C211 Global Economics for Managers - WGU Pre-Assessment & Retake:
(Latest 2026/2027 Update) International Business | Q&A | Grade A |
100% Correct (Verified Answers) – WGU Program
Subject: C211 – Global Economics for Managers / International Business
Source: WGU Pre-Assessment, OA Retake Sections, and Economics Review
Format: Q&A Guide with Rationale | All Questions Exhausted
Total questions: 110+ (every question from raw data)
1: How does the resource-based view of global business differ from the institution-based
view?
Correct Answer: Focuses on the internal strengths of the firm.
1. Resource-based view (RBV) emphasizes firm-specific resources and capabilities (VRIO: valuable, rare, inimitable,
organized).
2. Institution-based view focuses on external formal (laws, regulations) and informal (culture, norms) constraints.
3. RBV asks "What do we have?" while institution-based view asks "What rules apply?"
2: According to the "pendulum view" perspective, what is true about globalization?
Correct Answer: Globalization is not a one-directional phenomenon.
1. Pendulum view sees globalization as swinging between integration and isolation over time, not a linear progression.
2. Historical periods: pre-WWI globalization, interwar isolation, post-WWII integration.
3. This view rejects the idea that globalization always increases.
3: Which view of globalization suggests that globalization is neither recent nor one-
directional?
Correct Answer: Pendulum view.
1. Pendulum view emphasizes cyclical patterns rather than linear progression.
2. Globalization has ebbed and flowed throughout history.
3. Contrasts with "new-force view" (recent phenomenon) and "long-run historical view" (continuous evolution since
dawn of humanity).
4: What is true about semiglobalization?
Correct Answer: It is a type of globalization that lies between total isolation and total globalization.
1. Semiglobalization recognizes that most economic activity is neither purely local nor purely global.
2. International business operates in a zone where both local and global forces matter.
3. Reflects reality: cross-border integration is incomplete and varies by industry/activity.
5: Globalization can be viewed as:
Correct Answer: A new force sweeping the world in recent times, a long-run historical evolution since the dawn of human
history, and a pendulum that swings from one extreme to another.
1. Three views: new-force (recent phenomenon), long-run historical (continuous evolution), pendulum (cyclical).
2. Each offers different insights; managers should consider multiple perspectives.
3. Debate among scholars reflects complexity of the globalization concept.
,6: Name the three views of globalization.
Correct Answer: A recent force, a long-running evolution, and a pendulum.
1. Recent force view: globalization post-1980s (technology, trade liberalization).
2. Long-running evolution view: globalization since ancient times (Silk Road, colonial expansion).
3. Pendulum view: globalization swings between extremes over time.
7: Which theory viewed international trade as a zero-sum game?
Correct Answer: Mercantilism.
1. Mercantilism (16th-18th century) believed world wealth was fixed; one nation's gain was another's loss.
2. Advocated maximizing exports and minimizing imports through tariffs and subsidies.
3. Classical economists (Smith, Ricardo) proved trade is not zero-sum.
8: Which principle advocated that governments should actively protect domestic
industries from imports and vigorously promote exports?
Correct Answer: Protectionism.
1. Protectionism uses tariffs, quotas, subsidies to shield domestic industries.
2. Similar to mercantilism in advocating government intervention.
3. Contrasts with free trade ideology of minimal government involvement.
9: Which of the following is a modern trade theory?
Correct Answer: National competitive advantage (Porter's Diamond).
1. Modern trade theories: product life cycle theory, strategic trade theory, Porter's diamond (national competitive
advantage).
2. Porter's diamond includes factor conditions, demand conditions, related/supporting industries, firm strategy/rivalry.
3. Explains why certain nations are home to competitive industries.
10: Which theory assumes the wealth of the world is fixed?
Correct Answer: Mercantilism.
1. Zero-sum assumption is fundamental to mercantilism.
2. Led to policies of hoarding gold/silver and trade surpluses.
3. Adam Smith's absolute advantage and Ricardo's comparative advantage disproved this assumption.
11: Import quotas are a type of:
Correct Answer: Tariff barrier.
1. Import quota is a non-tariff barrier (NTB), not a tariff barrier (question phrasing indicates answer as tariff barrier but
note: quotas are NTBs).
2. Tariff barriers are taxes on imports; non-tariff barriers include quotas, subsidies, local content requirements,
administrative delays.
3. Both restrict trade, but quotas limit quantity directly.
12: According to the theory of absolute advantage, under free trade:
Correct Answer: Each nation gains by specializing in economic activities in which a nation has absolute advantage.
1. Absolute advantage: country can produce more of a good with same resources.
2. Adam Smith argued specialization and trade benefit all parties.
3. Example: Country A produces wheat more efficiently; Country B produces cloth more efficiently; trade benefits both.
, 13: Which of the following is NOT a nontariff trade barrier (NTB)?
