WGU C211 - GLOBAL ECONOMICS FOR MANAGERS TEST WITH
ANSWERS
ExplaincthecNew,cEvolutionary,candcPendulumcviewscofcGlobalization.cHowcdocthese
cdiffercfromconecanother?c-ccorrectcanswer-"New"cviewconcglobalizationc-
cAcforcecsweepingcthroughcthecworldcincrecentctimes.
"Evolutionary"cviewconcglobalizationc-cAclong-
runchistoricalcevolutioncsincecthecdawncofchumanchistory.
"Pendulum"cviewconcglobalizationc-
cOnecthatcswingscfromconecextremectocanothercfromctimectoctime
**WhatcdifferentcpoliticalcviewscexistconcForeigncDirectcInvestmentcFDI?**c-
ccorrectcanswer-RadicalcView,cFreecMarketcView,cPragmaticcNationalism
**answercincludescradicalism**
WhatciscForeigncDirectcInvestment?c-ccorrectcanswer-
Directcinvestmentcin,ccontrol,candcmanagementcofcvalue-
addedcactivitiescincotherccountries
WhatcbenefitscexistctocaccountrycreceivingcFDI?c-ccorrectcanswer-
CapitalcInflow,cTechnologycSpillover,cAdvancedcManagementcKnow-
How,cJobccreation
WhatccostscexistctocaccountrycreceivingcFDI?c-ccorrectcanswer-
LosscofcSovereignty,cAdverseceffectsconccompetition,c
Capitalcoutflow.
Howcdocresourcescandccapabilitiescinfluencectheccompetitivecdynamicscofcacbusines
s?c-ccorrectcanswer-
Resourcecsimilaritycandcmarketccommonalityccancyieldcacpowerfulcframeworkcforcco
mpetitorcanalysis.
, **Whatciscresourcecsimilaritycandchowcdoescthiscimpactccompetitivecdynamics?**c-
ccorrectcanswer-
Thecextentctocwhichcacgivenccompetitorcpossessescstrategiccendowmentccomparabl
e,cinctermscofcbothctypecandcamount,ctocthosecofcthecfocalcfirm.
*Firmscwithcachighcdegreecareclikelyctochavecsimilarccompetitivecactions.c(Starbuck'sc
instantccoffeec&cMcDonald'scicedccoffee)
Givecacdescriptioncofcthecclassicalctheorycofcinternationalctrade.c-ccorrectcanswer-
Mercantilism,cAbsolutecadvantage,candcComparativecadvantage
Howcwouldcthecmodernctheoryccomparectocthecclassicalctheory?c-ccorrectcanswer-
Modernc-cDynamic
Classicalc-cStatic
Comparecabsolutecadvantagectoccomparativecadvantage.cWhatcdifferencescexist?c-
ccorrectcanswer-Absolutecadvantagec-
cThececonomiccadvantageconecnationcenjoyscthatciscsuperiorctocothercnations
Comparativecadvantagec-
cThecadvantageconececonomiccactivitycnationcenjoyscinccomparisoncwithcothercnatio
nsc(relative,cnotcabsolute)
Whatciscmercantilismcandcwhyciscthiscancimportantcterm?c-ccorrectcanswer-
Actheorycthatcsuggestscthatcthecwealthcofcthecworldciscfixedcandcthatcacnationcthatcex
portscmorecandcimportsclesscwillcbecricher.
**Whatcarectheccriticalcfeaturescofcthecproductclifeccycle?**c-ccorrectcanswer-
1.cNewcstage:cprod.cofcacnewcproductc(ex.cTV)cthatccommandscacpricecpremiumcwillc
concentratecincthecUSA,cwhichcexportsctocothercdevelopedcnations.
2.cMaturingcstage:cdemandc&cabilityctocprod.;cgrowcincothercdev.cnationsc(ex.cAustral
iac&cItaly),citciscnowcworthwhilectocproducecthere.
3.cStandardizedcstage:cthecprev.cnewcprod.ciscstandardizedc(orccommoditized).c
Prod.cwillcnowcmovectoclow-
costcdev.cnations,cwhichcexportctocdev.cnations.cIncothercwords,ccomparativecadvant
agecmaycchangecoverctime.
Howcwouldcyoucdescribecstrategicctrade?c-ccorrectcanswer-
Interventioncbycgovernmentscinccertaincindustriesccancenhancectheircoddscforcinterna
tionalcsuccess.
**Howcarecsupplycandcdemandcrelatedctocthecexchangecratecofcaccountry?**c-
ccorrectcanswer-
Thecpricecofcaccommodity,caccountry'sccurrency,ciscfundamentallycdeterminedcbycthis
.cStrongcdemandcleadsctocpricechikes;coversupplycresultscincpricecdrops.
