WGU C211 GLOBAL ECONOMICS FOR
MANAGERS EXAM PREPARATION PACK 2026
KEY CONCEPTS AND REVISION NOTES
◉ A home appliance manufacturer located in The Netherlands
decides to open two new manufacturing plants, one in Poland and
the other in Thailand. Its purpose is to offset currency losses
through:
Answer: strategic hedging
◉ Why do managers, at some of the largest global corporations, fail
to engage in currency hedging?
Answer: They believe that the protection against fluctuations in
exchange rates is not worth the potentially high cost of currency
hedging.
◉ Risk analysis of any country must include an analysis of the
country's:
Answer: currency risks
◉ With regard to foreign market entry, the resource-based view
argues that foreign firms need to
,Answer: deploy overwhelming resources and capabilities to offset
their liability of foreignness.
◉ Which of the following is a first-mover advantage?
Answer: Avoidance of clash with a dominant firm at home
◉ Which of the following is an equity mode of entry?
Answer: Wholly owned subsidiaries
◉ Which of the following entry modes is a type of strategic alliance?
Answer: Licensing
◉ Which of the following is a disadvantage of licensing and
franchising?
Answer: Little control over marketing
◉ Miami is an ideal city for both North American firms looking to
expand their business to Central and South America and for Latin
American companies to expand their business to North America.
This is an example of a(n):
Answer: location-specific advantage.
◉ The following are examples of location-specific advantages:
,Answer: Industry demand that creates a skilled labor force.
Industry demand that facilitates a pool of specialized suppliers and
buyers.
Knowledge spillovers among closely located firms.
◉ Which of the following is a first-mover advantage?
Answer: Avoid clashing with dominant firms in their home market.
◉ Which of type of entry mode is a wholly owned subsidiary?
Answer: Equity mode
◉ What are the possible benefits of being a late mover?
Answer: Opportunity to free ride on first-mover investments
First mover's difficulty to adapt to market changes
Resolution of technological and market uncertainty
◉ Assume that a firm is looking to expand into a foreign market, but
it needs an opportunity that has low development costs and little
risk. Its best choice would be:
Answer: a contractual agreement.
◉ Assume that a major technology company is looking to expand
into a foreign market but it can't risk losing its core innovations by
, sharing them with anyone outside the corporation. Its best choice
would be:
Answer: a wholly owned subsidiary.
◉ The price leader's _____ is defined as sufficient resources
possessed to deter and combat defection.
Answer: capacity to punish
◉ _____ is defined as the extent to which a given competitor
possesses strategic endowment comparable, in terms of both type
and amount, to those of the focal firm.
Answer: Resource similarity
◉ Which of the following sets of words describes the initial set of
actions a firm uses to gain competitive advantage and the other
firm's response to it?
Answer: Attack, counterattack
◉ When firms indirectly coordinate actions by signaling their
intentions, often in an attempt to reduce output and maintain
pricing above competitive levels, they are engaging in:
Answer: tacit collusion.
MANAGERS EXAM PREPARATION PACK 2026
KEY CONCEPTS AND REVISION NOTES
◉ A home appliance manufacturer located in The Netherlands
decides to open two new manufacturing plants, one in Poland and
the other in Thailand. Its purpose is to offset currency losses
through:
Answer: strategic hedging
◉ Why do managers, at some of the largest global corporations, fail
to engage in currency hedging?
Answer: They believe that the protection against fluctuations in
exchange rates is not worth the potentially high cost of currency
hedging.
◉ Risk analysis of any country must include an analysis of the
country's:
Answer: currency risks
◉ With regard to foreign market entry, the resource-based view
argues that foreign firms need to
,Answer: deploy overwhelming resources and capabilities to offset
their liability of foreignness.
◉ Which of the following is a first-mover advantage?
Answer: Avoidance of clash with a dominant firm at home
◉ Which of the following is an equity mode of entry?
Answer: Wholly owned subsidiaries
◉ Which of the following entry modes is a type of strategic alliance?
Answer: Licensing
◉ Which of the following is a disadvantage of licensing and
franchising?
Answer: Little control over marketing
◉ Miami is an ideal city for both North American firms looking to
expand their business to Central and South America and for Latin
American companies to expand their business to North America.
This is an example of a(n):
Answer: location-specific advantage.
◉ The following are examples of location-specific advantages:
,Answer: Industry demand that creates a skilled labor force.
Industry demand that facilitates a pool of specialized suppliers and
buyers.
Knowledge spillovers among closely located firms.
◉ Which of the following is a first-mover advantage?
Answer: Avoid clashing with dominant firms in their home market.
◉ Which of type of entry mode is a wholly owned subsidiary?
Answer: Equity mode
◉ What are the possible benefits of being a late mover?
Answer: Opportunity to free ride on first-mover investments
First mover's difficulty to adapt to market changes
Resolution of technological and market uncertainty
◉ Assume that a firm is looking to expand into a foreign market, but
it needs an opportunity that has low development costs and little
risk. Its best choice would be:
Answer: a contractual agreement.
◉ Assume that a major technology company is looking to expand
into a foreign market but it can't risk losing its core innovations by
, sharing them with anyone outside the corporation. Its best choice
would be:
Answer: a wholly owned subsidiary.
◉ The price leader's _____ is defined as sufficient resources
possessed to deter and combat defection.
Answer: capacity to punish
◉ _____ is defined as the extent to which a given competitor
possesses strategic endowment comparable, in terms of both type
and amount, to those of the focal firm.
Answer: Resource similarity
◉ Which of the following sets of words describes the initial set of
actions a firm uses to gain competitive advantage and the other
firm's response to it?
Answer: Attack, counterattack
◉ When firms indirectly coordinate actions by signaling their
intentions, often in an attempt to reduce output and maintain
pricing above competitive levels, they are engaging in:
Answer: tacit collusion.
