WGU C211 Global Econ Study Guide & Cohort Questions

WGU C211 GLOBAL ECON STUDY GUIDE & COHORT QUESTIONS WITH 100% CORRECT ANSWERS Views of globalization (Chp 1.4) - correct answer 1. It's a new phenomenom, starting in the late 20th century. 2. It's a long term part of human history. 3. Neither recent nor one directional, it's a pendulum that swings back and forth. Location specific advantage of Natural resource—seeking - correct answer Strategic goal - Possession of natural resources and related transport and communication infrastructure Location specific advantage of Market-seeking - correct answer Strategic goal - Abundance of strong market demand and customers willing to pay Location specific advantage of Efficiency-seeking - correct answer Strategic goal - Economies of scale and abundance of low-cost factors Location specific advantage of Innovation-seeking - correct answer Strategic goal - Abundance of innovative individuals, firms, and universities Name first mover advantages: (Chp 10.3) - correct answer 1. Proprietary, technological leadership 2. Pre-emption of scarce resources 3. Establishment of entry barriers for late entrants 4. Avoidance of clash with dominant firms at home 5. Relationships with key stakeholders such as governments Name late mover advantages: (Chp 10.3) - correct answer 1. Opportunity to free ride on first-mover investments 2. Resolution of technological and market uncertainty 3. First mover's difficulty to adapt to market changes Name strategic goals supported by location specific advantages (Chp 10.2) - correct answer 1. Natural resources 2. Market 3. Efficiency 4. Innovation Proposition (1) underpinning an institution based view of global business. - correct answer Managers and firms rationally pursue their interests and make choices within the formal and informal constraints in a given institutional framework Proposition (2) underpinning an institution based view of global business. - correct answer While formal and informal institutions combine to govern firm behavior, in situations where formal constraints are unclear or fail, informal constraints will play a larger role in reducing uncertainty and providing constancy to managers and firms Market economy - correct answer An economy that is characterized by the "invisible hand" of market forces. No country has embraced Adam Smith's Laissez faire model Command economy - correct answer Supply, Demand, and price are planned by the government. An economy that is characterized by government ownership and control of factors of production. Mixed economy - correct answer An economy that has elements of both a market economy and a command economy. Property rights - correct answer The legal rights to use an economic property (resource) and to derive income and benefits from it. Purpose of property rights - correct answer The formal protection of property rights helps to facilitate economic growth. Civil Law - correct answer A legal tradition that uses comprehensive statutes and codes as a primary means to form legal judgments. This is the oldest and dates back to the romans Common Law - correct answer A legal tradition that is shaped by precedents and traditions from previous judicial decisions. Such as the U.S. Theocratic Law - correct answer A legal system based on religious teachings. Suach as Jewish or Islamic States Democracy - correct answer Right to freedom of expression and organization. Totalitarianism - correct answer One person or party exercises absolute control. How do institutions reduce uncertainty? (Chp 2-2) - correct answer By signaling which conduct is legitimate and which is not they constrain the range of acceptable actions. Comprehensive model of foreign market entries - correct answer 1. How to enter depends on the scale of entry: large-scale versus small-scale entries. 2. First focuses on the equity (ownership) issue. 3. Second step focuses on making the actual selection, such as exports, contractual agreements, joint ventures and wholly owned subsidiaries. Political realities governing international trade. - correct answer Political realities suggest that as "rules of the game", plenty of trade barriers exist. Defined as The net impact of various tariffs and nontariff barriers is that the whole nation is worse off while certain special interest groups (such as certain industries, firms, and regions) benefit. Economic arguments against free trade: - correct answer 1. protectionism 2. infant industries