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GLOBAL ECONOMICS EXAM 2024

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WGU C211 GLOBAL ECONOMICS EXAM 2024 | ACCURATE REAL EXAM QUESTIONS WITH A STUDY GUIDE AND KNOWLEDGE CHECK FLASHCARDS | ACCURATE AND VERIFIED FOR GUARANTEED PASS | OA AND PA

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  • July 9, 2024
  • 50
  • 2023/2024
  • Exam (elaborations)
  • Questions & answers

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  • wgu c211
  • global economics
  • real exam questions
  • accurate and verified
  • study guide
  • knowledge check flashcards

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WGU C211 GLOBAL ECONOMICS EXAM 2024 | ACCURATE
REAL EXAM QUESTIONS WITH A STUDY GUIDE AND
KNOWLEDGE CHECK FLASHCARDS | ACCURATE AND
VERIFIED FOR GUARANTEED PASS | OA AND PA
What is resource similarity and how does this impact competitive dynamics? - CORRECT
ANSWER Extent to which a given competitor possesses strategic endownment comparable, in
terms of both type and amount, to those of the focal firm.


Give a description of the classical theory of international trade. - CORRECT ANSWER
Mercantilism, absolute advantage, comparative advantage


How would the modern theory compare to the classical theory? - CORRECT ANSWER Modern
Trade Theories are the major theories of international trade that were advanced in the 20th
century, which consist of (1) product life cycle, (2) strategic trade, and (3) national competitive
advantage of industries instead of relying on simple factor analysis, modern theories rely on
more realistic product life cycles, first-mover advantages, and the "diamond" to explain and
predict patterns of trade.


Compare absolute advantage to comparative advantage. What differences exist? - CORRECT
ANSWER Absolute advantage is the ability of an individual, firm or country to produce more of
a good or service than competitors when using the same amount of resources. (WinWin)
Comparative advantage is the ability of an individual, firm or country to produce a good or
service at a lower opportunity cost than other producers. (Opportunity cost)


What is mercantilism and why is this an important term? - CORRECT ANSWER An economic
theory that advocates government regulation of international trade. It is an important tool in
creating more wealth for by reducing the trade deficit. (Zero-sum WinLose)
Explain the New, Evolutionary, and Pendulum views of Globalization. How do these differ from
one another? - CORRECT ANSWER New globalization is a new force sweeping through the
world in recent times. Pendulum globalization is a pendulum that swings from one extreme to the
the other from time to time. Evolutionary globalization is a long historical evolution since the
dawn of human history.


What is Foreign Direct Investment? - CORRECT ANSWER Investment in controlling and
managing value-added activities in other countries.

,What different political views exist on FDI? - CORRECT ANSWER Radical - hostile to FDI,
roots to Marxism, treates FDI as an instrument of imperialism and as a vehicle for exploitation of
domestic resources by foreign capitalists and firms.
Free Market - suggests that FDI unrestricted by government intervention will enable countries to
tap into their absolute comparative advantages by specializing in the production of certain goods
and services.. win-win logic FDI friendly polices Brazil, China, Hungary, India, Ireland, Russia.
Pragmatic Nationalism - Practiced by most countries. Viewing FDI as having both pros and cons
and only aprroving FDI when its benefits outweigh costs.


What benefits exist to a country receiving FDI? - CORRECT ANSWER Capital inflow - can
help improve a host country's balance of payments
Technology - can create technology spillovers that benefit domestic firms and industries
Advanced managment - know-how may be highly valued.
FDI creates jobs both directly and indirectly. Direct benefits arise when MNEs employ
individuals locally. Indirect benefits include jobs created when local suppliers increase hiring
and when MNE employees spend money locally resulting in more jobs. Repatriated earnings
from profits from FDI. Increased exports of components and services to host countries. Learning
via FDI from operations abroad.


What costs exist to a country receiving FDI? - CORRECT ANSWER -Loss of sovereignty
because of decisions to invest, produce and market products and/or to close plants and lay off
workers in a host country are being made by foreigners.
-Adverse effects on competiton. May drive some domestic firms out of business. Having driven
domestic firms out of business MNE's in theory may be able to monopolize local markets.
-Capital outflow when MNE's make profits in host countries and repatriate (send back) such
earnings to headquarters in home countries, host countries experience a net outflow in the capital
account in their balance of payments.


How do resources and capabilities influence the competitive dynamics of a business? -
CORRECT ANSWER Strong resources and capabilities help to compete and/or cooperate more
effectively.

,What are the critical features of the product life cycle? - CORRECT ANSWER New, maturing
and standartdized
First theory to incorporate dynamic changes in patterns of trade. More realistic with trade in
industrial products in the 20th century.


How would you describe strategic trade? - CORRECT ANSWER A theory that suggests that
stategic 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? - CORRECT ANSWER
The supply of a currency is determined by the domestic demand for imports from abroad.


Which theory came first, mecantilism or modern-day protectionism? - CORRECT ANSWER
Mercantilism


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 Forward Transactions (currency
Hedging)


What is transaction risk? - CORRECT ANSWER The exchange rate risk associated with the
time delay between entering into a contract and settling it.


Explain the concept of "hedging" as it relates to reducing various types of risk. - CORRECT
ANSWER Currency hedging- the practices of protecting traders and investors from exposure to
the fluctuations of the spot rate.
Strategic hedging- spreding out activites in a number of countries in different currency zones to
offset any currency losses in one region through gains in other regions.


What advantages exist with the first mover? - CORRECT ANSWER Benefits that accure to
firms that enter the market first and that late entrants do not enjoy, propriety technological
leadership and preemption of scarce resources.

, What advantages exist with the late mover? - CORRECT ANSWER Benefits that accrue to
firms that enter the market later and that early entrants do not enjoy, opportunity to free ride on
first mover investments and resolution of technological and market uncertainty.


Consider the model of foreign market entries. How is scale-of-entry related/relevant? -
CORRECT ANSWER Equity vs non-equity modes of entry, how much you are willing to
commit to entering the foreign market. Scale of entry is the amount of resources committed to
entering a foreign market.


How do institutions reduce uncertainty? - CORRECT ANSWER Curtail transaction costs and
combating opportunism


Discuss and compare the three pillars (regulatory,normative, and cognitive) - CORRECT
ANSWER Regulatory- the coercive power of governments
Normative- how the values, beliefs and actions of other relevant players known as norms
influence the behavior of local individuals and firms.
Cognitive- refers to the internalized, taken for granted values and beliefs that guide individual
and firm behavior.


Compare formal and informal institutions. - CORRECT ANSWER Formal- Laws,Regulations
and rules (Regulatory)
Informal- Rules are not formalized, values (Normative,Cognitive)


Three legal traditions - CORRECT ANSWER Civil Law- Deived from Roman Law, Oldest,
most influential and most widely used (France, Brazil, China)
Common Law- Shaped by precendents and traditions from previous judicial decisions. English
speaking countries.
(U.S., Canada, Australia)
Theocratic Law- Based on religious teachings. Jewish law and Islamic law
(Iran, Saudi Arabia, UAE)


BRIC - CORRECT ANSWER Brazil, Russia, India, China

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