Correct Answer: Cultural distance.
1. NTBs include import quotas, voluntary export restraints, local content requirements, administrative barriers,
subsidies.
2. Cultural distance is a difference in norms/values, not a government-imposed trade barrier.
3. While cultural distance affects trade, it is not a policy instrument.
14: Chile requires 50 units to produce one ton of wine and 20 units for blueberries. France
requires 30 units for wine and 40 units for blueberries. Which is true?
Correct Answer: France has a comparative advantage in wine.
1. Comparative advantage determined by opportunity cost.
2. Chile: 1 wine = 2.5 blueberries (50/20). France: 1 wine = 0.75 blueberries (30/40).
3. France has lower opportunity cost in wine (0.75 vs 2.5), so France has comparative advantage in wine.
15: Which theory does NOT conclude that unrestricted free trade is in the best interests of
all countries?
Correct Answer: Strategic trade theory.
1. Strategic trade theory argues for selective government intervention to support domestic firms in strategic industries.
2. Suggests that in oligopolistic markets with first-mover advantages, protection/subsidies can enhance national
welfare.
3. Thus, free trade may not be optimal under certain conditions.
16: Define free trade.
Correct Answer: The idea that market forces should determine how much to trade with little or no government
intervention.
1. Free trade minimizes tariffs, quotas, and subsidies.
2. Promotes comparative advantage and efficiency.
3. Core principle of WTO and other international trade agreements.
17: Protectionism is similar to mercantilism as both advocate:
Correct Answer: Government involvement in international trade.
1. Both support active government role to protect domestic interests.
2. Mercantilism focused on accumulating wealth via trade surplus; protectionism focuses on shielding domestic
industries.
3. Contrast with free trade ideology of laissez-faire.
18: OLI advantages refer to a firm's quest for _____ via FDI.
Correct Answer: Ownership advantages, location advantages, and internalization advantages.
1. Dunning's OLI paradigm explains FDI motives.
2. Ownership advantages (VRIO assets), location advantages (host country benefits), internalization advantages (keep
within firm rather than license).
3. All three conditions needed for FDI to occur.
19: MNEs' possession and leveraging of VRIO assets overseas in FDI refer to:
Correct Answer: Ownership.
1. Ownership advantage is the "O" in OLI paradigm.
2. VRIO: valuable, rare, hard-to-imitate, organizationally embedded.
3. These intangible assets (technology, brand, management) give MNE competitive edge abroad.
(Latest 2026/2027 Update) International Business | Q&A | Grade A |
100% Correct (Verified Answers) – WGU Program
Subject: C211 – Global Economics for Managers / International Business
Source: WGU Pre-Assessment, OA Retake Sections, and Economics Review
Format: Q&A Guide with Rationale | All Questions Exhausted
Total questions: 110+ (every question from raw data)
1: How does the resource-based view of global business differ from the institution-based
view?
Correct Answer: Focuses on the internal strengths of the firm.
1. Resource-based view (RBV) emphasizes firm-specific resources and capabilities (VRIO: valuable, rare, inimitable,
organized).
2. Institution-based view focuses on external formal (laws, regulations) and informal (culture, norms) constraints.
3. RBV asks "What do we have?" while institution-based view asks "What rules apply?"
2: According to the "pendulum view" perspective, what is true about globalization?
Correct Answer: Globalization is not a one-directional phenomenon.
1. Pendulum view sees globalization as swinging between integration and isolation over time, not a linear progression.
2. Historical periods: pre-WWI globalization, interwar isolation, post-WWII integration.
3. This view rejects the idea that globalization always increases.
3: Which view of globalization suggests that globalization is neither recent nor one-
directional?
Correct Answer: Pendulum view.
1. Pendulum view emphasizes cyclical patterns rather than linear progression.
2. Globalization has ebbed and flowed throughout history.
3. Contrasts with "new-force view" (recent phenomenon) and "long-run historical view" (continuous evolution since
dawn of humanity).
4: What is true about semiglobalization?
Correct Answer: It is a type of globalization that lies between total isolation and total globalization.
1. Semiglobalization recognizes that most economic activity is neither purely local nor purely global.
2. International business operates in a zone where both local and global forces matter.
3. Reflects reality: cross-border integration is incomplete and varies by industry/activity.
5: Globalization can be viewed as:
Correct Answer: A new force sweeping the world in recent times, a long-run historical evolution since the dawn of human
history, and a pendulum that swings from one extreme to another.
1. Three views: new-force (recent phenomenon), long-run historical (continuous evolution), pendulum (cyclical).
2. Each offers different insights; managers should consider multiple perspectives.
3. Debate among scholars reflects complexity of the globalization concept.
,6: Name the three views of globalization.
Correct Answer: A recent force, a long-running evolution, and a pendulum.
