WGU C211 - Global Economics for Managers: (Latest 2026/2027 Update)
International Trade, FDI & Economic Principles | Q&A | Grade A | 100%
Correct (Verified Answers) – WGU Program
Subject: WGU C211 – Global Economics: International Trade, Foreign Direct Investment, Exchange
Rates, Market Structures, Monetary Policy, GDP
Source: Classical & Modern Trade Theories, Institutional Economics, Federal Reserve,
Micro/Macroeconomic Principles
Format: Q&A Guide with Economic Rationale | 100% Verified for MBA & Global Management Exam
Views on Globalization
Correct Answer: New, Evolutionary, and Pendulum
1. The "new" view sees globalization as a recent phenomenon driven by technology and trade
liberalization.
2. The evolutionary view traces globalization back through centuries of human history and trade.
3. The pendulum view recognizes that globalization ebbs and flows over time, with periods of
expansion and contraction.
"New" view on globalization
Correct Answer: A force sweeping through the world in recent times.
1. This perspective emphasizes post-1980s acceleration of cross-border flows.
2. Key drivers: digital technology, reduced transportation costs, trade agreements.
3. Critics note that earlier eras also had significant global integration.
"Evolutionary" view on globalization
Correct Answer: A long-run historical evolution since the dawn of human history
1. Argues globalization began with ancient trade routes (Silk Road).
2. Recognizes multiple waves including colonial-era and post-WWII integration.
3. Emphasizes continuity rather than recent discontinuity.
,"Pendulum" view on globalization
Correct Answer: One that swings from one extreme to another from time to time
1. Recognizes globalization cycles: 1870-1914 (first wave), 1914-1945 (retreat), 1945-2008
(advance).
2. Current period may represent another swing due to protectionist sentiment.
3. Policy choices and shocks influence direction.
Foreign Direct Investment
Correct Answer: Direct investment in, control, and management of value-added activities in other countries
1. FDI involves controlling ownership in a business enterprise in another country.
2. Unlike portfolio investment, FDI implies management control and long-term commitment.
3. Typically exceeds 10% ownership threshold in a foreign firm.
Political views on FDI
Correct Answer: Radical View, Free Market View, Pragmatic Nationalism
1. Radical view sees FDI as exploitation; historically Marxist perspective.
2. Free market view argues FDI benefits all parties through efficiency gains.
3. Pragmatic nationalism balances benefits and costs, using selective intervention.
Benefits to a country receiving FDI
Correct Answer: Capital Inflow, Technology Spillover, Advanced Management Know-How, Job creation
1. Capital inflow finances investment without increasing external debt.
2. Technology spillover improves domestic productivity through demonstration effects.
3. Management know-how transfers best practices; direct jobs raise local incomes.
Costs to a country receiving FDI
Correct Answer: Loss of Sovereignty, Adverse effects on competition, Capital outflow.
1. Loss of sovereignty occurs when foreign firms influence local policies.
2. Adverse competition may crowd out domestic entrepreneurs.
3. Capital outflow through profit repatriation reduces reinvestable domestic funds.
, How do resources and capabilities influence the competitive dynamics of a business?
Correct Answer: Resource similarity and market commonality can yield a powerful framework for
competitor analysis.
1. Resource similarity predicts similar strategic actions between rivals.
2. Market commonality (overlapping markets) increases competitive intensity.
3. Combined framework helps predict competitor responses and industry dynamics.
Resource similarity
Correct Answer: The extent to which a given competitor possesses strategic endowment comparable, in
terms of both type and amount, to those of the focal firm.
1. High resource similarity leads to similar strategic capabilities and constraints.
2. Firms with comparable resources will likely respond similarly to market changes.
3. Resource similarity is a key predictor of competitive rivalry intensity.
How does resource similarity impact competitive dynamics?
Correct Answer: Firms with a high degree are likely to have similar competitive actions. (Starbucks instant
coffee & McDonald's iced coffee)
1. Resource-similar firms perceive each other as primary rivals.
2. Actions in one firm trigger mirrors responses from competitors.
3. The coffee example shows product line expansion mirroring between chains.
Classical theories of international trade
Correct Answer: Mercantilism, Absolute advantage, and Comparative advantage
1. Mercantilism (16th-18th centuries) focused on trade surpluses and gold accumulation.
2. Absolute advantage (Smith) argues nations should produce what they do best.
3. Comparative advantage (Ricardo) shows mutual gains even if one nation is better at
everything.
Modern theory view
Correct Answer: Dynamic
1. Modern trade theories account for economies of scale, product differentiation, and
innovation.
