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

Section	Objectives
Topic 1: Key Topics Across All Competencies	- Foreign Direct Investment (FDI) Impacts - Elastic vs. Inelastic Goods - Currency Appreciation and Depreciation - Global Business Strategies and Porter's Framework - International Trade Policies (Tariffs, Quotas) - Supply and Demand Shifts
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	- Market Economy vs. Command Economy - Property Rights and the Rule of Law
Topic 4: Competency 1: International Trade and Currency Exchange	- Introduction to International Trade Theories - Impact of Interest Rates on Financial Flows and Exchange Rates - Currency Exchange Rate Determination

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WGU Global Economics for Managers (C211, UZC2) Sample Questions (Q134-Q139):

NEW QUESTION # 134
The formula "fixed costs (FC) + variable costs (VC)" represents which quantity?

A. Total cost
B. Marginal cost
C. Implicit cost
D. Average cost

Answer: A

Explanation:
InGlobal Economics for Managers,total cost (TC)is defined as the sum offixed costs (FC)andvariable costs (VC), making option C correct. The formula is:
TC = FC + VC
Fixed costs do not change with output in the short run, while variable costs vary with production. Total cost captures the full cost of producing a given level of output.
Average cost divides total cost by quantity, marginal cost measures the cost of one additional unit, and implicit cost reflects opportunity costs.
Therefore, option C correctly identifies total cost.

NEW QUESTION # 135
In order to increase the money supply, what does the Federal Reserve do?

A. Sells government bonds to the public
B. Raises the federal funds rate
C. Buys government bonds from the public
D. Increases reserve requirements

Answer: C

Explanation:
InGlobal Economics for Managers, the Federal Reserve increases the money supply primarily throughopen market operations, specifically bybuying government bonds from the public, making option C correct.
When the Fed purchases government securities, it pays banks and other sellers by crediting their reserves.
This action increases the amount of reserves in the banking system, enabling banks to extend more loans. As lending expands, the money supply grows through the money multiplier process.
Option A would decrease the money supply. Option B tightens monetary conditions. Option D reduces banks' ability to lend.
Managers should understand this mechanism because changes in the money supply affect interest rates, investment, exchange rates, and aggregate demand. Therefore, option C accurately describes how the Fed increases the money supply.

NEW QUESTION # 136
What are properties of a typical indifference curve? (Choose TWO.)

A. Indifference curves slope upward.
B. Indifference curves can intersect.
C. Indifference curves do not cross.
D. Higher indifference curves are preferred to lower ones.

Answer: C,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 # 137
Managers and firms rationally pursue their interests and make choices within institutional constraints. This is one of the two core propositions underpinning an institution-based view of global business. Which situation illustrates this proposition?

A. When a company opens a new production facility, company leaders find out that the laws of that country may allow it to skip several important safety steps. In doing so, the cost of production goes down, but there is a risk to the surrounding environment. The leaders decide not to skip these safety steps out of a deep concern and commitment to environmental protection.
B. Two failing banks are pursuing the option of being acquired by another institution. One bank is able to leverage political relationships to result in a successful acquisition. The other bank pursues no such political solution and eventually files for bankruptcy.
C. Government corruption is rampant in a particular country, leading to a high cost of doing business.However, some smaller companies have figured out how to legally evade the most fraudulent abuses, and for them the cost of doing business becomes much cheaper. For this reason, the companies stay and have a lucrative decade.
D. Several businesses relocate overseas because of a new domestic tax policy that will increase their tax liability by 15%.

Answer: D

Explanation:
Option B best illustrates managers and firms rationally pursuing their interests within institutional constraints.
A new domestic tax policy changes the formal institutional environment by increasing firms' expected tax burden. The firms respond rationally by relocating overseas to reduce costs and protect profitability. This is exactly how the institution-based view explains business behavior: institutions create rules and constraints, and firms choose strategies that improve outcomes within those constraints. Option A emphasizes political connections, but it is less direct because it focuses on unequal access to influence rather than a broad institutional constraint. Option C illustrates informal ethical constraints overriding weak formal rules. Option D involves operating around corruption, but B is the clearest case of formal institutional change causing rational firm relocation.

NEW QUESTION # 138
What are characteristics of monopolistic competition? (Choose THREE.)

A. One seller
B. Product differentiation
C. Homogeneous products
D. Many sellers
E. Free entry and exit

Answer: B,D,E

Explanation:
InGlobal Economics for Managers,monopolistic competitionis characterized bymany sellers,product differentiation, andfree entry and exit, making options A, B, and C correct.
Firms sell products that are similar but not identical, allowing them some degree of pricing power. Examples include restaurants, clothing brands, and personal services. Because entry is relatively easy, economic profits tend to be eliminated in the long run.
Options D and E describe monopoly or perfect competition, not monopolistic competition.
Thus, A, B, and C correctly describe monopolistic competition.

NEW QUESTION # 139
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