WGU C211 - GLOBAL ECONOMICS FOR
MANAGERS PRACTICE QUESTIONS WITH
CORRECT SOLUTIONS GRADED A+ 2026.
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
1
,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
2
, 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.
3
MANAGERS PRACTICE QUESTIONS WITH
CORRECT SOLUTIONS GRADED A+ 2026.
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
1
,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
2
, 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.
3
