WGU C211 - Global Economics for Managers with
complete solution 2022/2023 UPDATE
Views on Globalization - answer New, Evolutionary, and Pendulum
"New"
... [Show More] view on globalization - answer A force sweeping through the world in recent times.
"Evolutionary" view on globalization - answer A 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
Foreign Direct Investment - answer Direct investment in, control, and management of value-added
activities in other countries
Political views on FDI - answer Radical View, Free Market View, Pragmatic Nationalism
Benefits to a country receiving FDI - answer Capital Inflow, Technology Spillover, Advanced
Management Know-How, Job creation
Costs to a country receiving FDI - answer Loss of Sovereignty, Adverse effects on competition,
Capital outflow.
How do resources and capabilities influence the competitive dynamics of a business? - answer Resource
similarity and market commonality can yield a powerful framework for competitor analysis.
Resource similarity - answer 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? - answer 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 - answer Mercantilism, Absolute advantage, and Comparative
advantage
Modern theory view - answer Dynamic
Classical theory view - answer Static
Absolute advantage - answer The economic advantage one nation enjoys that is superior to other
nations
Comparative advantage - answer The advantage one economic activity nation enjoys in comparison
with other nations (relative, not absolute)
Mercantilism - answer 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? - answer New, Maturing, and Standardized
Strategic trade - answer 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 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? - answer 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? - answer Forward transactions, an act know as currency hedging.
Transaction risk - answer The exchange rate risk associated with the time delay between entering into a
contract and settling it.
Hedging - answer A transaction, such as forward transactions, that protects traders and investors from
exposure to the fluctuations of the spot rate.
Currency hedging - answer A way to protect traders and investors from being exposed to the
fluctuations of the spot rate
Strategic hedging - answer 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 - answer 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 - answer Opportunity to free ride on first-mover investments, Resolution of
technological and market uncertainty, First mover's difficulty to adapt to market changes.)
Foreign market entries types - answer Non-equity and equity
Non-equity - answer Reflects relatively smaller commitments to overseas markets. Determines firms
MNE status.
Equity - answer indicative of relatively larger, harder-to-reverse commitments. Determines firms MNE
status.
How do institutions reduce uncertainty? - answer Establish "rules of the game" that economic players
play by. A standard to follow in order to survive and prosper. By signaling which conduct is legitimate
and which is not, institutions constrain the range of acceptable actions. [Show Less]