mtime mdelay
mbetween mentering minto ma mcontract mand msettling mit.
Hedging m- mANS-A mtransaction, msuch mas mforward mtransactions, mthat mprotects
mtraders mand minvestors mfrom mexposure mto mthe mfluctuations mof mthe mspot mrate.
Currency mhedging m- mANS-A mway mto mprotect mtraders mand minvestors mfrom mbeing
mexposed mto mthe mfluctuations mof mthe mspot mrate
