WGU C211 OA Global Economics Exam () Questions
and Verified Answers, 100% Guarantee Pass.
SECTION 1: GLOBALIZATION AND INTERNATIONAL BUSINESS (Questions 1-
15)
Question 1
Which political view of foreign direct investment (FDI) is most widely
used by governments in the current international business environment?
A) Radical view
B) Free market view
C) Pragmatic nationalism
D) Protectionism
Answer: C) Pragmatic nationalism
Expert-Verified Explanation:
Pragmatic nationalism is the most widely used political view of FDI in today's
international business environment. This view recognizes that FDI has both
pros and cons and can only be approved when its benefits outweigh costs.
Governments adopting this approach carefully weigh the costs and benefits of
FDI, allowing it when it serves national interests while restricting it when it
doesn't.
,Question 2
Which factors predict the degree of rivalry between a pair of
competitors? (Choose 2)
A) Market commonality
B) Cost structure
C) Resource similarity
D) Industry size
Answer: A) Market commonality and C) Resource similarity
Expert-Verified Explanation:
Market commonality and resource similarity are the two key factors that
predict the degree of rivalry between competitors. Market commonality refers
to the extent to which competitors overlap in the markets they serve, while
resource similarity refers to how comparable their strategic endowments are.
Firms with high market commonality and resource similarity are likely to have
similar competitive actions and intense rivalry.
Question 3
Which factors predict how local firms in emerging economies will
respond to multinational competitors?
A) Competitive assets and industry pressures to globalize
B) Market dominance and market fragmentation
C) Government regulations and trade barriers
D) Labor costs and infrastructure quality
,Answer: A) Competitive assets and industry pressures to globalize
Expert-Verified Explanation:
Local firms in emerging economies respond to multinational competitors based
on two key factors: their competitive assets (strengths and resources) and the
industry pressures to globalize. This framework helps predict whether local
firms will become defenders, contenders, or get acquired by multinationals.
Question 4
During which stage of the product life cycle do sales and profits
gradually increase before seeing more dramatic increases?
A) Introduction
B) Growth
C) Maturity
D) Decline
Answer: A) Introduction
Expert-Verified Explanation:
During the introduction stage of the product life cycle, sales and profits
gradually increase as the product is first brought to market. This is followed by
more dramatic increases during the growth stage. The product life cycle
theory describes how products evolve through introduction, growth, maturity,
and decline stages.
Question 5
Which factor determines the foreign exchange rate of any currency?
, A) Government decree
B) Supply and demand for the currency
C) The country's GDP
D) International trade agreements
Answer: B) Supply and demand for the currency
Expert-Verified Explanation:
The foreign exchange rate of any currency is fundamentally determined by
supply and demand for that currency in the global marketplace. Strong demand
leads to price increases (appreciation), while oversupply results in price drops
(depreciation). This is the same market principle that determines prices for
any commodity.
Question 6
Which risk must a corporation minimize if it is to effectively manage
short-term currency fluctuations?
A) Political risk
B) Operational risk
C) Hedging
D) Translation risk
Answer: C) Hedging
Expert-Verified Explanation:
Hedging is the use of currency derivatives to reduce potential transaction,
translation, and economic risks of currency movement that could lead to
and Verified Answers, 100% Guarantee Pass.
SECTION 1: GLOBALIZATION AND INTERNATIONAL BUSINESS (Questions 1-
15)
Question 1
Which political view of foreign direct investment (FDI) is most widely
used by governments in the current international business environment?
A) Radical view
B) Free market view
C) Pragmatic nationalism
D) Protectionism
Answer: C) Pragmatic nationalism
Expert-Verified Explanation:
Pragmatic nationalism is the most widely used political view of FDI in today's
international business environment. This view recognizes that FDI has both
pros and cons and can only be approved when its benefits outweigh costs.
Governments adopting this approach carefully weigh the costs and benefits of
FDI, allowing it when it serves national interests while restricting it when it
doesn't.
,Question 2
Which factors predict the degree of rivalry between a pair of
competitors? (Choose 2)
A) Market commonality
B) Cost structure
C) Resource similarity
D) Industry size
Answer: A) Market commonality and C) Resource similarity
Expert-Verified Explanation:
Market commonality and resource similarity are the two key factors that
predict the degree of rivalry between competitors. Market commonality refers
to the extent to which competitors overlap in the markets they serve, while
resource similarity refers to how comparable their strategic endowments are.
Firms with high market commonality and resource similarity are likely to have
similar competitive actions and intense rivalry.
Question 3
Which factors predict how local firms in emerging economies will
respond to multinational competitors?
A) Competitive assets and industry pressures to globalize
B) Market dominance and market fragmentation
C) Government regulations and trade barriers
D) Labor costs and infrastructure quality
,Answer: A) Competitive assets and industry pressures to globalize
Expert-Verified Explanation:
Local firms in emerging economies respond to multinational competitors based
on two key factors: their competitive assets (strengths and resources) and the
industry pressures to globalize. This framework helps predict whether local
firms will become defenders, contenders, or get acquired by multinationals.
Question 4
During which stage of the product life cycle do sales and profits
gradually increase before seeing more dramatic increases?
A) Introduction
B) Growth
C) Maturity
D) Decline
Answer: A) Introduction
Expert-Verified Explanation:
During the introduction stage of the product life cycle, sales and profits
gradually increase as the product is first brought to market. This is followed by
more dramatic increases during the growth stage. The product life cycle
theory describes how products evolve through introduction, growth, maturity,
and decline stages.
Question 5
Which factor determines the foreign exchange rate of any currency?
, A) Government decree
B) Supply and demand for the currency
C) The country's GDP
D) International trade agreements
Answer: B) Supply and demand for the currency
Expert-Verified Explanation:
The foreign exchange rate of any currency is fundamentally determined by
supply and demand for that currency in the global marketplace. Strong demand
leads to price increases (appreciation), while oversupply results in price drops
(depreciation). This is the same market principle that determines prices for
any commodity.
Question 6
Which risk must a corporation minimize if it is to effectively manage
short-term currency fluctuations?
A) Political risk
B) Operational risk
C) Hedging
D) Translation risk
Answer: C) Hedging
Expert-Verified Explanation:
Hedging is the use of currency derivatives to reduce potential transaction,
translation, and economic risks of currency movement that could lead to