Whichctheoryccamecfirst,cmercantilismcorcmodern-daycprotectionism?c-
ccorrectcanswer-
Mercantilismc(althoughcbothcarecofcthecideacthatcgovernmentscshouldcactivelycprotec
tcdomesticcindustriescfromcimportscandcvigorouslycpromotecexports)
ANSWERS
ExplaincthecNew,cEvolutionary,candcPendulumcviewscofcGlobalization.cHowcdocthese
cdiffercfromconecanother?c-ccorrectcanswer-"New"cviewconcglobalizationc-
cAcforcecsweepingcthroughcthecworldcincrecentctimes.
"Evolutionary"cviewconcglobalizationc-cAclong-
runchistoricalcevolutioncsincecthecdawncofchumanchistory.
"Pendulum"cviewconcglobalizationc-
cOnecthatcswingscfromconecextremectocanothercfromctimectoctime
**WhatcdifferentcpoliticalcviewscexistconcForeigncDirectcInvestmentcFDI?**c-
ccorrectcanswer-RadicalcView,cFreecMarketcView,cPragmaticcNationalism
**answercincludescradicalism**
WhatciscForeigncDirectcInvestment?c-ccorrectcanswer-
Directcinvestmentcin,ccontrol,candcmanagementcofcvalue-
addedcactivitiescincotherccountries
WhatcbenefitscexistctocaccountrycreceivingcFDI?c-ccorrectcanswer-
CapitalcInflow,cTechnologycSpillover,cAdvancedcManagementcKnow-
How,cJobccreation
WhatccostscexistctocaccountrycreceivingcFDI?c-ccorrectcanswer-
LosscofcSovereignty,cAdverseceffectsconccompetition,c
Capitalcoutflow.
Howcdocresourcescandccapabilitiescinfluencectheccompetitivecdynamicscofcacbusines
s?c-ccorrectcanswer-
Resourcecsimilaritycandcmarketccommonalityccancyieldcacpowerfulcframeworkcforcco
mpetitorcanalysis.
, **Whatciscresourcecsimilaritycandchowcdoescthiscimpactccompetitivecdynamics?**c-
ccorrectcanswer-
Thecextentctocwhichcacgivenccompetitorcpossessescstrategiccendowmentccomparabl
e,cinctermscofcbothctypecandcamount,ctocthosecofcthecfocalcfirm.
*Firmscwithcachighcdegreecareclikelyctochavecsimilarccompetitivecactions.c(Starbuck'sc
instantccoffeec&cMcDonald'scicedccoffee)
Givecacdescriptioncofcthecclassicalctheorycofcinternationalctrade.c-ccorrectcanswer-
Mercantilism,cAbsolutecadvantage,candcComparativecadvantage
Howcwouldcthecmodernctheoryccomparectocthecclassicalctheory?c-ccorrectcanswer-
Modernc-cDynamic
Classicalc-cStatic
Comparecabsolutecadvantagectoccomparativecadvantage.cWhatcdifferencescexist?c-
ccorrectcanswer-Absolutecadvantagec-
cThececonomiccadvantageconecnationcenjoyscthatciscsuperiorctocothercnations
Comparativecadvantagec-
cThecadvantageconececonomiccactivitycnationcenjoyscinccomparisoncwithcothercnatio
nsc(relative,cnotcabsolute)
Whatciscmercantilismcandcwhyciscthiscancimportantcterm?c-ccorrectcanswer-
Actheorycthatcsuggestscthatcthecwealthcofcthecworldciscfixedcandcthatcacnationcthatcex
portscmorecandcimportsclesscwillcbecricher.
**Whatcarectheccriticalcfeaturescofcthecproductclifeccycle?**c-ccorrectcanswer-
1.cNewcstage:cprod.cofcacnewcproductc(ex.cTV)cthatccommandscacpricecpremiumcwillc
concentratecincthecUSA,cwhichcexportsctocothercdevelopedcnations.
2.cMaturingcstage:cdemandc&cabilityctocprod.;cgrowcincothercdev.cnationsc(ex.cAustral
iac&cItaly),citciscnowcworthwhilectocproducecthere.
3.cStandardizedcstage:cthecprev.cnewcprod.ciscstandardizedc(orccommoditized).c
Prod.cwillcnowcmovectoclow-
costcdev.cnations,cwhichcexportctocdev.cnations.cIncothercwords,ccomparativecadvant
agecmaycchangecoverctime.
Howcwouldcyoucdescribecstrategicctrade?c-ccorrectcanswer-
Interventioncbycgovernmentscinccertaincindustriesccancenhancectheircoddscforcinterna
tionalcsuccess.
**Howcarecsupplycandcdemandcrelatedctocthecexchangecratecofcaccountry?**c-
ccorrectcanswer-
Thecpricecofcaccommodity,caccountry'sccurrency,ciscfundamentallycdeterminedcbycthis
.cStrongcdemandcleadsctocpricechikes;coversupplycresultscincpricecdrops.
Whichctheoryccamecfirst,cmercantilismcorcmodern-daycprotectionism?c-
ccorrectcanswer-
Mercantilismc(althoughcbothcarecofcthecideacthatcgovernmentscshouldcactivelycprotec
tcdomesticcindustriescfromcimportscandcvigorouslycpromotecexports)
