WGU C211 - GLOBAL ECONOMICS FOR MANAGERS
EXAM QUESTIONS WITH BEST ANSWERS
Views mon mGlobalization m- mANSWER-New, mEvolutionary, mand mPendulum
"New" mview mon mglobalization m- mANSWER-A mforce msweeping mthrough mthe mworld
min mrecent mtimes.
"Evolutionary" mview mon mglobalization m- mANSWER-A mlong-run mhistorical mevolution
msince mthe mdawn mof mhuman mhistory
"Pendulum" mview mon mglobalization m- mANSWER-One mthat mswings mfrom mone
mextreme mto manother mfrom mtime mto mtime
Foreign mDirect mInvestment m- mANSWER-Direct minvestment min, mcontrol, mand
mmanagement mof mvalue-added mactivities min mother mcountries
Political mviews mon mFDI m- mANSWER-Radical mView, mFree mMarket mView, mPragmatic
mNationalism
Benefits mto ma mcountry mreceiving mFDI m- mANSWER-Capital mInflow, mTechnology
mSpillover, mAdvanced mManagement mKnow-How, mJob mcreation
Costs mto ma mcountry mreceiving mFDI m- mANSWER-Loss mof mSovereignty, mAdverse
meffects mon mcompetition, m
Capital moutflow.
How mdo mresources mand mcapabilities minfluence mthe mcompetitive mdynamics mof ma
mbusiness? m- mANSWER-Resource msimilarity mand mmarket mcommonality mcan myield
ma mpowerful mframework mfor mcompetitor manalysis.
Resource msimilarity m- mANSWER-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- mANSWER-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- mANSWER-Mercantilism, mAbsolute
madvantage, mand mComparative madvantage
, Modern mtheory mview m- mANSWER-Dynamic
Classical mtheory mview m- mANSWER-Static
Absolute madvantage m- mANSWER-The meconomic madvantage mone mnation menjoys
mthat mis msuperior mto mother mnations
Comparative madvantage m- mANSWER-The madvantage mone meconomic mactivity
mnation menjoys min mcomparison mwith mother mnations m(relative, mnot mabsolute)
Mercantilism m- mANSWER-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- mANSWER-New, mMaturing, mand
mStandardized
Strategic mtrade m- mANSWER-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-
mANSWER-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- mANSWER-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- mANSWER-Forward
mtransactions, man mact mknow mas mcurrency mhedging.
Transaction mrisk m- mANSWER-The mexchange mrate mrisk massociated mwith mthe mtime
mdelay mbetween mentering minto ma mcontract mand msettling mit.
Hedging m- mANSWER-A mtransaction, msuch mas mforward mtransactions, mthat mprotects
mtraders mand minvestors mfrom mexposure mto mthe mfluctuations mof mthe mspot mrate.
Currency mhedging m- mANSWER-A mway mto mprotect mtraders mand minvestors mfrom
mbeing mexposed mto mthe mfluctuations mof mthe mspot mrate
Strategic mhedging m- mANSWER-A mmeans mof mspreading mout mactivities min mdifferent
mcurrency mzones min morder mto moffset mthe mcurrency mlosses min mcertain mregions
mthrough mgains min mother mregions m(currency mdiversification)
EXAM QUESTIONS WITH BEST ANSWERS
Views mon mGlobalization m- mANSWER-New, mEvolutionary, mand mPendulum
"New" mview mon mglobalization m- mANSWER-A mforce msweeping mthrough mthe mworld
min mrecent mtimes.
"Evolutionary" mview mon mglobalization m- mANSWER-A mlong-run mhistorical mevolution
msince mthe mdawn mof mhuman mhistory
"Pendulum" mview mon mglobalization m- mANSWER-One mthat mswings mfrom mone
mextreme mto manother mfrom mtime mto mtime
Foreign mDirect mInvestment m- mANSWER-Direct minvestment min, mcontrol, mand
mmanagement mof mvalue-added mactivities min mother mcountries
Political mviews mon mFDI m- mANSWER-Radical mView, mFree mMarket mView, mPragmatic
mNationalism
Benefits mto ma mcountry mreceiving mFDI m- mANSWER-Capital mInflow, mTechnology
mSpillover, mAdvanced mManagement mKnow-How, mJob mcreation
Costs mto ma mcountry mreceiving mFDI m- mANSWER-Loss mof mSovereignty, mAdverse
meffects mon mcompetition, m
Capital moutflow.
How mdo mresources mand mcapabilities minfluence mthe mcompetitive mdynamics mof ma
mbusiness? m- mANSWER-Resource msimilarity mand mmarket mcommonality mcan myield
ma mpowerful mframework mfor mcompetitor manalysis.
Resource msimilarity m- mANSWER-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- mANSWER-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- mANSWER-Mercantilism, mAbsolute
madvantage, mand mComparative madvantage
, Modern mtheory mview m- mANSWER-Dynamic
Classical mtheory mview m- mANSWER-Static
Absolute madvantage m- mANSWER-The meconomic madvantage mone mnation menjoys
mthat mis msuperior mto mother mnations
Comparative madvantage m- mANSWER-The madvantage mone meconomic mactivity
mnation menjoys min mcomparison mwith mother mnations m(relative, mnot mabsolute)
Mercantilism m- mANSWER-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- mANSWER-New, mMaturing, mand
mStandardized
Strategic mtrade m- mANSWER-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-
mANSWER-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- mANSWER-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- mANSWER-Forward
mtransactions, man mact mknow mas mcurrency mhedging.
Transaction mrisk m- mANSWER-The mexchange mrate mrisk massociated mwith mthe mtime
mdelay mbetween mentering minto ma mcontract mand msettling mit.
Hedging m- mANSWER-A mtransaction, msuch mas mforward mtransactions, mthat mprotects
mtraders mand minvestors mfrom mexposure mto mthe mfluctuations mof mthe mspot mrate.
Currency mhedging m- mANSWER-A mway mto mprotect mtraders mand minvestors mfrom
mbeing mexposed mto mthe mfluctuations mof mthe mspot mrate
Strategic mhedging m- mANSWER-A mmeans mof mspreading mout mactivities min mdifferent
mcurrency mzones min morder mto moffset mthe mcurrency mlosses min mcertain mregions
mthrough mgains min mother mregions m(currency mdiversification)
