C211 Global Economics for Managers Practice Questions - Set 2 - Part 2

Correct Answer: b) Agglomeration

Agglomeration refers to the clustering of economic activities in particular locations, often leading to mutual benefits for businesses in the area.

Correct Answer: b) Planning for multiple future scenarios

Scenario planning involves preparing for various potential future events or risks by considering multiple possible scenarios.

Correct Answer: b) Efficient scale

Efficient scale refers to the level of output that minimizes average total cost, representing the optimal production point for a firm.

Correct Answer: c) Copyright

Copyright grants exclusive legal rights to authors and publishers to distribute and disseminate their creative works.

Correct Answer: b) Discount rate

The discount rate is the interest rate charged by the Federal Reserve to banks for short-term loans, influencing overall interest rates in the economy.

Correct Answer: b) Absolute advantage

Absolute advantage refers to the economic advantage one nation holds over others in producing certain goods more efficiently.

Correct Answer: a) Trade surplus

A trade surplus occurs when a country's exports exceed its imports, resulting in a positive balance of trade.

Correct Answer: b) Trademark

A trademark grants firms the exclusive legal right to use specific names, brands, and designs to differentiate their products in the market.

Correct Answer: b) Inverse relationship

The law of demand states that, other things being equal, the quantity demanded of a good falls when its price rises, indicating an inverse relationship.

Correct Answer: a) Consumption + Investment + Government Purchases + Net Exports

GDP is calculated as the sum of consumption, investment, government purchases, and net exports.

Correct Answer: a) Totalitarianism

Totalitarianism is a political system where one person or party holds absolute power, controlling all aspects of public and private life.

Correct Answer: a) Collusion

Collusion occurs when firms collectively agree to reduce output or manipulate prices to maintain higher profit margins.

Correct Answer: b) Resource mobility

Resource mobility suggests that resources can be reallocated across industries as economic conditions change, enhancing efficiency.

Correct Answer: b) First-mover advantage

First-mover advantage refers to the benefits a company gains by being the first to enter a new market, such as establishing brand loyalty.

Correct Answer: a) Horizontal FDI

Horizontal FDI refers to firms replicating their operations in foreign countries at the same value chain stage as in their home country.

Correct Answer: a) Piracy

Piracy refers to the unauthorized use or reproduction of someone else's intellectual property without permission.

Correct Answer: a) Price elasticity of demand

Price elasticity of demand measures how responsive the quantity demanded of a good is to changes in its price.

Correct Answer: a) Common law

Common law is a legal system that relies on judicial precedents and decisions to shape legal judgments and interpretations.

Correct Answer: b) Blue ocean strategy

Blue ocean strategy involves creating new markets and avoiding direct competition in existing markets, which are often saturated.

Correct Answer: c) Pragmatic nationalism

Pragmatic nationalism is the view that FDI should be permitted only when the benefits to the host country outweigh the associated costs.