WGU C211 OA quizzes Questions and Answers (2023) (Verified Answers)

view that claims phenomenon of globalization was initially driven by the desire of Western economies to exploit their power through MNE's - Correct answer-new view that claims globalization is a long-run historical evolution since the dawn of humanity. Says it is nothing new and that it will always exist - Correct answerevolutionary view that claims globalization is swinging from one extreme to another from time to time - Correct answer-pendulum investment in, controlling, and managing value-added activities in other countries - Correct answer-foreign direct investment political view hostile to FDI. believes it is an instrument of imperialism and vehicle for exploitation of domestic resources by foreign capitalists and firms - Correct answerradical suggests that FDI, unrestricted by government intervention, will enable countries to tap into their absolute or comparative advantages by specializing in the production of certain goods and services - Correct answer-free market views FDI as having pros and cons and only approving FDI when its benefits outweigh costs - Correct answer-pragmatic nationalis what benefits exist to a country receiving FDI? - Correct answer-capital inflow, technology spillovers, advanced management know-how, creates jobs what costs exist to a country receiving FDI? - Correct answer-loss of sovereignty, adverse effects on competition, net outflow in the capital account The aggregation of importing and exporting that leads to the country-level trade surplus or deficit. - Correct answer-balance of trade firms with a _____ degree of resource similarity are likely to have similar competitive actions - Correct answer-high a high degree of resource similarity but low market commonality = _______ intensity of rivalry - Correct answer-highest little resource similarity but high market commonality = _____ intensity of rivalry - Correct answer-lowest mercantilism, absolute advantage and comparative advantage belong to what theory of international trade - Correct answer-classical theory of international trade that relies on more realistic product life cycles and first mover advantages - Correct answer-modern under free trade, a nation gains by specializing in economic activities in which it has _____advantage - Correct answer-absolute focuses on the idea that if a country does not have absolute advantage, they can still choose to specialize in the production of one good where it has ______ advantage - Correct answer-comparative comparative advantage and absolute advantage stem from - Correct answer-factor endowments theory that the wealth of the world is fixed and that a nation that imports more and exports less will be richer - Correct answer-mercantilism stage of the product life cycle where production of a new product that commands a price premium will concentrate in the US - Correct answer-new stage of the product life cycle where demand and ability to produce grow in other developed nations - Correct answer-maturing stage of the product life cycle where the previously new product is commoditized and production will now move to low-cost developing nations - Correct answer-standardized comparative advantage may change over time because patterns of ______ change over time - Correct answer-trade theory that suggests that intervention by governments in certain industries can enhance their odds for international success - Correct answer-strategic trade if a company seeks to limit foreign exchange rate exposure in the forward direction, what is the most effective way to do this? - Correct answer-currency hedging exchange rate risk associating with the time delay between entering a contract and settling it - Correct answer-transaction risk forward transaction that protects traders and investors from exposure to fluctuations of the spot rate - Correct answer-hedging a means of spreading out activities in different currency zones in order to offset the currency losses in certain regions through gains in other regions - Correct answerstrategic heding amount of resources committed to entering a foreign market - Correct answer-scale of entry how do institutions reduce uncertainty? - Correct answer-by signaling which conduct is legit and which is not pillar of formal institution, coercive power of government - Correct answer-regulatory pillar of informal institution, the mechanism through which norms influence individual and firm behavior - Correct answer-normative pillar of informal institution, taken for granted values and beliefs that guide behavior - Correct answer-cognitive institutions represented by laws, regulations and rules - Correct answer-formal institutions represented by norms, culture and ethics - Correct answer-informal the necessity of making rational decisions in the absence of complete information - Correct answer-bounded rationality bounded rationality is a position in which view of global business - Correct answerinstitution political system that affects global business with an individuals right to freedom of expression and organization - Correct answer-democracy political system that affects global business with hostility towards business, higher political risk such as nationalism - Correct answer-totalitarianism political system where citizens elect representatives to govern the country on their behalf - Correct answer-democracy political system where one person or party exercises absolute political control over the population - Correct answer-totalitarianism law that uses comprehensive statutes and codes as a primary means to form legal judgements - Correct answer-civil law that is shaped by precedents and traditions from previous judicial decisions - Correct answer-common law that is based on religious teachings - Correct answer-theocratic less confrontational, shorter, less specific form of law - Correct answer-civil common law is ______ flexible than civil law - Correct answer-more the legal right to use an economic resource and to derive income and benefits from it - Correct answer-property right legal rights awarded by government authorities to investors of new products or processes who are given monopoly rights to derive income from inventions - Correct answer-patent exclusive legal rights of authors and publishers to publish and disseminate their work - Correct answer-copyright exclusive legal rights of firms to use specific names, brands