WGU FVC1.1.A GLOBAL BUSINESS
Assessment prep exam
Questions with detailed answers
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Which type of globalization is represented by Sure Start expanding into South
America, Europe, and Asia? - ANSWER ✅Economic. Economic globalization is
the globalization of production, sales, and finance activities in international
markets around the world.
Sure Start is starting a new division for rechargeable batteries in different parts of
the world.
What was the globalization driver of this decision? - ANSWER ✅Competition.
Competition drivers are about entering new markets to beat competitors. Sure Start
has identified a market that does not have a lot of competition since it is a fairly
new market.
Which anti-globalization argument could lead to Sure Start continuing to maintain
its current factories instead of moving them to Asia? - ANSWER ✅Factory
workers in North Carolina fear their jobs will be moved to another country. Labor
in Asia can be cheaper than in NC, and critics argue that outsourcing
manufacturing could lead to job loss in the home country.
What effect does a command economy have on the process of globalization?
The economy is competitive, so the globalization process will be slowed.
The government is less flexible, so the globalization process is challenged.
The economy is self-sufficient, so the globalization process remains unaffected.
The government encourages a free market, so the globalization process is
accelerated. - ANSWER ✅The government is less flexible, so the globalization
process is stopped.
,Which core principle of the World Trade Organization supports equality among
member nations and helps fight discrimination among them?
Multilateral trade agreements
Controlled tariffs
Most-favored-nation (MFN) status
Free trade - ANSWER ✅Most-favored-nation (MFN) status
What is true regarding free trade?
Free trade leads to specialization of each country and increases production
efficiency.
Free trade generates manufacturing jobs in developed countries.
Free trade is weakened when countries join regional economic integrations.
Free trade generates more losses than gains for participating countries - ANSWER
✅Free trade leads to specialization of each country and increases production
efficiency.
Countries A and B participate in trade agreements that allow free trade among
participant countries. However, Country A imposed quotas on several imported
products to protect its domestic products.
What is the effect, if any, on the domestic prices of these products?
Cannot be determined
Stays the same
Increases
Decreases - ANSWER ✅Increases
How do governments help companies offset the cost of manufacturing
domestically?
Tariffs
Subsidies
Anti-trust laws
Anti-dumping laws - ANSWER ✅Subsidies
What would a mercantilist value the most?
Absolute advantage
,2 A trade surplus
Factors of production
Comparative advantage - ANSWER ✅2 A trade surplus
A firm in Country A exports products to Country B. The currency in Country B is
strong relative to the currency in Country A. What does this mean for the firm?
Increased domestic sales
More valuable export sales
Decreased foreign sales
Less valuable export sales - ANSWER ✅More valuable export sales
How is global business positively affected by intercultural exchange? - ANSWER
✅It increases worldwide connections that support commodity trading.
How does globalization support tolerance for different people and ideas? -
ANSWER ✅By increasing the access to information
A business has recently started selling in a new global marketplace. Shortly after
the company made this global expansion, the new country opted to implement ad
valorem tariffs. How will this change affect the company? - ANSWER ✅It will
levy a variable tax based on the value of goods imported.
Which business component does the TRIPS agreement help protect for member
nations? - ANSWER ✅Intellectual property protection for all member nations
Countries A, B, and C have a trade agreement. Country C imposes high tariffs on
all raw materials imported from Country A, and Country B imposes a lower tax on
the same raw materials. These raw materials are unique to Countries B and C and
essential to Country A. What is the effect of this set of actions on these countries? -
ANSWER ✅Country A will do more business with Country B.
A company is conducting a legal risk analysis for a country that has a civil law
system. Which statement accurately characterizes this legal system?
It relies on the opinions of those well-trained in law.
It is based on a detailed set of laws that form a code.
It permits judges to interpret the law.
, It is a moral, not a commercial, system. - ANSWER ✅It is based on a detailed set
of laws that form a code.
Which fact should a company opening its operations in the U.S. state of Louisiana
note?
The state follows the canon law system.
The state has a mixed law system.
The state follows a Talmudic law system.
The state follows a customary law system. - ANSWER ✅The state has a mixed
law system.
A car manufacturer purchases raw materials from Country A, manufactures the
product in Country B, and has a sales force in Country C. Which term reflects this
production process that international agreements now enable? - ANSWER ✅Value
chain
A business invests in an assembly plant located near a port in a foreign country.
The business will import parts and raw materials for final assembly as a finished
product, then export these products for international sales. The business receives
tax incentives.
What is the name for the geographic area where these products are assembled? -
ANSWER ✅Export processing zones (EPZs)
A multinational corporation has manufacturing facilities in many Asian countries
due to cheaper labor. Which strategy is the corporation using?
Market expansion
Acquisition of resources
Realignment of capital expenditures
Centralized portfolio management - ANSWER ✅Acquisition of resources
What is the directional nature of contracts between international businesses? -
ANSWER ✅Horizontal contracts with vertical legal structure
A company is reviewing intangible assets that are covered by intellectual property
laws.
