WGU C211 GLOBAL ECONOMICS FOR MANAGERS FINAL EXAM Questions and Answers (2024/2025) (Verified Answers)(A+)
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WGU C211
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WGU C211
WGU C211 GLOBAL ECONOMICS FOR
MANAGERS FINAL EXAM Questions and Answers (2024/2025) (Verified Answers)(A+)
3 views on globalization - ACCURATE ANS-Globalization is when you do business internationally
New, Evolutionary, and Pendulum
"New" view on globalization - ACCURATE ANS-A for...
WGU C211 GLOBAL ECONOMICS FOR
MANAGERS FINAL EXAM Questions and
Answers (2024/2025) (Verified Answers)(A+)
3 views on globalization - ACCURATE ANS-Globalization is when you do business
internationally
New, Evolutionary, and Pendulum
"New" view on globalization - ACCURATE ANS-A force sweeping through the world in
recent times.
Which view claims that the phenomenon of globalization was initially driven by the
desire of Western economies to exploit their power through multinational enterprises?
"Evolutionary" view on globalization - ACCURATE ANS-A long-run historical evolution
since the dawn of human history
"Pendulum" view on globalization - ACCURATE ANS-One that swings from one extreme
to another from time to time.
Most popular
Foreign Direct Investment (FDI) - ACCURATE ANS-Foreign direct investments (FDI)
are investments made by one company into another company that is located in another
country.
3 Different political views on FDI - ACCURATE ANS-Radical - radical view is hostile to
FDI
Free market - free market view calls for minimum or unrestricted government restriction
in FDI. Leads to a win-win situation for both home and host countries.
Pragmatic nationalism - most countries practice pragmatic nationalism, weighing the
benefits and costs of FDI and only using it when benefits outweigh the costs.
What are the benefits to a country receiving Foreign Direct Investment? -
ACCURATE ANS-Capital Inflow
Technology Spillover
Advanced Management Know-How
,Job creation
What costs exist in a country when they receive Foreign Direct Investment? -
ACCURATE ANS-1. Loss of Sovereignty (power),
,2. Adverse effects on competition (drives domestic firms out of business)
3. Capital outflow
How do resources and capabilities influence the competitive dynamics of a business? -
ACCURATE ANS-A firm's resources and capabilities must create value compared to its
competition.
A firms resources need to bring:
Value, company resources must create value, patents are an example.
Rarity, the rarer, and more desired the more of an advantage it has.
Imitability, how easy is it to imitate your competition?
Organization, some companies are better at answering challenges from competitors.
Classical theories of international trade* - ACCURATE ANS-The major theories of
international trade that were advanced before the 20th century, they consist of:
Classic Theory says things don't change, they are static.
How does resource similarity impact competitive dynamics? - ACCURATE ANS- Firms
with a high degree of similarity are likely to make similar competitive decisions.
(Starbuck's instant coffee & McDonald's iced coffee, if one increases the price because
of a coffee shortage the other will likely also)
What are modern trade theories of international trade? - ACCURATE ANS-Modern
theories account for changes in patterns over time whereas classical theories are static.
Modern theories include
(1) Product life cycles,
(2) Strategic trade
(3) National competitive advantage or "Diamond"
What is the classical theory view of international trade regarding change? -
ACCURATE ANS-Static, not changing
What is absolute advantage? - ACCURATE ANS-The economic advantage one nation
enjoys that is superior to other nations, which nation is best at producing a particular
good?
, Trade can be a win/win
Absolute advantage is achieved when one producer is able to produce a competitive
product using fewer resources, or the same resources in less time.
For example, Smith argued that because of better soil, water, and weather, Portugal
enjoyed an absolute advantage over England in the production of grapes and wines.
And England enjoyed an absolute advantage over Portugal as England produced more
wool. If they trade, they would both benefit. international trade is not a zero-sum game
as suggested by mercantilism. It is a win-win game. there are net gains from trade
based on absolute advantage.
Comparative advantage - ACCURATE ANS-The ability of an individual or group to carry
out a particular economic activity (such as making a specific product) more efficiently
than another activity.
Comparative advantage is an economy's ability to produce a particular good or service
at a lower opportunity cost than its trading partners.
Hypothetically, say that Michael Jordan could paint his house in eight hours. In those
same eight hours, though, he could also take part in the filming of a television
commercial which would earn him $50,000. By contrast, Jordan's neighbor Joe could
paint the house in 10 hours. In that same period of time, he could work at a fast-food
restaurant and earn $100.
In this example, Joe has a comparative advantage, even though Michael Jordan could
paint the house faster and better. The best trade would be for Michael Jordan to film a
television commercial and pay Joe to paint his house. So long as Michael Jordan makes
the expected $50,000 and Joe earns more than $100, the trade is a winner. Owing to
their diversity of skills, Michael Jordan and Joe would likely find this to be the best
arrangement for their mutual benefit.
What is mercantilism? - ACCURATE ANS-It is the first recorded theory.
A theory that suggests that the wealth of the world (gold/sliver) is fixed and that a nation
that exports more and imports less will be richer.
Mercantilism trade theory states that viewed international trade as a zero-sum game. A
nation becomes richer by exporting more than it imports.
Features of the product life cycle? - ACCURATE ANS-The first dynamic theory.
New: production of a new product (such as a TV) that commands a price premium will
concentrate in the United States, which exports to other developed nations.
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