WGU C211 Global Economics For Managers Exam
Questions And Answers 2022 (Verified Answers)
Views on Globalization - New, Evolutionary, and Pendulum
"New" view on globalization - A force sweeping through the world in recent times.
"Evolutionary" view on globalization - A long-run historical evolution since the dawn of human history
"Pendulum" view on globalization - One that swings from one extreme to another from time to time
Foreign Direct Investment - Direct investment in, control, and management of value-added activities in
other countries
Political views on FDI - Radical View, Free Market View, Pragmatic Nationalism
Benefits to a country receiving FDI - Capital Inflow, Technology Spillover, Advanced Management Know-
How, Job creation
Costs to a country receiving FDI - Loss of Sovereignty, Adverse effects on competition,
Capital outflow.
How do resources and capabilities influence the competitive dynamics of a business? - Resource
similarity and market commonality can yield a powerful framework for competitor analysis.
Resource similarity - The extent to which a given competitor possesses strategic endowment
comparable, in terms of both type and amount, to those of the focal firm.
How does resource similarity impact competitive dynamics? - Firms with a high degree are likely to have
similar competitive actions. (Starbuck's instant coffee & McDonald's iced coffee)
, Classical theories of international trade - Mercantilism, Absolute advantage, and Comparative advantage
Modern theory view - Dynamic
Classical theory view - Static
Absolute advantage - The economic advantage one nation enjoys that is superior to other nations
Comparative advantage - The advantage one economic activity nation enjoys in comparison with other
nations (relative, not absolute)
Mercantilism - A theory that suggests that the wealth of the world is fixed and that a nation that exports
more and imports less will be richer.
Features of the product life cycle? - New, Maturing, and Standardized
Strategic trade - Intervention by governments in certain industries can enhance their odds for
international success.
How are supply and demand related to the exchange rate of a country? - The price of a commodity, a
country's currency, is fundamentally determined by this. Strong demand leads to price hikes; oversupply
results in price drops.
Which theory came first? - Mercantilism (although both are of the idea that governments should actively
protect domestic industries from imports and vigorously promote exports)
If a company seeks to limit foreign exchange rate exposure in the forward direction, what is the most
effective way to do this? - Forward transactions, an act know as currency hedging.
Transaction risk - The exchange rate risk associated with the time delay between entering into a contract
and settling it.
Questions And Answers 2022 (Verified Answers)
Views on Globalization - New, Evolutionary, and Pendulum
"New" view on globalization - A force sweeping through the world in recent times.
"Evolutionary" view on globalization - A long-run historical evolution since the dawn of human history
"Pendulum" view on globalization - One that swings from one extreme to another from time to time
Foreign Direct Investment - Direct investment in, control, and management of value-added activities in
other countries
Political views on FDI - Radical View, Free Market View, Pragmatic Nationalism
Benefits to a country receiving FDI - Capital Inflow, Technology Spillover, Advanced Management Know-
How, Job creation
Costs to a country receiving FDI - Loss of Sovereignty, Adverse effects on competition,
Capital outflow.
How do resources and capabilities influence the competitive dynamics of a business? - Resource
similarity and market commonality can yield a powerful framework for competitor analysis.
Resource similarity - The extent to which a given competitor possesses strategic endowment
comparable, in terms of both type and amount, to those of the focal firm.
How does resource similarity impact competitive dynamics? - Firms with a high degree are likely to have
similar competitive actions. (Starbuck's instant coffee & McDonald's iced coffee)
, Classical theories of international trade - Mercantilism, Absolute advantage, and Comparative advantage
Modern theory view - Dynamic
Classical theory view - Static
Absolute advantage - The economic advantage one nation enjoys that is superior to other nations
Comparative advantage - The advantage one economic activity nation enjoys in comparison with other
nations (relative, not absolute)
Mercantilism - A theory that suggests that the wealth of the world is fixed and that a nation that exports
more and imports less will be richer.
Features of the product life cycle? - New, Maturing, and Standardized
Strategic trade - Intervention by governments in certain industries can enhance their odds for
international success.
How are supply and demand related to the exchange rate of a country? - The price of a commodity, a
country's currency, is fundamentally determined by this. Strong demand leads to price hikes; oversupply
results in price drops.
Which theory came first? - Mercantilism (although both are of the idea that governments should actively
protect domestic industries from imports and vigorously promote exports)
If a company seeks to limit foreign exchange rate exposure in the forward direction, what is the most
effective way to do this? - Forward transactions, an act know as currency hedging.
Transaction risk - The exchange rate risk associated with the time delay between entering into a contract
and settling it.
