WGU C211 - Global Economics for Managers, Brian Final: (Latest
2026/2027 Update) Complete Study Guide | Q&A | Grade A | 100%
Correct (Verified Answers) – WGU Program
Subject: WGU C211 – Global Economics: Globalization, FDI, Trade Theories, Exchange Rates, Market
Structures, Monetary/Fiscal Policy, Consumer Theory
Source: Classical & Modern Trade Theories, Federal Reserve, Micro/Macroeconomic Principles,
Institution-Based & Resource-Based Views
Format: Q&A Guide with Economic Rationale | 100% Verified for MBA & Global Management Exam
3 views on globalization
Correct Answer: New, Evolutionary, and Pendulum
1. The "new" view sees globalization as a recent phenomenon driven by technology since 1980s.
2. The evolutionary view traces globalization back through centuries of human history.
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. Emphasizes post-1980s acceleration of cross-border flows.
2. Key drivers include digital technology, reduced transportation costs, and trade agreements.
3. This perspective dominates much popular discussion of globalization.
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: "Evolutionary" view on globalization
1. The evolutionary view traces globalization to colonial-era exploitation by Western powers.
2. MNCs following colonial trade routes spread Western economic influence globally.
3. This view emphasizes historical continuity and power dynamics in globalization.
,"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 like the 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 cyclical pattern: 1870-1914 (globalization), 1914-1945 (retreat), 1945-2008
(advance).
2. Current period may represent another swing toward protectionism.
3. Policy choices and major shocks influence the direction of the pendulum.
Most popular
Correct Answer: (contextual - refers to pendulum view as most accepted among economists)
1. Many economists accept the pendulum view as most historically accurate.
2. Recognizes that globalization is not inevitable or irreversible.
3. Accounts for both periods of integration and fragmentation.
Foreign Direct Investment (FDI)
Correct Answer: Foreign direct investments (FDI) are investments made by one company into another
company that is located in another country.
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.
3 Different political views on FDI
Correct Answer: Radical (hostile), Free Market (win-win), Pragmatic Nationalism (weigh costs/benefits)
1. Radical view sees FDI as exploitation of host countries by MNCs.
2. Free market view argues FDI benefits both home and host countries through efficiency gains.
3. Pragmatic nationalism weighs benefits and costs; most countries practice some version of this.
, What are the benefits to a country receiving Foreign Direct Investment?
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.
What costs exist in a country when they receive Foreign Direct Investment?
Correct Answer: 1. Loss of Sovereignty (power), 2. Adverse effects on competition (drives domestic firms
out), 3. Capital outflow
1. Loss of sovereignty occurs when foreign firms influence local policies via lobbying or threats
to leave.
2. Adverse competition may crowd out domestic entrepreneurs and small businesses.
3. Capital outflow through profit repatriation reduces reinvestable domestic funds.
How do resources and capabilities influence the competitive dynamics of a business?
Correct Answer: A firm's resources and capabilities must create value compared to its competition. Value,
Rarity, Imitability, Organization (VRIO framework)
1. Resources must create value compared to competitors.
2. Rarity: the more rare and desired, the greater the advantage.
3. Imitability: difficult-to-copy resources sustain advantage.
4. Organization: ability to exploit resources effectively.
How does resource similarity impact competitive dynamics?
Correct Answer: Firms with a high degree of similarity are likely to make similar competitive decisions.
(Starbucks & McDonald's example)
1. Resource-similar firms perceive each other as primary rivals.
2. Actions in one firm trigger mirror responses from competitors.
3. If one increases price due to shortage, the other likely will also.
What is the classical theory view of international trade regarding change?
Correct Answer: Static, not changing
1. Classical theories assume constant returns to scale and fixed technology.
2. Do not account for learning curves or productivity improvements over time.
3. Provide foundation but are limited for explaining modern intra-industry trade.
2026/2027 Update) Complete Study Guide | Q&A | Grade A | 100%
Correct (Verified Answers) – WGU Program
Subject: WGU C211 – Global Economics: Globalization, FDI, Trade Theories, Exchange Rates, Market
Structures, Monetary/Fiscal Policy, Consumer Theory
Source: Classical & Modern Trade Theories, Federal Reserve, Micro/Macroeconomic Principles,
Institution-Based & Resource-Based Views
Format: Q&A Guide with Economic Rationale | 100% Verified for MBA & Global Management Exam
3 views on globalization
Correct Answer: New, Evolutionary, and Pendulum
1. The "new" view sees globalization as a recent phenomenon driven by technology since 1980s.
2. The evolutionary view traces globalization back through centuries of human history.
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. Emphasizes post-1980s acceleration of cross-border flows.
2. Key drivers include digital technology, reduced transportation costs, and trade agreements.
3. This perspective dominates much popular discussion of globalization.
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: "Evolutionary" view on globalization
1. The evolutionary view traces globalization to colonial-era exploitation by Western powers.
2. MNCs following colonial trade routes spread Western economic influence globally.
3. This view emphasizes historical continuity and power dynamics in globalization.
,"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 like the 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 cyclical pattern: 1870-1914 (globalization), 1914-1945 (retreat), 1945-2008
(advance).
2. Current period may represent another swing toward protectionism.
3. Policy choices and major shocks influence the direction of the pendulum.
Most popular
Correct Answer: (contextual - refers to pendulum view as most accepted among economists)
1. Many economists accept the pendulum view as most historically accurate.
2. Recognizes that globalization is not inevitable or irreversible.
3. Accounts for both periods of integration and fragmentation.
Foreign Direct Investment (FDI)
Correct Answer: Foreign direct investments (FDI) are investments made by one company into another
company that is located in another country.
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.
3 Different political views on FDI
Correct Answer: Radical (hostile), Free Market (win-win), Pragmatic Nationalism (weigh costs/benefits)
1. Radical view sees FDI as exploitation of host countries by MNCs.
2. Free market view argues FDI benefits both home and host countries through efficiency gains.
3. Pragmatic nationalism weighs benefits and costs; most countries practice some version of this.
, What are the benefits to a country receiving Foreign Direct Investment?
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.
What costs exist in a country when they receive Foreign Direct Investment?
Correct Answer: 1. Loss of Sovereignty (power), 2. Adverse effects on competition (drives domestic firms
out), 3. Capital outflow
1. Loss of sovereignty occurs when foreign firms influence local policies via lobbying or threats
to leave.
2. Adverse competition may crowd out domestic entrepreneurs and small businesses.
3. Capital outflow through profit repatriation reduces reinvestable domestic funds.
How do resources and capabilities influence the competitive dynamics of a business?
Correct Answer: A firm's resources and capabilities must create value compared to its competition. Value,
Rarity, Imitability, Organization (VRIO framework)
1. Resources must create value compared to competitors.
2. Rarity: the more rare and desired, the greater the advantage.
3. Imitability: difficult-to-copy resources sustain advantage.
4. Organization: ability to exploit resources effectively.
How does resource similarity impact competitive dynamics?
Correct Answer: Firms with a high degree of similarity are likely to make similar competitive decisions.
(Starbucks & McDonald's example)
1. Resource-similar firms perceive each other as primary rivals.
2. Actions in one firm trigger mirror responses from competitors.
3. If one increases price due to shortage, the other likely will also.
What is the classical theory view of international trade regarding change?
Correct Answer: Static, not changing
1. Classical theories assume constant returns to scale and fixed technology.
2. Do not account for learning curves or productivity improvements over time.
3. Provide foundation but are limited for explaining modern intra-industry trade.
