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WGU Global-Economics-for-Managers Exam Syllabus Topics:

Section	Weight	Objectives
Global Finance and Monetary Systems	25%	- Balance of Payments and International Monetary System 1. Fixed vs floating exchange rates, IMF, World Bank 2. Current account, capital account, official reserves - Foreign Exchange Markets 1. Hedging and risk management 2. Exchange rate determination, currency regimes
International Trade Theory and Policy	25%	- Trade Policies and Barriers 1. Tariffs, quotas, subsidies, embargoes 2. Economic integration: EU, USMCA, ASEAN - Classical and Modern Trade Theories 1. Heckscher-Ohlin, Product life-cycle, Strategic trade theory 2. Absolute advantage, Comparative advantage
Macroeconomics for Managers	10%	- Economic Indicators and Policies 1. GDP, inflation, unemployment, business cycles 2. Fiscal and monetary policy impacts
Foreign Direct Investment and Global Strategy	20%	- Global Business Strategy 1. Strategic positions: Defender, Extender, Contender, Dodger 2. Porter's Diamond model - Foreign Direct Investment (FDI) 1. Theories of FDI, costs and benefits 2. Location advantages and entry modes
Foundations of Global Economics	20%	- Economic Systems and Institutions 1. Market, command, and mixed economies 2. Political, legal, and cultural frameworks - Views on Globalization 1. Drivers and consequences of globalization 2. New view, Evolutionary view, Pendulum view

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WGU Global Economics for Managers (C211, UZC2) Sample Questions (Q84-Q89):

NEW QUESTION # 84
A shopper purchases a shirt for $17 but was willing to pay $25. What does this indicate?

A. The producer surplus is $25.
B. The producer surplus is $17.
C. The consumer surplus is $8.
D. The consumer surplus is $25.

Answer: C

Explanation:
InGlobal Economics for Managers,consumer surplusis defined as the difference betweenwhat a consumer is willing to payfor a good andwhat the consumer actually pays, making option A correct.
In this example, the shopper was willing to pay $25 but paid only $17. The consumer surplus is therefore:
Consumer Surplus = Willingness to Pay # Price Paid
Consumer Surplus = $25 # $17 = $8
This $8 represents the net benefit the consumer gains from the transaction. Consumer surplus captures the idea that consumers often value goods more than the market price, and the difference contributes to their economic welfare.
Options B and C incorrectly refer to producer surplus, which depends on production costs rather than consumer willingness to pay. Option D incorrectly states that consumer surplus equals $25, which is the maximum willingness to pay, not the surplus.
Global Economics for Managersuses consumer surplus extensively to evaluate the effects of price changes, taxes, and trade policies on consumer welfare. Thus, option A is correct.

NEW QUESTION # 85
What is true about forward transactions?

A. They allow participants to buy and sell currencies now for future delivery.
B. They are the classic single-shot exchange of one currency for another.
C. They convert one currency into another at one time with an agreement to revert it back at another time in the future.
D. They allow traders to sell currency holdings at an exchange rate in the past.

Answer: A

Explanation:
Forward transactions are foreign exchange contracts in which two parties agree today to exchange currencies at a specified rate on a future date. Option A is correct because the transaction terms are set now, but delivery occurs later. Managers use forward transactions to reduce exchange-rate uncertainty when they expect to receive or pay foreign currency in the future. Option B describes a spot transaction, where currencies are exchanged immediately or within a very short settlement period. Option C describes a swap transaction, which combines an exchange now with a reverse exchange later. Option D is incorrect because forward transactions do not allow trading at a past exchange rate. They lock in a future exchange rate based on current agreement.

NEW QUESTION # 86
What is one benefit of small-scale entries into foreign markets?

A. They focus on learning by doing while limiting the downside risk.
B. They give complete equity and operational control.
C. They demonstrate a strategic commitment to certain markets.
D. They present easy opportunities to build market share.

Answer: A

Explanation:
Small-scale entry allows a firm to enter a foreign market cautiously, gain experience, and learn about local demand, institutions, competitors, distribution channels, and regulatory conditions without committing excessive capital. Option C is correct because learning by doing while limiting downside risk is the central advantage of small-scale entry. This approach is useful when market uncertainty is high or when managers lack reliable local knowledge. Option A is more consistent with large-scale entry, which signals major strategic commitment. Option B is incorrect because small-scale entry does not necessarily provide full control, especially if the firm uses partnerships, exporting, or limited investment. Option D is too optimistic because small-scale entry may limit speed and market-share growth. Its main benefit is controlled learning.

NEW QUESTION # 87
Which good tends to have elastic demand?

A. A good that is tangible
B. A good with many complements
C. A good with close substitutes
D. A good with few complements

Answer: C

Explanation:
A good with close substitutes tends to have elastic demand because consumers can easily switch to another product when its price rises. Option A is correct. Elastic demand means quantity demanded responds strongly to price changes. For example, if one brand of bottled water increases in price and many similar brands are available, consumers can quickly shift purchases. This makes the seller more constrained when raising prices.
Goods with few substitutes, necessities, or small budget shares tend to have less elastic demand.
Complements affect cross-price relationships, but having many or few complements does not directly define whether demand for the good itself is elastic. Tangibility also does not determine elasticity. For managers, elasticity is critical because it affects pricing strategy, revenue forecasting, and competitive positioning.

NEW QUESTION # 88
What are features shared by monopolies and perfect competition? (Choose TWO.)

A. In the long run, new firms can easily enter the market.
B. In the long run, it is nearly impossible for new firms to enter.
C. Price is greater than marginal cost.
D. Maximum profit occurs when marginal revenue equals marginal cost.
E. The structure does not produce the welfare-maximizing level of output.
F. Firms earn economic profits in the short run.

Answer: D,F

Explanation:
In Global Economics for Managers , monopolies and perfectly competitive firms share two important features: profit maximization at MR = MC and the ability to earn economic profits in the short run , making options E and F correct.
Option E applies universally: all firms maximize profit where marginal revenue equals marginal cost , regardless of market structure. This decision rule guides output choices in both monopoly and perfect competition.
Option F is also correct because firms in both structures can earn economic profits in the short run . In perfect competition, short-run profits attract new entrants, while monopolies may sustain profits longer due to entry barriers.
Options A and B distinguish the two structures. Option C applies only to monopoly. Option D applies only to monopoly, not perfect competition.
Thus, options E and F correctly identify shared features.

NEW QUESTION # 89
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