WGU C211 Global Economics for Managers questions and answers verified for accuracy(100% pass)

Absolute Advantage The economic advantage one nation enjoys that is absolutely superior to other nations. Accounting Profit Total revenue minus total explicit cost Acquisition a wholly owned subsidiary is created through direct foreign investment. Administrative Policy Bureaucratic rules that make it harder to import foreign goods. Agglomeration Clustering of economic activities in certain locations. Beyond geographic advantages, location-specific advantages also arise from the clustering of economic activities in certain locations. Antidumping Duty Tariffs levied on imports that have been "dumped" (selling below costs to "unfairly" drive domestic firms out of business). Antidumping Law Law that makes it illegal for an exporter to sell goods below cost abroad with the intent to raise prices after eliminating local rivals. Antitrust Law Law that outlaws cartels (trusts). Antitrust Policy Government policy designed to combat monopolies and cartels. Attack An initial set of actions to gain competitive advantage. Automatic Stabilizers changes in fiscal policy that stimulate aggregate demand when the economy goes into a recession without policymakers having to take any deliberate action Average fixed cost Fixed cost divided by the quantity of output AFC = FC/Q Average Revenue total revenue divided by the quantity sold Average total cost Total cost divided by the quantity of output ATC = TC / Q Average variable cost Variable cost divided by the quantity of output AVC = VC/Q Balance of payments a country's international transaction statement. Balance of Trade The aggregation of importing and exporting that leads to the country-level trade surplus or deficit. Bandwagon effect the result of investors moving as a herd in the same direction at the same time. ٭ Bank Capital the resources a bank's owners have put into the institution Bargaining Power Ability to extract favorable outcome from negotiations due to one party's strengths. Base of the Pyramid Economies where people make less than $2,000 per capita per year. Beijing Consensus A view that questions Washington Consensus' belief in the superiority of private ownership over state ownership in economic policy making, which is often associated with the position held by the Chinese government. Bid rate the price offered to buy a currency. Blue Ocean Strategy Strategy that focuses on developing new markets ("blue ocean") and avoids attacking core markets defended by rivals, which is likely to result in a bloody price war or a "red ocean." Bounded Rationality The necessity of making rational decisions in the absence of complete information. Bretton Woods system a system in which all currencies were pegged at a fixed rate to the U.S. dollar. BRIC Brazil, Russia, India, and China. Budget Constraint the limit on the consumption bundles that a consumer can afford Build-operate-transfer (BOT) agreement a non-equity mode of entry used to build a longer-term presence. Capacity to Punish Sufficient resources possessed by a price leader to deter and combat defection. Capital flight a phenomenon in which a large number of individuals and companies exchange domestic currencies for a foreign currency. ٭ Capital Requirement a government regulation specifying a minimum amount of bank capital Cartel (trust) An output- and price-fixing entity involving multiple competitors. Central Bank an institution designed to oversee the banking system and regulate the quantity of money in the economy Civil Law A legal tradition that uses comprehensive statutes and codes as a primary means to form legal judgments. It is "the oldest, the most influential, and the most widely distributed around the world." ٭ Classical Trade Theories The major theories of international trade that were advanced before the 20th century, which consist of (1) mercantilism, (2) absolute advantage, and (3) comparative advantage. (static) ٭ Clean (or free) float a pure market solution to determine exchange rates. ٭ Cognitive Pillar The internalized (or taken-for granted) values and beliefs that guide individual and firm behavior. ٭ Collusion Collective attempts between competing firms to reduce competition. An agreement among firms in a market about quantities to produce or prices to charge Collusive Price Setting Price setting by monopolists or collusion parties at a level higher than the competitive level. Co-marketing refers to efforts among a number of firms to jointly market their products and services.