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| Section | Objectives |
|---|---|
| Global Economics | - Global economic institutions and trade policy - Exchange rates and currency systems - International trade and comparative advantage |
| Managerial Economic Decision-Making | - Cost-benefit analysis in business contexts - Risk and uncertainty in global markets |
| Macroeconomic Environment | - GDP, inflation, and unemployment - Fiscal and monetary policy |
| Microeconomics for Managers | - Elasticity and pricing decisions - Supply and demand analysis - Market structures and competition |
| Foundations of Economics | - Market systems and economic models - Scarcity, opportunity cost, and economic reasoning |
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NEW QUESTION # 22
What is a feature of a democracy?
Answer: A
Explanation:
A democracy gives citizens the right to elect representatives who govern on their behalf. Option D is correct because political participation, representative government, accountability, and civil liberties are core features of democratic systems. Democracies generally have institutional checks and balances, rule of law, and mechanisms for peaceful leadership change. These features can reduce arbitrary government action and improve transparency for businesses. Option B describes totalitarianism, where one person or party holds absolute political control. Option C describes a political risk that may occur in some countries but is not a defining feature of democracy. Option A is also incorrect because democracies usually reduce extreme political uncertainty compared with authoritarian systems, although policy changes can still affect firms. The defining feature is citizen representation through elections.
NEW QUESTION # 23
In an oligopoly with an initial agreement to maximize total profit, which statements might a firm motivated by self-interest likely make? (Choose THREE.)
Answer: A,C,E
Explanation:
InGlobal Economics for Managers, oligopolies often face aprisoner's dilemma, making deviation from collusive agreements individually rational. Options A, B, and C correctly reflect this logic.
If others cooperate, cheating by increasing output raises individual profit. If others cheat, matching their behavior minimizes losses. Therefore, regardless of others' actions, raising output appears optimal.
Options D and E contradict self-interested incentives.
Thus, A, B, and C correctly capture oligopolistic behavior.
NEW QUESTION # 24
When an import tariff is placed on footwear, which quantity increases?
Answer: C
Explanation:
InGlobal Economics for Managers, animport tariffraises the domestic price of the imported good, making producer surplus for domestic producers increase, which makes option B correct.
When a tariff is imposed on imported footwear, foreign suppliers face higher costs, reducing imports.
Domestic producers benefit from reduced competition and higher market prices, allowing them to increase output and earn higher surplus.
Option A is incorrect because imports decrease. Option C is incorrect because higher prices reduce domestic demand. Option D is incorrect because consumer surplus falls due to higher prices and fewer choices.
Tariffs redistribute surplus from consumers to producers and the government, while also creating deadweight loss. Thus, option B is correct.
NEW QUESTION # 25
Point A is on the same indifference curve as Point B. What can be said about the points?
Answer: C
Explanation:
InGlobal Economics for Managers, anindifference curverepresents all combinations of goods that provide the same level of satisfaction (utility)to a consumer. If Point A and Point B lie on the same indifference curve, the consumer isindifferentbetween the two bundles, making option B correct.
This means the consumer derives equal satisfaction from either bundle and has no preference for one over the other. Movement along an indifference curve reflects trade-offs between goods while maintaining constant utility.
Options A and D relate to cost, which is irrelevant to indifference curves. Option C is incorrect because preference differences occur only when points lie on different indifference curves.
Thus, option B correctly describes the implication of two points on the same indifference curve.
NEW QUESTION # 26
Which statement about the GDP deflator is true?
Answer: B
Explanation:
InGlobal Economics for Managers, theGDP deflatoris a price index used to measureinflation, making option A correct. The percentage change in the GDP deflator from one year to the next reflects the overall inflation rate of domestically produced goods and services.
The GDP deflator is calculated as:
GDP Deflator = (Nominal GDP / Real GDP) × 100
Because it includes all goods and services produced domestically, it provides a broad measure of price changes across the economy. Unlike the CPI, it is not based on a fixed basket of goods.
Option B is incorrect because real GDP, not the GDP deflator, is used to assess economic well-being. Option C is incorrect because the GDP deflator is derived from the same GDP components. Option D is incorrect because the deflator generally increases over time due to inflation.
Thus, option A is correct.
NEW QUESTION # 27
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