WGU C211 - Global Economics for Managers Exam 2022/2023
1.Views on Globalization: New, Evolutionary, and Pendulum
2."New" view on globalization: A force sweeping through the world in
recent times.
3."Evolutionary" view on globalization: A long-run historical evolution since the dawn of human history
4."Pendulum" view on globalization: One that swings from one
extreme to another from time to time
5.Foreign Direct Investment: Direct investment in, control, and
management of value-added activities in other countries
6.Political views on FDI: Radical View, Free Market View, Pragmatic
Nationalism
7.Benefits to a country receiving FDI: Capital Inflow, Technology
Spillover, Advanced Management Know-How, Job creation
8.Costs to a country receiving FDI: Loss of Sovereignty, Adverse
effects on competition, Capital outflow.
9.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.
10.Resource similarity: The extent to which a given competitor
possesses strate- gic endowment comparable, in terms of both type and amount, to those of the focal firm.
11.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)
12.Classical theories of international trade: Mercantilism, Absolute
advantage, and Comparative advantage
13.Modern theory view: Dynamic
14.Classical theory view: Static
15.Absolute advantage: The economic advantage one nation enjoys
that is superior to other nations 1 / 3
16.Comparative advantage: The advantage one economic activity
nation enjoys in comparison with other nations (relative, not absolute)
17.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. 2 / 3
18.Features of the product life cycle?: New, Maturing, and Standardized
19.Strategic trade: Intervention by governments in certain industries
can en- hance their odds for international success.
20.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.
21.Which theory came first?: Mercantilism (although both are of the
idea that governments should actively protect domestic industries from imports and vigor- ously promote exports) 22.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.
23.Transaction risk: The exchange rate risk associated with the
time delay between entering into a contract and settling it.
24.Hedging: A transaction, such as forward transactions, that protects
traders and investors from exposure to the fluctuations of the spot rate.
25.Currency hedging: A way to protect traders and investors from being
exposed to the fluctuations of the spot rate
26.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)
27.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.)
28.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.)
29.Foreign market entries types: Non-equity and equity
30.Non-equity: Reflects relatively smaller commitments to overseas
markets. Determines firms MNE status.
31.Equity: indicative of relatively larger, harder-to-reverse
- / 3