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WGU C211 Pre-Assessment Global Economics for
Managers Questions with Correct Verified Answers/ C211
Pre-Assessment Review
Explain the New, Evolutionary, and Pendulum views of
Globalization. How do these differ from one another? -
...ANSWER...✓✓ New globalization is a new force
sweeping through the world in recent times. Pendulum
globalization is a pendulum that swings from one
extreme to the the other from time to time. Evolutionary
globalization is a long historical evolution since the dawn
of human history.
What is Foreign Direct Investment? - ...ANSWER...✓✓
Investment in controlling and managing value-added
activities in other countries.
What different political views exist on FDI? -
...ANSWER...✓✓ Radical - hostile to FDI, roots to
Marxism, treates FDI as an instrument of imperialism and
as a vehicle for exploitation of domestic resources by
foreign capitalists and firms.
Free Market - suggests that FDI unrestricted by
government intervention will enable countries to tap into
their absolute comparative advantages by specializing in
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the production of certain goods and services.. win-win
logic FDI friendly polices Brazil, China, Hungary, India,
Ireland, Russia.
Pragmatic Nationalism - Practiced by most countries.
Viewing FDI as having both pros and cons and only
aprroving FDI when its benefits outweigh costs.
What benefits exist to a country receiving FDI? -
...ANSWER...✓✓ Capital inflow - can help improve a host
country's balance of payments
Technology - can create technology spillovers that benefit
domestic firms and industries
Advanced managment - know-how may be highly valued.
FDI creates jobs both directly and indirectly. Direct
benefits arise when MNEs employ individuals locally.
Indirect benefits include jobs created when local
suppliers increase hiring and when MNE employees
spend money locally resulting in more jobs. Repatriated
earnings from profits from FDI. Increased exports of
components and services to host countries. Learning via
FDI from operations abroad.
What costs exist to a country receiving FDI? -
...ANSWER...✓✓ -Loss of sovereignty because of
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decisions to invest, produce and market products and/or
to close plants and lay off workers in a host country are
being made by foreigners.
-Adverse effects on competiton. May drive some
domestic firms out of business. Having driven domestic
firms out of business MNE's in theory may be able to
monopolize local markets.
-Capital outflow when MNE's make profits in host
countries and repatriate (send back) such earnings to
headquarters in home countries, host countries
experience a net outflow in the capital account in their
balance of payments.
How do resources and capabilities influence the
competitive dynamics of a business? - ...ANSWER...✓✓
Strong resources and capabilities help to compete and/or
cooperate more effectively.
What is resource similarity and how does this impact
competitive dynamics? - ...ANSWER...✓✓ Extent to which
a given competitor possesses strategic endownment
comparable, in terms of both type and amount, to those of
the focal firm.
, 4|Page
Give a description of the classical theory of international
trade. - ...ANSWER...✓✓ Mercantilism, absolute
advantage, comparative advantage
How would the modern theory compare to the classical
theory? - ...ANSWER...✓✓ Modern Trade Theories are the
major theories of international trade that were advanced
in the 20th century, which consist of (1) product life cycle,
(2) strategic trade, and (3) national competitive advantage
of industries instead of relying on simple factor analysis,
modern theories rely on more realistic product life
cycles, first-mover advantages, and the "diamond" to
explain and predict patterns of trade.
Compare absolute advantage to comparative advantage.
What differences exist? - ...ANSWER...✓✓ Absolute
advantage is the ability of an individual, firm or country to
produce more of a good or service than competitors
when using the same amount of resources. (WinWin)
Comparative advantage is the ability of an individual, firm
or country to produce a good or service at a lower
opportunity cost than other producers. (Opportunity cost)
What is mercantilism and why is this an important term?
- ...ANSWER...✓✓ An economic theory that advocates
WGU C211 Pre-Assessment Global Economics for
Managers Questions with Correct Verified Answers/ C211
Pre-Assessment Review
Explain the New, Evolutionary, and Pendulum views of
Globalization. How do these differ from one another? -
...ANSWER...✓✓ New globalization is a new force
sweeping through the world in recent times. Pendulum
globalization is a pendulum that swings from one
extreme to the the other from time to time. Evolutionary
globalization is a long historical evolution since the dawn
of human history.
What is Foreign Direct Investment? - ...ANSWER...✓✓
Investment in controlling and managing value-added
activities in other countries.
What different political views exist on FDI? -
...ANSWER...✓✓ Radical - hostile to FDI, roots to
Marxism, treates FDI as an instrument of imperialism and
as a vehicle for exploitation of domestic resources by
foreign capitalists and firms.
Free Market - suggests that FDI unrestricted by
government intervention will enable countries to tap into
their absolute comparative advantages by specializing in
,2|Page
the production of certain goods and services.. win-win
logic FDI friendly polices Brazil, China, Hungary, India,
Ireland, Russia.
Pragmatic Nationalism - Practiced by most countries.
Viewing FDI as having both pros and cons and only
aprroving FDI when its benefits outweigh costs.
What benefits exist to a country receiving FDI? -
...ANSWER...✓✓ Capital inflow - can help improve a host
country's balance of payments
Technology - can create technology spillovers that benefit
domestic firms and industries
Advanced managment - know-how may be highly valued.
FDI creates jobs both directly and indirectly. Direct
benefits arise when MNEs employ individuals locally.
Indirect benefits include jobs created when local
suppliers increase hiring and when MNE employees
spend money locally resulting in more jobs. Repatriated
earnings from profits from FDI. Increased exports of
components and services to host countries. Learning via
FDI from operations abroad.
What costs exist to a country receiving FDI? -
...ANSWER...✓✓ -Loss of sovereignty because of
,3|Page
decisions to invest, produce and market products and/or
to close plants and lay off workers in a host country are
being made by foreigners.
-Adverse effects on competiton. May drive some
domestic firms out of business. Having driven domestic
firms out of business MNE's in theory may be able to
monopolize local markets.
-Capital outflow when MNE's make profits in host
countries and repatriate (send back) such earnings to
headquarters in home countries, host countries
experience a net outflow in the capital account in their
balance of payments.
How do resources and capabilities influence the
competitive dynamics of a business? - ...ANSWER...✓✓
Strong resources and capabilities help to compete and/or
cooperate more effectively.
What is resource similarity and how does this impact
competitive dynamics? - ...ANSWER...✓✓ Extent to which
a given competitor possesses strategic endownment
comparable, in terms of both type and amount, to those of
the focal firm.
, 4|Page
Give a description of the classical theory of international
trade. - ...ANSWER...✓✓ Mercantilism, absolute
advantage, comparative advantage
How would the modern theory compare to the classical
theory? - ...ANSWER...✓✓ Modern Trade Theories are the
major theories of international trade that were advanced
in the 20th century, which consist of (1) product life cycle,
(2) strategic trade, and (3) national competitive advantage
of industries instead of relying on simple factor analysis,
modern theories rely on more realistic product life
cycles, first-mover advantages, and the "diamond" to
explain and predict patterns of trade.
Compare absolute advantage to comparative advantage.
What differences exist? - ...ANSWER...✓✓ Absolute
advantage is the ability of an individual, firm or country to
produce more of a good or service than competitors
when using the same amount of resources. (WinWin)
Comparative advantage is the ability of an individual, firm
or country to produce a good or service at a lower
opportunity cost than other producers. (Opportunity cost)
What is mercantilism and why is this an important term?
- ...ANSWER...✓✓ An economic theory that advocates
