WGU C211 Global Economics for Managers –
Objective Assessment Practice Questions with Verified
Answers / C211 OA Practice Exam Test Bank (300+
Correctly Answered Recent Exam Questions)
A painter spends $200 on paint. He then bills the homeowner $1,000 to cover his
time and his expenses. What is the amount of these transactions that is added to
gross domestic product?
A) $1,000
B) $200
C) $800
D) $1,200 -ANSWER- A) $1,000
A U.S. State purchases a fleet of new highway patrol vehicles manufactured in
Japan. Which two statements correctly describe how the components of U.S. gross
domestic product are affected?
A) Net exports decrease; government expenditures increase
B) Net exports increase; government expenditures decrease
C) Net exports decrease; government expenditures decrease
D) Net exports increase; government expenditures increase -ANSWER- A) Net
exports decrease; government expenditures increase
A nation ends a tariff on bananas, which is an imported product. What will be the
effect on banana prices within that nation?
A) The price will match the global market price
B) The price will increase above the global market price
C) The price will decrease below the global market price
D) The price will remain unchanged -ANSWER- A) The price will match the
global market price
What effect does implementing a new tariff have on the government that
implements it?
A) Tax revenue increases
B) Tax revenue decreases
1
,C) Tax revenue stays the same
D) Tax revenue becomes zero -ANSWER- A) Tax revenue increases
The resource-based view of global business differs from the institution-based view
of global business in that the resource-based view _____.
A) Focuses on the internal strengths of the firm
B) Advocates adopting a single method for achieving globalization
C) Supports the ideology of total globalization
D) Postulates the ideology of localization -ANSWER- A) Focuses on the internal
strengths of the firm
Which of the following is true of globalization according to the "pendulum view"
perspective?
A) Globalization is a not a one-directional phenomenon
B) Globalization is a recent phenomenon
C) Globalization is always increasing
D) Globalization has ended -ANSWER- A) Globalization is a not a one-directional
phenomenon
The _____ of globalization suggests that globalization is neither recent nor one-
directional.
A) Pendulum view
B) Long-run historical view
C) Colonial view
D) New-force view -ANSWER- A) Pendulum view
What is the financial environment in which exchange rates and payments for goods
and services are conducted?
A) International monetary system
B) Foreign exchange market
C) Global financial system
D) International trade system -ANSWER- A) International monetary system
What happens to a country's real exchange rate and nominal interest rate as the
price level increases, assuming all other factors are unchanged?
A) Exchange rates depreciate; interest rates increase
B) Exchange rates appreciate; interest rates decrease
C) Exchange rates depreciate; interest rates decrease
D) Exchange rates appreciate; interest rates increase -ANSWER- A) Exchange
rates depreciate; interest rates increase
2
,What is the easiest method nonfinancial companies use to handle currency
fluctuations?
A) Currency diversification
B) Currency hedging
C) Currency swaps
D) Forward contracts -ANSWER- A) Currency diversification
Which strategy minimizes the risk of unanticipated changes in future exchange
rates?
A) Currency swap
B) Spot transaction
C) Forward transaction
D) Currency speculation -ANSWER- A) Currency swap
A company is looking for a location with an abundance of ground-breaking
individuals, firms, and universities. Which type of strategic goal is this company
demonstrating?
A) Innovation-seeking
B) Market-seeking
C) Efficiency-seeking
D) Resource-seeking -ANSWER- A) Innovation-seeking
What advantage comes with not sharing benefits with late entrants?
A) First-mover advantage
B) Late-mover advantage
C) Second-mover advantage
D) Early-mover advantage -ANSWER- A) First-mover advantage
Which entry mode is a non-equity agreement for a company contemplating entry
into a foreign market?
A) Licensing
B) Wholly owned subsidiary
C) Joint venture
D) Acquisition -ANSWER- A) Licensing
What size commitment is required for a non-equity mode of entry into a foreign
market?
A) Small commitment
B) Large commitment
3
, C) Medium commitment
D) No commitment -ANSWER- A) Small commitment
What are two supportive pillars for an informal institution?
A) Cognitive and normative
B) Regulatory and normative
C) Regulatory and cognitive
D) Formal and informal -ANSWER- A) Cognitive and normative
Which of the following is true of semiglobalization?
A) It is a type of globalization that lies between total isolation and total
globalization
B) It is the complete absence of globalization
C) It is total globalization
D) It is a recent phenomenon -ANSWER- A) It is a type of globalization that lies
between total isolation and total globalization
Globalization can be viewed as:
A) A new force sweeping through the world in recent times
B) A long-run historical evolution since the dawn of human history
C) A pendulum that swings from one extreme to another from time to time
D) All of these answers -ANSWER- D) All of these answers
Name the three views of globalization.
A) A recent force, a long-running evolution, and a pendulum
B) A new force, a colonial force, and a modern force
C) A historical force, a modern force, and a future force
D) A cultural force, an economic force, and a political force -ANSWER- A) A
recent force, a long-running evolution, and a pendulum
The _____ theory viewed international trade as a zero-sum game.
A) Mercantilism
B) Absolute advantage
C) Comparative advantage
D) Product life cycle -ANSWER- A) Mercantilism
The _____ principle advocated that governments should actively protect domestic
industries from imports and vigorously promote exports.
