WGU C211 GLOBAL ECONOMICS FOR
MANAGERS EXAM QUESTIONS AND
ANSWERS TESTED AND GRADED A+
How are supply and demand related to the exchange rate of a country? -
correct answer ✅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? - correct answer ✅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? - correct answer
✅Forward transactions, an act know as currency hedging.
Transaction risk - correct answer ✅The exchange rate risk associated with
the time delay between entering into a contract and settling it.
1
,Hedging - correct answer ✅A transaction, such as forward transactions,
that protects traders and investors from exposure to the fluctuations of the
spot rate.
Currency hedging - correct answer ✅A way to protect traders and investors
from being exposed to the fluctuations of the spot rate
Strategic hedging - correct answer ✅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)
First mover advantages - correct answer ✅Proprietary, technological
leadership, pre-emption of scarce resources, establishment of entry barriers to
late entrants, avoidance of clash with dominant firms at home, relationships
with key stakeholders, (such as governments.)
2
, Late mover advantages - correct answer ✅Opportunity to free ride on first-
mover investments, Resolution of technological and market uncertainty, First
mover's difficulty to adapt to market changes.)
Foreign market entries types - correct answer ✅Non-equity and equity
Non-equity - correct answer ✅Reflects relatively smaller commitments to
overseas markets. Determines firms MNE status.
Views on Globalization - correct answer ✅New, Evolutionary, and
Pendulum
"New" view on globalization - correct answer ✅A force sweeping through
the world in recent times.
"Evolutionary" view on globalization - correct answer ✅A long-run
historical evolution since the dawn of human history
3
MANAGERS EXAM QUESTIONS AND
ANSWERS TESTED AND GRADED A+
How are supply and demand related to the exchange rate of a country? -
correct answer ✅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? - correct answer ✅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? - correct answer
✅Forward transactions, an act know as currency hedging.
Transaction risk - correct answer ✅The exchange rate risk associated with
the time delay between entering into a contract and settling it.
1
,Hedging - correct answer ✅A transaction, such as forward transactions,
that protects traders and investors from exposure to the fluctuations of the
spot rate.
Currency hedging - correct answer ✅A way to protect traders and investors
from being exposed to the fluctuations of the spot rate
Strategic hedging - correct answer ✅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)
First mover advantages - correct answer ✅Proprietary, technological
leadership, pre-emption of scarce resources, establishment of entry barriers to
late entrants, avoidance of clash with dominant firms at home, relationships
with key stakeholders, (such as governments.)
2
, Late mover advantages - correct answer ✅Opportunity to free ride on first-
mover investments, Resolution of technological and market uncertainty, First
mover's difficulty to adapt to market changes.)
Foreign market entries types - correct answer ✅Non-equity and equity
Non-equity - correct answer ✅Reflects relatively smaller commitments to
overseas markets. Determines firms MNE status.
Views on Globalization - correct answer ✅New, Evolutionary, and
Pendulum
"New" view on globalization - correct answer ✅A force sweeping through
the world in recent times.
"Evolutionary" view on globalization - correct answer ✅A long-run
historical evolution since the dawn of human history
3
