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WGU C211 Global Economics For Managers.
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WGU C211 Global Economics For Managers.
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WGU C211WGU C211 Global Economics For
Managers.
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.
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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.
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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.
Hedging - ✔✔✔ - A transaction, such as forward transactions, that protects traders and
investors from exposure to the fluctuations of the spot rate.
Currency hedging - ✔✔✔ - A way to protect traders and investors from being exposed to the
fluctuations of the spot rate
Strategic 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 (currency
diversification)
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