PRE-ASSESSMENT: GLOBAL
ECONOMICS FOR MANAGERS (UZC2).
WGU C211. Correct Answers Only
Which view claims that the phenomenon of globalization was initially driven by the desire of
Western economies to exploit their power through multinational enterprises? Ans: The new-
force view
Economic gains come from international trade because one country's exported goods, services, or
other items are unique, valuable, and difficult to duplicate to the importing countries Ans:
Resource-based view
What is the aggregation of importing and exporting that leads to the country-level trade surplus
or deficit? Ans: Balance of trade
What is a cost of foreign direct investment? Ans: Developing countries may be exploited by
multinational enterprises (MNE).
What may precious, rare, and hard-to-duplicate resources and capabilities lead to for a firm?
Ans: Sustained comparative advantage
Which theory states that patterns of international trade change across new, maturing, and
standardized stages? Ans: Product life cycle theory
What is the financial environment in which exchange rates and payments for goods and services
are conducted? Ans: International monetary system
What happens to a country's real exchange rate and nominal interest rate as the price level
increases, assuming all other factors are unchanged? Ans: Exchange rates fall and interest rates
rise.
What is the easiest method nonfinancial companies use to handle currency fluctuations? Ans:
Currency diversification
Which strategy minimizes the risk of unanticipated changes in future exchange rates? Ans:
Currency swap
A company is looking for a location with an abundance of ground-breaking individuals, firms,
and universities.
Which type of strategic goal is this company demonstrating? Ans: Innovation-seeking
ECONOMICS FOR MANAGERS (UZC2).
WGU C211. Correct Answers Only
Which view claims that the phenomenon of globalization was initially driven by the desire of
Western economies to exploit their power through multinational enterprises? Ans: The new-
force view
Economic gains come from international trade because one country's exported goods, services, or
other items are unique, valuable, and difficult to duplicate to the importing countries Ans:
Resource-based view
What is the aggregation of importing and exporting that leads to the country-level trade surplus
or deficit? Ans: Balance of trade
What is a cost of foreign direct investment? Ans: Developing countries may be exploited by
multinational enterprises (MNE).
What may precious, rare, and hard-to-duplicate resources and capabilities lead to for a firm?
Ans: Sustained comparative advantage
Which theory states that patterns of international trade change across new, maturing, and
standardized stages? Ans: Product life cycle theory
What is the financial environment in which exchange rates and payments for goods and services
are conducted? Ans: International monetary system
What happens to a country's real exchange rate and nominal interest rate as the price level
increases, assuming all other factors are unchanged? Ans: Exchange rates fall and interest rates
rise.
What is the easiest method nonfinancial companies use to handle currency fluctuations? Ans:
Currency diversification
Which strategy minimizes the risk of unanticipated changes in future exchange rates? Ans:
Currency swap
A company is looking for a location with an abundance of ground-breaking individuals, firms,
and universities.
Which type of strategic goal is this company demonstrating? Ans: Innovation-seeking
