WGU C211 GLOBAL ECONOMICS EXAM
PREP QUESTIONS AND ANSWERS
COMPLETE REVIEW MATERIAL
●● What different political views exist on FDI?
Answer: Radical, Free Market, and Pragramatic Nationalism
●● What benefits exist to a country receiving FDI?
Answer: Capital inflow, Technology, management, job creation
●● What costs exist to a country receiving FDI?
Answer: Loss of sovereignty, adverse effects on competition, and capital
outflow
●● How do resources and capabilities influence the competitive
dynamics of a business?
Answer: Value, rarity, imitibility, and organization (VRIO)
●● Globalization new view
Answer: A new force sweeping through the world in recent times
●● Evolutionary globalization view
,Answer: long-run historical evolution since the dawn of human history
●● "Pendulum" view on globalization
Answer: One that swings from one extreme to another from time to time
●● What is resource similarity and how does this impact competitive
dynamics?
Answer: The degree to which two firms with similar resources are likely
to have competitive actions. ie: market commonality
●● Give a description of the classical theory of international trade.
Answer: The major theories typically studied consist of mercantilism,
absolute advantage, and comparative advantage
●● How would the modern theory compare to the classical theory?
Answer: the major theories typically studied consist of product life
cycle, strategic trade, and national competitive advantage.
●● Absolute advantage
Answer: involves being more efficient than anyone else in the
production of any good or service
●● comparative advantage
, Answer: is the relative (not absolute) advantage in one absolute activity
that one nation enjoys in comparison with other nations
●● Mercantilism
Answer: Classical trade theory that viewed international trade as a zero-
sum game
●● What are the critical features of the product life cycle?
Answer: An economic theory that accounts for changes in the patterns of
trade over time
●● How would you describe strategic trade?
Answer: A theory that suggests that strategic intervention by
governments in certain industries can enhance their odds for
international success
●● How are supply and demand related to the exchange rate of a
country?
Answer: Exchange rates rise and fall based on the underlying economic
conditions that prompt traders, investors and others to want more of a
particular currency.
●● Which theory came first, mercantilism or modern-day protectionism?
PREP QUESTIONS AND ANSWERS
COMPLETE REVIEW MATERIAL
●● What different political views exist on FDI?
Answer: Radical, Free Market, and Pragramatic Nationalism
●● What benefits exist to a country receiving FDI?
Answer: Capital inflow, Technology, management, job creation
●● What costs exist to a country receiving FDI?
Answer: Loss of sovereignty, adverse effects on competition, and capital
outflow
●● How do resources and capabilities influence the competitive
dynamics of a business?
Answer: Value, rarity, imitibility, and organization (VRIO)
●● Globalization new view
Answer: A new force sweeping through the world in recent times
●● Evolutionary globalization view
,Answer: long-run historical evolution since the dawn of human history
●● "Pendulum" view on globalization
Answer: One that swings from one extreme to another from time to time
●● What is resource similarity and how does this impact competitive
dynamics?
Answer: The degree to which two firms with similar resources are likely
to have competitive actions. ie: market commonality
●● Give a description of the classical theory of international trade.
Answer: The major theories typically studied consist of mercantilism,
absolute advantage, and comparative advantage
●● How would the modern theory compare to the classical theory?
Answer: the major theories typically studied consist of product life
cycle, strategic trade, and national competitive advantage.
●● Absolute advantage
Answer: involves being more efficient than anyone else in the
production of any good or service
●● comparative advantage
, Answer: is the relative (not absolute) advantage in one absolute activity
that one nation enjoys in comparison with other nations
●● Mercantilism
Answer: Classical trade theory that viewed international trade as a zero-
sum game
●● What are the critical features of the product life cycle?
Answer: An economic theory that accounts for changes in the patterns of
trade over time
●● How would you describe strategic trade?
Answer: A theory that suggests that strategic intervention by
governments in certain industries can enhance their odds for
international success
●● How are supply and demand related to the exchange rate of a
country?
Answer: Exchange rates rise and fall based on the underlying economic
conditions that prompt traders, investors and others to want more of a
particular currency.
●● Which theory came first, mercantilism or modern-day protectionism?