Which asset is being reviewed? - ANSWER ✅Copyright
Assessment prep exam
Questions with detailed answers
<updated syllabus>
Newest version
100% guaranteed pass
Which type of globalization is represented by Sure Start expanding into South
America, Europe, and Asia? - ANSWER ✅Economic. Economic globalization is
the globalization of production, sales, and finance activities in international
markets around the world.
Sure Start is starting a new division for rechargeable batteries in different parts of
the world.
What was the globalization driver of this decision? - ANSWER ✅Competition.
Competition drivers are about entering new markets to beat competitors. Sure Start
has identified a market that does not have a lot of competition since it is a fairly
new market.
Which anti-globalization argument could lead to Sure Start continuing to maintain
its current factories instead of moving them to Asia? - ANSWER ✅Factory
workers in North Carolina fear their jobs will be moved to another country. Labor
in Asia can be cheaper than in NC, and critics argue that outsourcing
manufacturing could lead to job loss in the home country.
What effect does a command economy have on the process of globalization?
The economy is competitive, so the globalization process will be slowed.
The government is less flexible, so the globalization process is challenged.
The economy is self-sufficient, so the globalization process remains unaffected.
The government encourages a free market, so the globalization process is
accelerated. - ANSWER ✅The government is less flexible, so the globalization
process is stopped.
,Which core principle of the World Trade Organization supports equality among
member nations and helps fight discrimination among them?
Multilateral trade agreements
Controlled tariffs
Most-favored-nation (MFN) status
Free trade - ANSWER ✅Most-favored-nation (MFN) status
What is true regarding free trade?
Free trade leads to specialization of each country and increases production
efficiency.
Free trade generates manufacturing jobs in developed countries.
Free trade is weakened when countries join regional economic integrations.
Free trade generates more losses than gains for participating countries - ANSWER
✅Free trade leads to specialization of each country and increases production
efficiency.
Countries A and B participate in trade agreements that allow free trade among
participant countries. However, Country A imposed quotas on several imported
products to protect its domestic products.
What is the effect, if any, on the domestic prices of these products?
Cannot be determined
Stays the same
Increases
Decreases - ANSWER ✅Increases
How do governments help companies offset the cost of manufacturing
domestically?
Tariffs
Subsidies
Anti-trust laws
Anti-dumping laws - ANSWER ✅Subsidies
What would a mercantilist value the most?
Absolute advantage
,2 A trade surplus
Factors of production
Comparative advantage - ANSWER ✅2 A trade surplus
A firm in Country A exports products to Country B. The currency in Country B is
strong relative to the currency in Country A. What does this mean for the firm?
Increased domestic sales
More valuable export sales
Decreased foreign sales
Less valuable export sales - ANSWER ✅More valuable export sales
How is global business positively affected by intercultural exchange? - ANSWER
✅It increases worldwide connections that support commodity trading.
How does globalization support tolerance for different people and ideas? -
ANSWER ✅By increasing the access to information
A business has recently started selling in a new global marketplace. Shortly after
the company made this global expansion, the new country opted to implement ad
valorem tariffs. How will this change affect the company? - ANSWER ✅It will
levy a variable tax based on the value of goods imported.
Which business component does the TRIPS agreement help protect for member
nations? - ANSWER ✅Intellectual property protection for all member nations
Countries A, B, and C have a trade agreement. Country C imposes high tariffs on
all raw materials imported from Country A, and Country B imposes a lower tax on
the same raw materials. These raw materials are unique to Countries B and C and
essential to Country A. What is the effect of this set of actions on these countries? -
ANSWER ✅Country A will do more business with Country B.
A company is conducting a legal risk analysis for a country that has a civil law
system. Which statement accurately characterizes this legal system?
It relies on the opinions of those well-trained in law.
It is based on a detailed set of laws that form a code.
It permits judges to interpret the law.
, It is a moral, not a commercial, system. - ANSWER ✅It is based on a detailed set
of laws that form a code.
Which fact should a company opening its operations in the U.S. state of Louisiana
note?
The state follows the canon law system.
The state has a mixed law system.
The state follows a Talmudic law system.
The state follows a customary law system. - ANSWER ✅The state has a mixed
law system.
A car manufacturer purchases raw materials from Country A, manufactures the
product in Country B, and has a sales force in Country C. Which term reflects this
production process that international agreements now enable? - ANSWER ✅Value
chain
A business invests in an assembly plant located near a port in a foreign country.
The business will import parts and raw materials for final assembly as a finished
product, then export these products for international sales. The business receives
tax incentives.
What is the name for the geographic area where these products are assembled? -
ANSWER ✅Export processing zones (EPZs)
A multinational corporation has manufacturing facilities in many Asian countries
due to cheaper labor. Which strategy is the corporation using?
Market expansion
Acquisition of resources
Realignment of capital expenditures
Centralized portfolio management - ANSWER ✅Acquisition of resources
What is the directional nature of contracts between international businesses? -
ANSWER ✅Horizontal contracts with vertical legal structure
A company is reviewing intangible assets that are covered by intellectual property
laws.
Which asset is being reviewed? - ANSWER ✅Copyright