1. Recent force view: globalization post-1980s (technology, trade liberalization).
2. Long-running evolution view: globalization since ancient times (Silk Road, colonial expansion).
3. Pendulum view: globalization swings between extremes over time.
7: Which theory viewed international trade as a zero-sum game?
Correct Answer: Mercantilism.
1. Mercantilism (16th-18th century) believed world wealth was fixed; one nation's gain was another's loss.
2. Advocated maximizing exports and minimizing imports through tariffs and subsidies.
3. Classical economists (Smith, Ricardo) proved trade is not zero-sum.
8: Which principle advocated that governments should actively protect domestic
industries from imports and vigorously promote exports?
Correct Answer: Protectionism.
1. Protectionism uses tariffs, quotas, subsidies to shield domestic industries.
2. Similar to mercantilism in advocating government intervention.
3. Contrasts with free trade ideology of minimal government involvement.
9: Which of the following is a modern trade theory?
Correct Answer: National competitive advantage (Porter's Diamond).
1. Modern trade theories: product life cycle theory, strategic trade theory, Porter's diamond (national competitive
advantage).
2. Porter's diamond includes factor conditions, demand conditions, related/supporting industries, firm strategy/rivalry.
3. Explains why certain nations are home to competitive industries.
10: Which theory assumes the wealth of the world is fixed?
Correct Answer: Mercantilism.
1. Zero-sum assumption is fundamental to mercantilism.
2. Led to policies of hoarding gold/silver and trade surpluses.
3. Adam Smith's absolute advantage and Ricardo's comparative advantage disproved this assumption.
11: Import quotas are a type of:
Correct Answer: Tariff barrier.
1. Import quota is a non-tariff barrier (NTB), not a tariff barrier (question phrasing indicates answer as tariff barrier but
note: quotas are NTBs).
2. Tariff barriers are taxes on imports; non-tariff barriers include quotas, subsidies, local content requirements,
administrative delays.
3. Both restrict trade, but quotas limit quantity directly.
12: According to the theory of absolute advantage, under free trade:
Correct Answer: Each nation gains by specializing in economic activities in which a nation has absolute advantage.
1. Absolute advantage: country can produce more of a good with same resources.
2. Adam Smith argued specialization and trade benefit all parties.
3. Example: Country A produces wheat more efficiently; Country B produces cloth more efficiently; trade benefits both.
, 13: Which of the following is NOT a nontariff trade barrier (NTB)?
Correct Answer: Cultural distance.
1. NTBs include import quotas, voluntary export restraints, local content requirements, administrative barriers,
subsidies.
2. Cultural distance is a difference in norms/values, not a government-imposed trade barrier.
3. While cultural distance affects trade, it is not a policy instrument.
14: Chile requires 50 units to produce one ton of wine and 20 units for blueberries. France
requires 30 units for wine and 40 units for blueberries. Which is true?
Correct Answer: France has a comparative advantage in wine.
1. Comparative advantage determined by opportunity cost.
2. Chile: 1 wine = 2.5 blueberries (50/20). France: 1 wine = 0.75 blueberries (30/40).
3. France has lower opportunity cost in wine (0.75 vs 2.5), so France has comparative advantage in wine.
15: Which theory does NOT conclude that unrestricted free trade is in the best interests of
all countries?
Correct Answer: Strategic trade theory.
1. Strategic trade theory argues for selective government intervention to support domestic firms in strategic industries.
2. Suggests that in oligopolistic markets with first-mover advantages, protection/subsidies can enhance national
welfare.
3. Thus, free trade may not be optimal under certain conditions.
16: Define free trade.
Correct Answer: The idea that market forces should determine how much to trade with little or no government
intervention.
1. Free trade minimizes tariffs, quotas, and subsidies.
2. Promotes comparative advantage and efficiency.
3. Core principle of WTO and other international trade agreements.
17: Protectionism is similar to mercantilism as both advocate:
Correct Answer: Government involvement in international trade.
1. Both support active government role to protect domestic interests.
2. Mercantilism focused on accumulating wealth via trade surplus; protectionism focuses on shielding domestic
industries.
3. Contrast with free trade ideology of laissez-faire.
18: OLI advantages refer to a firm's quest for _____ via FDI.
Correct Answer: Ownership advantages, location advantages, and internalization advantages.
1. Dunning's OLI paradigm explains FDI motives.
2. Ownership advantages (VRIO assets), location advantages (host country benefits), internalization advantages (keep
within firm rather than license).
3. All three conditions needed for FDI to occur.
19: MNEs' possession and leveraging of VRIO assets overseas in FDI refer to:
Correct Answer: Ownership.
1. Ownership advantage is the "O" in OLI paradigm.
2. VRIO: valuable, rare, hard-to-imitate, organizationally embedded.
3. These intangible assets (technology, brand, management) give MNE competitive edge abroad.
