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| Section | Objectives |
|---|---|
| Managerial Economic Decision-Making | - Risk and uncertainty in global markets - Cost-benefit analysis in business contexts |
| Global Economics | - International trade and comparative advantage - Exchange rates and currency systems - Global economic institutions and trade policy |
| Foundations of Economics | - Market systems and economic models - Scarcity, opportunity cost, and economic reasoning |
| Macroeconomic Environment | - GDP, inflation, and unemployment - Fiscal and monetary policy |
| Microeconomics for Managers | - Market structures and competition - Supply and demand analysis - Elasticity and pricing decisions |
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NEW QUESTION # 111
Direct exports have which advantage?
Answer: A
Explanation:
InGlobal Economics for Managers,direct exportingallows firms tocapitalize on economies of scale in production in the home country, making option B correct.
By concentrating production domestically, firms can achieve lower average costs, maintain quality control, and leverage existing facilities and expertise. Direct exporting avoids the fixed costs of establishing foreign production facilities.
Options A, C, and D are incorrect because exporting typically involves transportation costs, limited distribution control, and exposure to exchange rate risk.
Thus, option B correctly identifies a key advantage of direct exporting.
NEW QUESTION # 112
What happens when the Federal Reserve increases the money supply?
Answer: A
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 # 113
What are examples of fixed costs? (Choose TWO.)
Answer: B,E
Explanation:
InGlobal Economics for Managers,fixed costsare costs that do not vary with the level of output in the short run, making optionsC and Dcorrect.
Option C, astate license fee, is fixed because it must be paid regardless of how much output is produced.
Option D,monthly internet service, is also fixed since the cost remains constant even if production rises or falls.
Options A, B, and E arevariable costsbecause they increase as output increases. Sales commissions depend on sales volume, flour usage depends on bread production, and parts costs rise with the number of devices produced.
Understanding fixed costs is essential for break-even analysis and short-run production decisions. Thus, C and D are correct.
NEW QUESTION # 114
How does the Federal Reserve lower the federal funds rate?
Answer: C
Explanation:
InGlobal Economics for Managers, the Federal Reserve lowers thefederal funds ratebypurchasing government bonds, making option C correct.
Bond purchases increase bank reserves, easing liquidity conditions in the interbank market. With more reserves available, banks lend to each other at lower interest rates, reducing the federal funds rate.
Options A and B raise interest rates, while option D is fiscal policy.
Therefore, option C is correct.
NEW QUESTION # 115
What is the Nash equilibrium?
Answer: D
Explanation:
A Nash equilibrium occurs when each participant in a strategic interaction chooses the best available strategy given the strategies chosen by others. Option C is correct because no actor has an incentive to change its strategy unilaterally once the equilibrium is reached. This concept is central to game theory and is especially useful in oligopoly analysis, where firms must consider how rivals will respond to pricing, output, advertising, or product decisions. Option A describes the prisoner's dilemma more specifically, which can produce a Nash equilibrium but is not the definition itself. Option B describes collusion or cartel behavior. Option D describes illegal coordinated action by firms. Managers use Nash equilibrium logic to anticipate competitor behavior and understand why mutually beneficial cooperation can be unstable.
NEW QUESTION # 116
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