2. Recognize that comparative advantage can be created and shifts over time.
3. Includes new trade theory, Porter's diamond, and product life cycle theory.
International Trade, FDI & Economic Principles | Q&A | Grade A | 100%
Correct (Verified Answers) – WGU Program
Subject: WGU C211 – Global Economics: International Trade, Foreign Direct Investment, Exchange
Rates, Market Structures, Monetary Policy, GDP
Source: Classical & Modern Trade Theories, Institutional Economics, Federal Reserve,
Micro/Macroeconomic Principles
Format: Q&A Guide with Economic Rationale | 100% Verified for MBA & Global Management Exam
Views on Globalization
Correct Answer: New, Evolutionary, and Pendulum
1. The "new" view sees globalization as a recent phenomenon driven by technology and trade
liberalization.
2. The evolutionary view traces globalization back through centuries of human history and trade.
3. The pendulum view recognizes that globalization ebbs and flows over time, with periods of
expansion and contraction.
"New" view on globalization
Correct Answer: A force sweeping through the world in recent times.
1. This perspective emphasizes post-1980s acceleration of cross-border flows.
2. Key drivers: digital technology, reduced transportation costs, trade agreements.
3. Critics note that earlier eras also had significant global integration.
"Evolutionary" view on globalization
Correct Answer: A long-run historical evolution since the dawn of human history
1. Argues globalization began with ancient trade routes (Silk Road).
2. Recognizes multiple waves including colonial-era and post-WWII integration.
3. Emphasizes continuity rather than recent discontinuity.
,"Pendulum" view on globalization
Correct Answer: One that swings from one extreme to another from time to time
1. Recognizes globalization cycles: 1870-1914 (first wave), 1914-1945 (retreat), 1945-2008
(advance).
2. Current period may represent another swing due to protectionist sentiment.
3. Policy choices and shocks influence direction.
Foreign Direct Investment
Correct Answer: Direct investment in, control, and management of value-added activities in other countries
1. FDI involves controlling ownership in a business enterprise in another country.
2. Unlike portfolio investment, FDI implies management control and long-term commitment.
3. Typically exceeds 10% ownership threshold in a foreign firm.
Political views on FDI
Correct Answer: Radical View, Free Market View, Pragmatic Nationalism
1. Radical view sees FDI as exploitation; historically Marxist perspective.
2. Free market view argues FDI benefits all parties through efficiency gains.
3. Pragmatic nationalism balances benefits and costs, using selective intervention.
Benefits to a country receiving FDI
Correct Answer: Capital Inflow, Technology Spillover, Advanced Management Know-How, Job creation
1. Capital inflow finances investment without increasing external debt.
2. Technology spillover improves domestic productivity through demonstration effects.
3. Management know-how transfers best practices; direct jobs raise local incomes.
Costs to a country receiving FDI
Correct Answer: Loss of Sovereignty, Adverse effects on competition, Capital outflow.
1. Loss of sovereignty occurs when foreign firms influence local policies.
2. Adverse competition may crowd out domestic entrepreneurs.
3. Capital outflow through profit repatriation reduces reinvestable domestic funds.
, How do resources and capabilities influence the competitive dynamics of a business?
Correct Answer: Resource similarity and market commonality can yield a powerful framework for
competitor analysis.
1. Resource similarity predicts similar strategic actions between rivals.
2. Market commonality (overlapping markets) increases competitive intensity.
3. Combined framework helps predict competitor responses and industry dynamics.
Resource similarity
Correct Answer: The extent to which a given competitor possesses strategic endowment comparable, in
terms of both type and amount, to those of the focal firm.
1. High resource similarity leads to similar strategic capabilities and constraints.
2. Firms with comparable resources will likely respond similarly to market changes.
3. Resource similarity is a key predictor of competitive rivalry intensity.
How does resource similarity impact competitive dynamics?
Correct Answer: Firms with a high degree are likely to have similar competitive actions. (Starbucks instant
coffee & McDonald's iced coffee)
1. Resource-similar firms perceive each other as primary rivals.
2. Actions in one firm trigger mirrors responses from competitors.
3. The coffee example shows product line expansion mirroring between chains.
Classical theories of international trade
Correct Answer: Mercantilism, Absolute advantage, and Comparative advantage
1. Mercantilism (16th-18th centuries) focused on trade surpluses and gold accumulation.
2. Absolute advantage (Smith) argues nations should produce what they do best.
3. Comparative advantage (Ricardo) shows mutual gains even if one nation is better at
everything.
Modern theory view
Correct Answer: Dynamic
1. Modern trade theories account for economies of scale, product differentiation, and
innovation.
2. Recognize that comparative advantage can be created and shifts over time.
3. Includes new trade theory, Porter's diamond, and product life cycle theory.
