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

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WGU Global Economics for Managers (C211, UZC2) Sample Questions (Q18-Q23):

NEW QUESTION # 18
Which scenario most likely describes a late mover?

A. A company is able to erect significant barriers for other entrants.
B. A company makes preemptive investments.
C. A company gains advantage through proprietary technology.
D. A company faces fewer market uncertainties.

Answer: D

Explanation:
InGlobal Economics for Managers, alate moveris a firm that enters a market after early entrants and first movers, often benefiting from reduced uncertainty, making option D the correct answer. Late movers observe the successes and failures of pioneers and can adapt their strategies accordingly.
Option D correctly reflects this advantage: late moversface fewer market uncertaintiesbecause demand patterns, customer preferences, regulatory environments, and competitive dynamics are more clearly established. This allows them to avoid costly mistakes made by early entrants and adopt proven technologies or business models.
Option A, erecting significant barriers to entry, is typically associated withfirst moverswho gain early control over key resources or distribution channels. Option B, gaining advantage through proprietary technology, also aligns more closely with early or first movers. Option C, making preemptive investments, is a classic first- mover strategy aimed at discouraging later entrants.
Global Economics for Managersemphasizes that while late movers may lack early brand recognition, they can still succeed by entering with superior products, lower costs, or more efficient processes. For managers, understanding late-mover advantages helps in timing market entry decisions and assessing competitive risks.
Therefore, option D most accurately describes a late-mover scenario.

NEW QUESTION # 19
What happens when the Federal Reserve increases the money supply?

A. The aggregate supply curve shifts to the right
B. The aggregate demand curve shifts to the left
C. The aggregate supply curve shifts to the left
D. The aggregate demand curve shifts to the right

Answer: D

Explanation:
InGlobal Economics for Managers, an increase in the money supply leads to arightward shift of the aggregate demand (AD) curve, making option B correct.
An expanded money supply lowers interest rates, encouraging borrowing and spending by households and firms. Consumption and investment rise, increasing total demand for goods and services at every price level.
Options C and D involve supply-side changes, not monetary policy effects.
Thus, option B correctly describes the macroeconomic impact of an increased money supply.

NEW QUESTION # 20
What is deadweight cost?

A. A government payment to a domestic firm
B. The lost potential from pursuing one activity at the expense of another, given the alternatives
C. A tariff levied on imports that are selling below cost in order to unfairly drive domestic firms out of business
D. A net loss that occurs in an economy as a result of tariffs

Answer: D

Explanation:
In Global Economics for Managers , deadweight cost (or deadweight loss) is defined as a net loss that occurs in an economy as a result of tariffs or other market distortions , making option D the correct answer. Deadweight cost represents the reduction in total economic surplus-consumer surplus plus producer surplus-that is not offset by gains to any other group, including the government.
When a tariff is imposed on imported goods, domestic prices rise above world prices. As a result, consumers purchase less of the good and pay higher prices, while domestic producers may increase output despite being less efficient than foreign producers. Although the government collects tariff revenue, this revenue does not fully compensate for the loss experienced by consumers and the misallocation of resources. The portion of lost surplus that is not transferred to producers or the government is the deadweight cost.
Option A is incorrect because a government payment to a domestic firm refers to a subsidy , not a deadweight cost. Option B describes an anti-dumping tariff , which is a specific trade policy instrument rather than a definition of deadweight cost. Option C defines opportunity cost , a fundamental economic concept distinct from deadweight loss.
From a managerial perspective, Global Economics for Managers emphasizes that deadweight costs signal economic inefficiency . Tariffs distort price signals, encouraging production in higher-cost domestic industries and discouraging consumption that would otherwise generate value. These inefficiencies reduce overall economic welfare and can lead to retaliation by trading partners, further magnifying losses.
Understanding deadweight cost is essential for managers operating in global markets, as it explains why protectionist policies often reduce national and global welfare despite benefiting specific interest groups.
Thus, option D accurately reflects the definition and economic significance of deadweight cost in international trade analysis.

NEW QUESTION # 21
When supply decreases and demand stays the same, what happens to the equilibrium point of price and quantity? Choose two answers.

A. Quantity decreases.
B. Price increases.
C. Price decreases.
D. Price remains the same.
E. Quantity remains the same.
F. Quantity increases.

Answer: A,B

Explanation:
When supply decreases while demand remains unchanged, the supply curve shifts left. At the original price, there is now less quantity supplied than quantity demanded, creating upward pressure on price. As price rises, consumers reduce quantity demanded until the market reaches a new equilibrium. Option A is correct because equilibrium price increases. Option E is correct because equilibrium quantity decreases. This result often occurs when input costs rise, production disruptions occur, regulation increases production costs, or natural disasters reduce available supply. Options B, C, D, and F contradict the standard supply-and-demand outcome. Managers must understand this relationship because supply disruptions can raise selling prices, reduce sales volume, affect inventory planning, and influence sourcing strategy. The basic result is higher price and lower quantity.

NEW QUESTION # 22
In which situation is the dodger strategy appropriate for responding to multinational enterprises (MNEs)?

A. There is low industry pressure to globalize, and competitive assets are transferable abroad.
B. There is high industry pressure to globalize, and competitive assets are transferable abroad.
C. There is low industry pressure to globalize, and competitive assets are customized to home markets.
D. There is high industry pressure to globalize, and competitive assets are customized to home markets.

Answer: C

Explanation:
InGlobal Economics for Managers, thedodger strategyis appropriate whenindustry pressure to globalize is low and a firm's competitive assets are customized to its home market, making option D correct.
Under this strategy, firms avoid direct confrontation with multinational enterprises by focusing on niche markets, specialized products, or protected domestic segments. Since globalization pressure is weak, firms are not forced to expand internationally, and their localized assets give them an advantage at home.
Dodgers may also cooperate selectively with MNEs or operate in areas where global competition is limited.
This strategy minimizes risk and preserves firm-specific advantages without costly global expansion.
Options A and B align with extender strategies. Option C aligns with contender strategies.
Thus, option D correctly identifies when the dodger strategy is appropriate.

NEW QUESTION # 23
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