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WGU C211 Global Economics for Managers Exam question with solutions
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WGU C211 Global Economics for Managers EXAM
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WGU C211 Global Economics forManagers
Views on Globalization - answerNew, Evolutionary, and Pendulum
"New" view on globalization - answerA force sweeping through the world in recent
times.
"Evolutionary" view on globalization - answerA long-run historical evolution since the
dawn of human history
"Pendulum" view on globalization - answerOne that swings from one extreme to another
from time to time
Foreign Direct Investment - answerDirect investment in, control, and management of
value-added activities in other countries
Political views on FDI - answerRadical View, Free Market View, Pragmatic Nationalism
Benefits to a country receiving FDI - answerCapital Inflow, Technology Spillover,
Advanced Management Know-How, Job creation
Costs to a country receiving FDI - answerLoss of Sovereignty, Adverse effects on
competition,
Capital outflow.
How do resources and capabilities influence the competitive dynamics of a business? -
answerResource similarity and market commonality can yield a powerful framework for
competitor analysis.
Resource similarity - answerThe 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? - answerFirms with a high
degree are likely to have similar competitive actions. (Starbuck's instant coffee &
McDonald's iced coffee)
Classical theories of international trade - answerMercantilism, Absolute advantage, and
Comparative advantage
Modern theory view - answerDynamic
Classical theory view - answerStatic
Absolute advantage - answerThe economic advantage one nation enjoys that is
superior to other nations
Comparative advantage - answerThe advantage one economic activity nation enjoys in
comparison with other nations (relative, not absolute)
Mercantilism - answerA 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? - answerNew, Maturing, and Standardized
Strategic trade - answerIntervention 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? - answerThe
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? - answerMercantilism (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? - answerForward transactions, an act know as
currency hedging.
Transaction risk - answerThe exchange rate risk associated with the time delay
between entering into a contract and settling it.
Hedging - answerA transaction, such as forward transactions, that protects traders and
investors from exposure to the fluctuations of the spot rate.
Currency hedging - answerA way to protect traders and investors from being exposed to
the fluctuations of the spot rate
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