and designs to differentiate their products - Correct answer-trademark characterized by the invisible hand of market forces where the government takes a hands off approach - Correct answer-market factors of production should be government owned or state owned and all supply, demand and pricing are planned by the government - Correct answer-command the economic system of most countries - Correct answer-mixed economy a curve that represents a consumers preferences - Correct answer-indifference curve ________ indifference curves are preferred to ______ ones - Correct answer-higher, lower indifference curves are bowed ______ - Correct answer-inward the rate at which a consumer is willing to substitute one good for another - Correct answer-marginal rate of substitution the limit on consumption bundles that a consumer can afford - Correct answer-budget constraint a piece of analysis that shows the combination of goods the consumer can afford given their income and price of goods - Correct answer-budget constraint an increase in income will shift the budget constraint ________ - Correct answeroutward the slope of the indifference curve equals the slope of the - Correct answer-budget constraint the consumer chooses consumption of the two goods so that the marginal rate of substitution equals the - Correct answer-relative price the increase in total cost that results from adding an additional unit of production - Correct answer-marginal cost formula to calculate marginal cost - Correct answer-change in total cost / change in quantity a firm will produce the quantity where MR = MC as long as ________ - Correct answerprice > AVC when price falls below the AVC, what will a firm do? - Correct answer-shut down temporarily someone who has to take the market price of a product and accept it as their own price - Correct answer-price taker the demand curve for a perfectly competitive firm is - Correct answer-horizontal the demand curve for a monopolistic market is - Correct answer-downward sloping where do firms with market power determine the quantity of product/service they will produce? - Correct answer-quantity where MR = MC, quantity where P = MC where will firms with price setting capacity maximize profits? - Correct answerintersection between the marginal cost curve and the marginal revenue curve a market with only a few sellers offering similar or identical products - Correct answeroligopoly a firm is a sole seller of a product with no close substitutes - Correct answer-monopoly many firms sell similar products but not identical. many firms compete for the same customers, free entry and exit - Correct answer-monopolistic competition many buyers and sellers, identical products, free entry and exit, perfect information, price taker - Correct answer-perfectly competitive what may rare, precious, and hard-to-duplicate resources and capabilities lead to for a firm? - Correct answer-sustained comparative advantage company strategies must consider actions by rival firms is a lesson learned from what - Correct answer-prisoners dilemma about oligopoly what prevents oligopolistic firms from behaving like monopolies? - Correct answerantitrust laws oligopolies are best off when producing a ______ quantity of output and charging a price ______ marginal cost - Correct answer-small, above decrease in income _______ demand for normal goods - Correct answer-decreases decrease in income ______ demand for inferior goods - Correct answer-increases increase in income _____ demand for inferior goods - Correct answer-decreases increase in income ______ demand for normal goods - Correct answer-increases good in which people will purchase more of as their income increases - Correct answernormal good good in which people will purchase less of as their income increases - Correct answerinferior good coke and pepsi are examples of - Correct answer-substitutes hot dogs and hot dog buns are examples of - Correct answer-complements normal and inferior goods, complements and substitutes, expectations about the future and tastes and number of buyers influence the position of the - Correct answer-demand curve demand that is greater than one - Correct answer-elastic demand that is less than one - Correct answer-inelastic how is income elasticity measured? - Correct answer-percentage change in quantity demanded / percentage change in income a change in price will cause a large change in the quantity demanded - Correct answerelastic a change in price will not cause a large change in the quantity demanded - Correct answer-inelastic the percentage change in price is equal to the percentage change in quantity demanded - Correct answer-unit-elastic necessities have a _____ income elasticity - Correct answer-small luxuries have a ______ income elasticity - Correct answer-large how the quantity demanded of one good changes in response to a change in the price of another good - Correct answer-cross-price elasticity substitute goods have a ______ cross elasticity - Correct answer-positive complementary goods have a _____ cross elasticity - Correct answer-negative price elasticity of demand equation - Correct answer-% change in quantity demanded / % change in price income elasticity of demand equation - Correct answer-% change in quantity demanded / % change in income cross elasticity of demand equation - Correct answer-% change in quantity demanded of Y / % change in price of X tools the federal reserve has in regards to monetary control - Correct answer-open market operations, discount rates, reserve ratios purchase or sale of US treasury or US government bonds in the open market - Correct answer-open market operations when the fed buys bonds, what happens to the money supply and AD? - Correct answer-increases money supply and shifts AD to the right when the fed sells bonds, what happens to the money supply and AD? - Correct answer-decreases money supply and shifts AD to the left the interest rate on loans that the Fed makes to the bank - Correct answer-discount rate reducing the discount rate does what? - Correct answer-increases money supply, increases AD increasing the discount rate does what? - Correct answer-decreases money supply, decreases AD ratio of money that banks are required to hold whenever an entity deposits money with them - Correct answer-reserve ratio when the reserve ratio is increased, what happens to the money supply and AD - Correct answer-decreases, shifts to the left