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

Section	Weight	Objectives
Topic 1: Macroeconomics for Managers	10%	- Economic Indicators and Policies 1. Fiscal and monetary policy impacts 2. GDP, inflation, unemployment, business cycles
Topic 2: Foreign Direct Investment and Global Strategy	20%	- Foreign Direct Investment (FDI) 1. Theories of FDI, costs and benefits 2. Location advantages and entry modes - Global Business Strategy 1. Strategic positions: Defender, Extender, Contender, Dodger 2. Porter's Diamond model
Topic 3: Foundations of Global Economics	20%	- Economic Systems and Institutions 1. Market, command, and mixed economies 2. Political, legal, and cultural frameworks - Views on Globalization 1. New view, Evolutionary view, Pendulum view 2. Drivers and consequences of globalization
Topic 4: Global Finance and Monetary Systems	25%	- Balance of Payments and International Monetary System 1. Fixed vs floating exchange rates, IMF, World Bank 2. Current account, capital account, official reserves - Foreign Exchange Markets 1. Hedging and risk management 2. Exchange rate determination, currency regimes
Topic 5: 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. Heckscher-Ohlin, Product life-cycle, Strategic trade theory 2. Absolute advantage, Comparative advantage

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WGU Global Economics for Managers (C211, UZC2) Sample Questions (Q45-Q50):

NEW QUESTION # 45
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?

A. Pause production
B. Increase production
C. Decrease production
D. Exit the market

Answer: B

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 # 46
What are weaknesses of the theory of mercantilism? (Choose TWO.)

A. The theory encourages specialization and productivity growth.
B. The theory promotes free trade.
C. Application of the theory reduces national wealth in the long run.
D. The theory emphasizes comparative advantage.
E. The theory leads to inefficient allocation of resources.

Answer: C,E

Explanation:
In Global Economics for Managers, mercantilism is widely criticized for two major weaknesses: it leads to inefficient allocation of resources and reduces national wealth in the long run, making options A and B correct.
Mercantilism views global trade as a zero-sum game, where one country's gain comes at another's expense.
As a result, it emphasizes export promotion, import restrictions, and accumulation of precious metals. These policies distort market signals and push resources toward protected industries rather than their most productive uses, leading to inefficiency.
Over time, these inefficiencies reduce overall economic growth and national wealth. Protectionist measures raise prices for consumers, reduce competition, and discourage innovation. Retaliation by trading partners can further harm exports and global welfare.
Options C, D, and E describe modern trade theories, not mercantilism. Mercantilism rejects comparative advantage and free trade.
Therefore, A and B correctly identify weaknesses of mercantilism.

NEW QUESTION # 47
What are examples of variable costs? Choose two answers.

A. A $1,000 license fee charged by the state government to operate a shop
B. A 5% tax charged by the government on variable inputs
C. The monthly internet cost in a business that produces women's apparel
D. The CEO's salary for a major manufacturing firm
E. The rent paid by a magazine publisher for its creative team
F. The cost of the parts used in individual devices made by a computer manufacturer

Answer: B,F

Explanation:
Variable costs change as output changes. Option A is correct because a tax charged on variable inputs increases as the firm uses more inputs to produce more output. Option E is also correct because the cost of parts used in individual devices rises directly with the number of devices produced. If the manufacturer produces more computers, it must buy more parts; if production falls, parts costs fall. The other choices are fixed costs because they generally do not vary directly with the quantity produced in the short run. A license fee, CEO salary, rent, and monthly internet service are normally paid regardless of whether output is high or low. Managers must separate fixed and variable costs to make production, pricing, shutdown, and break-even decisions.

NEW QUESTION # 48
An import tariff is implemented on apples. What is the effect on domestic government revenue?

A. It becomes negative
B. It decreases
C. It increases
D. It remains unchanged

Answer: C

Explanation:
InGlobal Economics for Managers, animport tariffgeneratesgovernment revenue, making option C correct.
A tariff is a tax on imported goods. When apples are imported and subject to a tariff, the government collects revenue equal to the tariff rate multiplied by the quantity imported. Although the quantity of imports usually declines after a tariff is imposed, the government still earns revenue on remaining imports.
This revenue comes at the expense of consumers, who face higher prices, and contributes to deadweight loss.
However, from the government's perspective, tariff revenue increases.
Thus, option C is correct.

NEW QUESTION # 49
Which mode of entry is an equity-based entry mode?

A. Licensing
B. 50/50 joint ventures
C. Franchising
D. Indirect exports

Answer: B

Explanation:
In Global Economics for Managers , entry modes are commonly classified into non-equity , contractual , and equity-based modes, depending on the level of ownership, control, and risk assumed by the firm. A 50
/50 joint venture is an equity-based entry mode, making option B the correct answer.
Equity-based entry modes involve ownership of assets in the foreign market . In a 50/50 joint venture, two firms-typically one domestic and one foreign-each contribute capital and share ownership, control, profits, and risks equally. This structure allows firms to access local market knowledge, share financial risk, and comply with host-country regulations that may restrict full foreign ownership.
Option A, franchising, and option C, licensing, are contractual entry modes . In these arrangements, firms transfer intellectual property or business formats to foreign partners without taking ownership stakes. While these modes involve lower risk and investment, they also provide less control. Option D, indirect exports, is a non-equity mode that requires minimal commitment and no foreign ownership.
Global Economics for Managers emphasizes that equity-based modes like joint ventures are often chosen when firms need local partners, face political or regulatory constraints, or operate in culturally or institutionally complex environments. However, they also involve higher risk due to shared control and potential partner conflicts.
Thus, option B correctly identifies an equity-based mode of entry.

NEW QUESTION # 50
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