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WGU C211 Study Guide Questions With Complete Verified Solutions.
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WGU C211 Study Guide Questions With Complete Verified Solutions.
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WGU C211WGU C211 Study Guide Questions With
Complete Verified Solutions.
What is Foreign Direct Investment? - ✔✔✔ - is direct investment in, control, and management
of value-added activities in other countries.
What different political views exist on FDI? - ✔✔✔ - Radical, Free Market, and Pragramatic
Nationalism
What benefits exist to a country receiving FDI? - ✔✔✔ - Capital inflow, Technology,
management, job creation
What costs exist to a country receiving FDI? - ✔✔✔ - Loss of sovereignty, adverse effects on
competition, and capital outflow
How do resources and capabilities influence the competitive dynamics of a business? - ✔✔✔ -
Value, rarity, imitibility, and organization (VRIO)
Globalization new view - ✔✔✔ - A new force sweeping through the world in recent times
Evolutionary globalization view - ✔✔✔ - 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
WGU C211 Page 1
,WGU C211
What is resource similarity and how does this impact competitive dynamics? - ✔✔✔ - The
degree to which two firms with similar resources are likely to have competitive actions. ie:
market commonality
Give a description of the classical theory of international trade. - ✔✔✔ - The major theories
typically studied consist of mercantilism, absolute advantage, and comparative advantage
How would the modern theory compare to the classical theory? - ✔✔✔ - the major theories
typically studied consist of product life cycle, strategic trade, and national competitive
advantage.
Absolute advantage - ✔✔✔ - involves being more efficient than anyone else in the production
of any good or service
comparative advantage - ✔✔✔ - is the relative (not absolute) advantage in one absolute
activity that one nation enjoys in comparison with other nations
Mercantilism - ✔✔✔ - Classical trade theory that viewed international trade as a zero-sum
game
What are the critical features of the product life cycle? - ✔✔✔ - An economic theory that
accounts for changes in the patterns of trade over time
How would you describe strategic trade? - ✔✔✔ - A theory that suggests that strategic
intervention by governments in certain industries can enhance their odds for international
success
WGU C211 Page 2
, WGU C211
How are supply and demand related to the exchange rate of a country? - ✔✔✔ - Exchange
rates rise and fall based on the underlying economic conditions that prompt traders, investors
and others to want more of a particular currency.
Which theory came first, mercantilism or modern-day protectionism? - ✔✔✔ - Mercantilism: As
protectionism is the idea that governments should protect domestic industries from imports &
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? - ✔✔✔ - This can be accomplished by hedging
Explain the concept of "hedging" as it relates to reducing various types of risk. - ✔✔✔ -
Strategies or Tools used =Hedging
Risk associated with =Transaction risks
They use hedging to minimize transaction risks
What is transaction risk? - ✔✔✔ - The Risk that a company will incur losses due to an adverse
change in the relevant foreign exchange rate
Strategic hedging - ✔✔✔ - spreading out actives in a number of different currency zones to
offset any currency losses in one region through gains in another region.
currency hedging - ✔✔✔ - A transaction that protects traders and investors from exposure to
the fluctuations of the spot rate.
What advantages exist with first mover? - ✔✔✔ - 1-They gain advantage through proprietary
technology
2-They make pre-emptive investments
WGU C211 Page 3
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