WGU C211 Global Economics for Managers (UZC2): Pre-Assessment
(Latest 2026/2027 Update) | Q&A | Grade A | 100% Correct (Verified
Answers) – WGU
Subject: Global Economics for Managers – International Trade, FDI, Exchange Rates, Market
Structures, Monetary/Fiscal Policy, GDP, Trade Barriers, Institutional Theory
Source: WGU C211 Pre-Assessment (UZC2) / Global Economics for Managers Blueprint
Format: Q&A Guide with Economic Rationale | 100% Verified
1: Which view claims that the phenomenon of globalization was initially driven by the
desire of Western economies to exploit their power through multinational enterprises?
Correct Answer: The new-force view
1. New-force view sees globalization as driven by powerful Western economies and MNEs
exploiting global markets.
2. Contrasts with the evolutionary view that globalization is a natural historical process.
2: Economic gains come from international trade because one country's exported goods,
services, or other items are unique, valuable, and difficult to duplicate to the importing
countries.
Correct Answer: Resource-based view
1. Resource-based view (RBV) emphasizes unique, valuable, and hard-to-imitate resources as
sources of competitive advantage.
2. In international trade, unique products command economic rents.
3: What is the aggregation of importing and exporting that leads to the country-level
trade surplus or deficit?
Correct Answer: Balance of trade
1. Balance of trade = value of exports minus value of imports.
2. Surplus = exports > imports; deficit = imports > exports.
4: What is a cost of foreign direct investment?
Correct Answer: Developing countries may be exploited by multinational enterprises (MNE).
1. FDI costs include potential exploitation of host country resources and labor.
2. MNEs may exert undue influence on local politics and economy.
5: What may precious, rare, and hard-to-duplicate resources and capabilities lead to for a
firm?
Correct Answer: Sustained comparative advantage
1. VRIN resources (Valuable, Rare, Inimitable, Non-substitutable) generate sustained competitive
advantage.
2. Core concept of resource-based view (RBV).
, 6: Which theory states that patterns of international trade change across new, maturing,
and standardized stages?
Correct Answer: Product life cycle theory
1. Raymond Vernon's product life cycle theory: new products introduced in developed countries,
then mature and standardize.
2. Production shifts to lower-cost locations as product matures.
7: What is the financial environment in which exchange rates and payments for goods and
services are conducted?
Correct Answer: International monetary system
1. International monetary system includes exchange rate regimes, payment systems, and global
financial institutions (IMF, World Bank).
2. Facilitates cross-border trade and finance.
8: What happens to a country's real exchange rate and nominal interest rate as the price
level increases, assuming all other factors are unchanged?
Correct Answer: Exchange rates fall and interest rates rise.
1. Higher price level → higher inflation → currency depreciation (exchange rate falls).
2. Central bank raises nominal interest rates to combat inflation.
9: What is the easiest method nonfinancial companies use to handle currency fluctuations?
Correct Answer: Currency diversification
1. Currency diversification means holding revenues/expenses in multiple currencies to hedge risk.
2. Simpler than complex derivatives for non-financial firms.
10: Which strategy minimizes the risk of unanticipated changes in future exchange rates?
Correct Answer: Currency swap
1. Currency swap exchanges principal and interest payments in one currency for another.
2. Locks in exchange rates for future transactions, hedging risk.
11: A company is looking for a location with an abundance of ground-breaking
individuals, firms, and universities. Which type of strategic goal is this company
demonstrating?
Correct Answer: Innovation-seeking
1. Innovation-seeking FDI targets locations with strong R&D, talent, and knowledge clusters (e.g.,
Silicon Valley).
2. Seeks strategic assets and technology spillovers.
12: What advantage comes with not sharing benefits with late entrants?
Correct Answer: First-mover advantage
1. First-mover advantages include brand recognition, customer loyalty, and cost advantages from
experience curve.
2. Late entrants must overcome incumbent advantages.
(Latest 2026/2027 Update) | Q&A | Grade A | 100% Correct (Verified
Answers) – WGU
Subject: Global Economics for Managers – International Trade, FDI, Exchange Rates, Market
Structures, Monetary/Fiscal Policy, GDP, Trade Barriers, Institutional Theory
Source: WGU C211 Pre-Assessment (UZC2) / Global Economics for Managers Blueprint
Format: Q&A Guide with Economic Rationale | 100% Verified
1: Which view claims that the phenomenon of globalization was initially driven by the
desire of Western economies to exploit their power through multinational enterprises?
Correct Answer: The new-force view
1. New-force view sees globalization as driven by powerful Western economies and MNEs
exploiting global markets.
2. Contrasts with the evolutionary view that globalization is a natural historical process.
2: Economic gains come from international trade because one country's exported goods,
services, or other items are unique, valuable, and difficult to duplicate to the importing
countries.
Correct Answer: Resource-based view
1. Resource-based view (RBV) emphasizes unique, valuable, and hard-to-imitate resources as
sources of competitive advantage.
2. In international trade, unique products command economic rents.
3: What is the aggregation of importing and exporting that leads to the country-level
trade surplus or deficit?
Correct Answer: Balance of trade
1. Balance of trade = value of exports minus value of imports.
2. Surplus = exports > imports; deficit = imports > exports.
4: What is a cost of foreign direct investment?
Correct Answer: Developing countries may be exploited by multinational enterprises (MNE).
1. FDI costs include potential exploitation of host country resources and labor.
2. MNEs may exert undue influence on local politics and economy.
5: What may precious, rare, and hard-to-duplicate resources and capabilities lead to for a
firm?
Correct Answer: Sustained comparative advantage
1. VRIN resources (Valuable, Rare, Inimitable, Non-substitutable) generate sustained competitive
advantage.
2. Core concept of resource-based view (RBV).
, 6: Which theory states that patterns of international trade change across new, maturing,
and standardized stages?
Correct Answer: Product life cycle theory
1. Raymond Vernon's product life cycle theory: new products introduced in developed countries,
then mature and standardize.
2. Production shifts to lower-cost locations as product matures.
7: What is the financial environment in which exchange rates and payments for goods and
services are conducted?
Correct Answer: International monetary system
1. International monetary system includes exchange rate regimes, payment systems, and global
financial institutions (IMF, World Bank).
2. Facilitates cross-border trade and finance.
8: What happens to a country's real exchange rate and nominal interest rate as the price
level increases, assuming all other factors are unchanged?
Correct Answer: Exchange rates fall and interest rates rise.
1. Higher price level → higher inflation → currency depreciation (exchange rate falls).
2. Central bank raises nominal interest rates to combat inflation.
9: What is the easiest method nonfinancial companies use to handle currency fluctuations?
Correct Answer: Currency diversification
1. Currency diversification means holding revenues/expenses in multiple currencies to hedge risk.
2. Simpler than complex derivatives for non-financial firms.
10: Which strategy minimizes the risk of unanticipated changes in future exchange rates?
Correct Answer: Currency swap
1. Currency swap exchanges principal and interest payments in one currency for another.
2. Locks in exchange rates for future transactions, hedging risk.
11: A company is looking for a location with an abundance of ground-breaking
individuals, firms, and universities. Which type of strategic goal is this company
demonstrating?
Correct Answer: Innovation-seeking
1. Innovation-seeking FDI targets locations with strong R&D, talent, and knowledge clusters (e.g.,
Silicon Valley).
2. Seeks strategic assets and technology spillovers.
12: What advantage comes with not sharing benefits with late entrants?
Correct Answer: First-mover advantage
1. First-mover advantages include brand recognition, customer loyalty, and cost advantages from
experience curve.
2. Late entrants must overcome incumbent advantages.
