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| Section | Objectives |
|---|---|
| Topic 1: Competency 1: International Trade and Currency Exchange | - Introduction to International Trade Theories - Currency Exchange Rate Determination - Impact of Interest Rates on Financial Flows and Exchange Rates |
| Topic 2: Competency 3: Economic Decision-Making by Firms and Customers | - Firm Behavior Under Different Market Structures (Perfect Competition, Monopoly, Oligopoly) - Consumer Behavior (Budget Constraint, Indifference Curves) |
| Topic 3: Competency 2: Political and Economic Forces | - Property Rights and the Rule of Law - Market Economy vs. Command Economy |
| Topic 4: Key Topics Across All Competencies | - International Trade Policies (Tariffs, Quotas) - Foreign Direct Investment (FDI) Impacts - Currency Appreciation and Depreciation - Elastic vs. Inelastic Goods - Global Business Strategies and Porter's Framework - Supply and Demand Shifts |
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NEW QUESTION # 47
Which effect does increased government spending have on aggregate demand if the multiplier effect is greater than the crowding-out effect?
Answer: C
Explanation:
In Global Economics for Managers , when the multiplier effect exceeds the crowding-out effect , increased government spending causes aggregate demand (AD) to rise by more than the initial increase in spending
, making option A correct.
The multiplier effect occurs because government spending generates income, which leads to further consumption. Crowding out occurs when government borrowing raises interest rates and reduces private investment. If the multiplier is stronger, the net effect is an amplified increase in AD.
Thus, option A is correct.
NEW QUESTION # 48
The marginal cost of producing a computer is $600, but the marginal revenue is $1,000. What is the best action for the respective firm?
Answer: A
Explanation:
According toGlobal Economics for Managers, firms shouldincrease production when marginal revenue (MR) exceeds marginal cost (MC), making option C correct.
In this case, MR = $1,000 and MC = $600. Producing one additional unit generates more revenue than cost, increasing profit by $400. Rational, profit-maximizing firms should continue expanding output as long as MR
> MC.
This decision rule applies across market structures, including monopoly, oligopoly, and perfect competition.
The firm should stop increasing production only when MR equals MC.
Options A, B, and D would cause the firm to forgo profitable opportunities.
Thus, option C is the correct managerial response.
NEW QUESTION # 49
What are properties of a typical indifference curve? (Choose TWO.)
Answer: B,D
Explanation:
InGlobal Economics for Managers, indifference curves have two key properties:higher curves represent higher utility, andcurves do not cross, making options A and C correct.
If curves crossed, preferences would be inconsistent. Higher curves indicate greater satisfaction.
Options B and D violate consumer theory assumptions.
Thus, A and C are correct.
NEW QUESTION # 50
When demand decreases and supply stays the same, what happens to the equilibrium point of price and quantity? (Choose TWO.)
Answer: C,D
Explanation:
InGlobal Economics for Managers, a decrease in demand with supply unchanged leads to alower equilibrium price and a lower equilibrium quantity, making options B and D correct.
A leftward shift of the demand curve creates excess supply at the original price. To eliminate the surplus, prices fall, and quantity exchanged decreases until a new equilibrium is reached.
Options A and C contradict standard supply-demand analysis.
Thus, B and D are correct.
NEW QUESTION # 51
What is true about tariffs?
Answer: D
Explanation:
InGlobal Economics for Managers, tariffs are recognized as a policy tool thatallows governments to raise revenue, making option C correct.
Tariffs generate revenue by taxing imported goods. While domestic producers may benefit and governments gain revenue, consumers lose due to higher prices and reduced choices. Tariffs also create deadweight loss, reducing overall economic efficiency.
Options A, B, and D contradict standard trade theory.
Therefore, option C is correct.
NEW QUESTION # 52
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