A) Protectionism
B) Comparative advantage
4
Objective Assessment Practice Questions with Verified
Answers / C211 OA Practice Exam Test Bank (300+
Correctly Answered Recent Exam Questions)
A painter spends $200 on paint. He then bills the homeowner $1,000 to cover his
time and his expenses. What is the amount of these transactions that is added to
gross domestic product?
A) $1,000
B) $200
C) $800
D) $1,200 -ANSWER- A) $1,000
A U.S. State purchases a fleet of new highway patrol vehicles manufactured in
Japan. Which two statements correctly describe how the components of U.S. gross
domestic product are affected?
A) Net exports decrease; government expenditures increase
B) Net exports increase; government expenditures decrease
C) Net exports decrease; government expenditures decrease
D) Net exports increase; government expenditures increase -ANSWER- A) Net
exports decrease; government expenditures increase
A nation ends a tariff on bananas, which is an imported product. What will be the
effect on banana prices within that nation?
A) The price will match the global market price
B) The price will increase above the global market price
C) The price will decrease below the global market price
D) The price will remain unchanged -ANSWER- A) The price will match the
global market price
What effect does implementing a new tariff have on the government that
implements it?
A) Tax revenue increases
B) Tax revenue decreases
1
,C) Tax revenue stays the same
D) Tax revenue becomes zero -ANSWER- A) Tax revenue increases
The resource-based view of global business differs from the institution-based view
of global business in that the resource-based view _____.
A) Focuses on the internal strengths of the firm
B) Advocates adopting a single method for achieving globalization
C) Supports the ideology of total globalization
D) Postulates the ideology of localization -ANSWER- A) Focuses on the internal
strengths of the firm
Which of the following is true of globalization according to the "pendulum view"
perspective?
A) Globalization is a not a one-directional phenomenon
B) Globalization is a recent phenomenon
C) Globalization is always increasing
D) Globalization has ended -ANSWER- A) Globalization is a not a one-directional
phenomenon
The _____ of globalization suggests that globalization is neither recent nor one-
directional.
A) Pendulum view
B) Long-run historical view
C) Colonial view
D) New-force view -ANSWER- A) Pendulum view
What is the financial environment in which exchange rates and payments for goods
and services are conducted?
A) International monetary system
B) Foreign exchange market
C) Global financial system
D) International trade system -ANSWER- A) International monetary system
What happens to a country's real exchange rate and nominal interest rate as the
price level increases, assuming all other factors are unchanged?
A) Exchange rates depreciate; interest rates increase
B) Exchange rates appreciate; interest rates decrease
C) Exchange rates depreciate; interest rates decrease
D) Exchange rates appreciate; interest rates increase -ANSWER- A) Exchange
rates depreciate; interest rates increase
2
,What is the easiest method nonfinancial companies use to handle currency
fluctuations?
A) Currency diversification
B) Currency hedging
C) Currency swaps
D) Forward contracts -ANSWER- A) Currency diversification
Which strategy minimizes the risk of unanticipated changes in future exchange
rates?
A) Currency swap
B) Spot transaction
C) Forward transaction
D) Currency speculation -ANSWER- A) Currency swap
A company is looking for a location with an abundance of ground-breaking
individuals, firms, and universities. Which type of strategic goal is this company
demonstrating?
A) Innovation-seeking
B) Market-seeking
C) Efficiency-seeking
D) Resource-seeking -ANSWER- A) Innovation-seeking
What advantage comes with not sharing benefits with late entrants?
A) First-mover advantage
B) Late-mover advantage
C) Second-mover advantage
D) Early-mover advantage -ANSWER- A) First-mover advantage
Which entry mode is a non-equity agreement for a company contemplating entry
into a foreign market?
A) Licensing
B) Wholly owned subsidiary
C) Joint venture
D) Acquisition -ANSWER- A) Licensing
What size commitment is required for a non-equity mode of entry into a foreign
market?
A) Small commitment
B) Large commitment
3
, C) Medium commitment
D) No commitment -ANSWER- A) Small commitment
What are two supportive pillars for an informal institution?
A) Cognitive and normative
B) Regulatory and normative
C) Regulatory and cognitive
D) Formal and informal -ANSWER- A) Cognitive and normative
Which of the following is true of semiglobalization?
A) It is a type of globalization that lies between total isolation and total
globalization
B) It is the complete absence of globalization
C) It is total globalization
D) It is a recent phenomenon -ANSWER- A) It is a type of globalization that lies
between total isolation and total globalization
Globalization can be viewed as:
A) A new force sweeping through the world in recent times
B) A long-run historical evolution since the dawn of human history
C) A pendulum that swings from one extreme to another from time to time
D) All of these answers -ANSWER- D) All of these answers
Name the three views of globalization.
A) A recent force, a long-running evolution, and a pendulum
B) A new force, a colonial force, and a modern force
C) A historical force, a modern force, and a future force
D) A cultural force, an economic force, and a political force -ANSWER- A) A
recent force, a long-running evolution, and a pendulum
The _____ theory viewed international trade as a zero-sum game.
A) Mercantilism
B) Absolute advantage
C) Comparative advantage
D) Product life cycle -ANSWER- A) Mercantilism
The _____ principle advocated that governments should actively protect domestic
industries from imports and vigorously promote exports.
A) Protectionism
B) Comparative advantage
4
