WGU C211 - Global Economics for
Managers exam 2023-2024|136
Questions and Answers| Graded A.
Views on Globalization - -New, Evolutionary, and Pendulum
-"New" view on globalization - -A force sweeping through the world in recent times.
-"Evolutionary" view on globalization - -A long-run historical evolution since the dawn
of human history
-"Pendulum" view on globalization - -One that swings from one extreme to another
from time to time
-Foreign Direct Investment - -Direct investment in, control, and management of value-
added activities in other countries
-Political views on FDI - -Radical View, Free Market View, Pragmatic Nationalism
-Benefits to a country receiving FDI - -Capital Inflow, Technology Spillover, Advanced
Management Know-How, Job creation
-Costs to a country receiving FDI - -Loss of Sovereignty, Adverse effects on
competition,
Capital outflow.
-How do resources and capabilities influence the competitive dynamics of a business? -
-Resource similarity and market commonality can yield a powerful framework for
competitor analysis.
-Resource similarity - -The extent to which a given competitor possesses strategic
endowment comparable, in terms of both type and amount, to those of the focal firm.
-How does resource similarity impact competitive dynamics? - -Firms with a high
degree are likely to have similar competitive actions. (Starbuck's instant coffee &
McDonald's iced coffee)
-Classical theories of international trade - -Mercantilism, Absolute advantage, and
Comparative advantage
-Modern theory view - -Dynamic
-Classical theory view - -Static
, -Absolute advantage - -The economic advantage one nation enjoys that is superior to
other nations
-Comparative advantage - -The advantage one economic activity nation enjoys in
comparison with other nations (relative, not absolute)
-Mercantilism - -A theory that suggests that the wealth of the world is fixed and that a
nation that exports more and imports less will be richer.
-Features of the product life cycle? - -New, Maturing, and Standardized
-Strategic trade - -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? - -The price of
a commodity, a country's currency, is fundamentally determined by this. Strong demand
leads to price hikes; oversupply results in price drops.
-Which theory came first? - -Mercantilism (although both are of the idea that
governments should actively protect domestic industries from imports and vigorously
promote exports)
-If a company seeks to limit foreign exchange rate exposure in the forward direction,
what is the most effective way to do this? - -Forward transactions, an act know as
currency hedging.
-Transaction risk - -The exchange rate risk associated with the time delay between
entering into a contract and settling it.
-Hedging - -A transaction, such as forward transactions, that protects traders and
investors from exposure to the fluctuations of the spot rate.
-Currency hedging - -A way to protect traders and investors from being exposed to the
fluctuations of the spot rate
-Strategic hedging - -A means of spreading out activities in different currency zones in
order to offset the currency losses in certain regions through gains in other regions
(currency diversification)
-First mover advantages - -Proprietary, technological leadership, pre-emption of scarce
resources, establishment of entry barriers to late entrants, avoidance of clash with
dominant firms at home, relationships with key stakeholders, (such as governments.)
-Late mover advantages - -Opportunity to free ride on first-mover investments,
Resolution of technological and market uncertainty, First mover's difficulty to adapt to
market changes.)
Managers exam 2023-2024|136
Questions and Answers| Graded A.
Views on Globalization - -New, Evolutionary, and Pendulum
-"New" view on globalization - -A force sweeping through the world in recent times.
-"Evolutionary" view on globalization - -A long-run historical evolution since the dawn
of human history
-"Pendulum" view on globalization - -One that swings from one extreme to another
from time to time
-Foreign Direct Investment - -Direct investment in, control, and management of value-
added activities in other countries
-Political views on FDI - -Radical View, Free Market View, Pragmatic Nationalism
-Benefits to a country receiving FDI - -Capital Inflow, Technology Spillover, Advanced
Management Know-How, Job creation
-Costs to a country receiving FDI - -Loss of Sovereignty, Adverse effects on
competition,
Capital outflow.
-How do resources and capabilities influence the competitive dynamics of a business? -
-Resource similarity and market commonality can yield a powerful framework for
competitor analysis.
-Resource similarity - -The extent to which a given competitor possesses strategic
endowment comparable, in terms of both type and amount, to those of the focal firm.
-How does resource similarity impact competitive dynamics? - -Firms with a high
degree are likely to have similar competitive actions. (Starbuck's instant coffee &
McDonald's iced coffee)
-Classical theories of international trade - -Mercantilism, Absolute advantage, and
Comparative advantage
-Modern theory view - -Dynamic
-Classical theory view - -Static
, -Absolute advantage - -The economic advantage one nation enjoys that is superior to
other nations
-Comparative advantage - -The advantage one economic activity nation enjoys in
comparison with other nations (relative, not absolute)
-Mercantilism - -A theory that suggests that the wealth of the world is fixed and that a
nation that exports more and imports less will be richer.
-Features of the product life cycle? - -New, Maturing, and Standardized
-Strategic trade - -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? - -The price of
a commodity, a country's currency, is fundamentally determined by this. Strong demand
leads to price hikes; oversupply results in price drops.
-Which theory came first? - -Mercantilism (although both are of the idea that
governments should actively protect domestic industries from imports and vigorously
promote exports)
-If a company seeks to limit foreign exchange rate exposure in the forward direction,
what is the most effective way to do this? - -Forward transactions, an act know as
currency hedging.
-Transaction risk - -The exchange rate risk associated with the time delay between
entering into a contract and settling it.
-Hedging - -A transaction, such as forward transactions, that protects traders and
investors from exposure to the fluctuations of the spot rate.
-Currency hedging - -A way to protect traders and investors from being exposed to the
fluctuations of the spot rate
-Strategic hedging - -A means of spreading out activities in different currency zones in
order to offset the currency losses in certain regions through gains in other regions
(currency diversification)
-First mover advantages - -Proprietary, technological leadership, pre-emption of scarce
resources, establishment of entry barriers to late entrants, avoidance of clash with
dominant firms at home, relationships with key stakeholders, (such as governments.)
-Late mover advantages - -Opportunity to free ride on first-mover investments,
Resolution of technological and market uncertainty, First mover's difficulty to adapt to
market changes.)
