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

Section	Weight	Objectives
Topic 1: Foreign Direct Investment and Global Strategy	20%	- Foreign Direct Investment (FDI) 1. Location advantages and entry modes 2. Theories of FDI, costs and benefits - Global Business Strategy 1. Strategic positions: Defender, Extender, Contender, Dodger 2. Porter's Diamond model
Topic 2: Macroeconomics for Managers	10%	- Economic Indicators and Policies 1. GDP, inflation, unemployment, business cycles 2. Fiscal and monetary policy impacts
Topic 3: International Trade Theory and Policy	25%	- Classical and Modern Trade Theories 1. Heckscher-Ohlin, Product life-cycle, Strategic trade theory 2. Absolute advantage, Comparative advantage - Trade Policies and Barriers 1. Tariffs, quotas, subsidies, embargoes 2. Economic integration: EU, USMCA, ASEAN
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: Foundations of Global Economics	20%	- Views on Globalization 1. New view, Evolutionary view, Pendulum view 2. Drivers and consequences of globalization - Economic Systems and Institutions 1. Market, command, and mixed economies 2. Political, legal, and cultural frameworks

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WGU Global Economics for Managers (C211, UZC2) Sample Questions (Q114-Q119):

NEW QUESTION # 114
Which effect does increased government spending have on aggregate demand if the multiplier effect is greater than the crowding-out effect?

A. Aggregate demand decreases by more than the increase in government spending.
B. Aggregate demand increases by less than the increase in government spending.
C. Aggregate demand decreases by less than the increase in government spending.
D. Aggregate demand increases by more than the increase in government spending.

Answer: D

Explanation:
InGlobal Economics for Managers, when themultiplier effect exceeds the crowding-out effect, increased government spending causesaggregate 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 # 115
What is an example of a company that is market-seeking?

A. A company searching for a location where a specific type of plastic is low-cost and readily available
B. A company searching for a location where rocks and minerals can be mined
C. A company searching for a location where the cost of unskilled labor is low
D. A company searching for a location where there is a high interest in camping supplies

Answer: D

Explanation:
InGlobal Economics for Managers, amarket-seeking companyis one that invests in or enters a foreign location primarily toserve local or regional customers, making option C the correct answer. Market-seeking behavior is driven by demand-side considerations rather than cost or resource availability.
Option C describes a firm searching for a location where there ishigh consumer interest in camping supplies
, which directly reflects a desire to access and serve a specific market. Such firms are motivated by factors like market size, growth potential, consumer preferences, and proximity to customers. Market-seeking firms often establish foreign subsidiaries, sales offices, or production facilities to adapt products to local tastes and respond quickly to demand.
Option A describes aresource-seekingfirm, focused on obtaining low-cost or specialized inputs. Option B also reflects resource-seeking behavior, specifically in extractive industries. Option D describes acost-seeking (efficiency-seeking)firm that locates production in regions with low labor costs.
Global Economics for Managersclassifies foreign direct investment motives into market-seeking, resource- seeking, efficiency-seeking, and strategic asset-seeking. Market-seeking investment is particularly common in consumer goods and service industries, where understanding local preferences is critical for success.
For managers, recognizing market-seeking motives helps guide decisions about location, marketing strategy, and product adaptation. Thus, option C accurately illustrates a market-seeking company.

NEW QUESTION # 116
Costs that do not vary with output quantity divided by the quantity of output is best described by which term?

A. Average fixed cost
B. Marginal cost
C. Total cost
D. Average variable cost

Answer: A

Explanation:
Average fixed cost is calculated by dividing fixed costs by the quantity of output. Fixed costs are costs that do not change with production volume in the short run, such as rent, certain license fees, salaried administrative expenses, or fixed internet service costs. Option D is correct because the question specifically says "costs that do not vary with output quantity," which identifies fixed costs, and then says those costs are divided by quantity. Total cost equals fixed cost plus variable cost. Marginal cost is the additional cost of producing one more unit. Average variable cost divides variable costs by output. Average fixed cost usually declines as output increases because the same fixed cost is spread across more units. This is why higher production can reduce per-unit fixed cost.

NEW QUESTION # 117
Which strategy for responding to multinational enterprises is appropriate in a situation in which there is low industry pressure to globalize and competitive assets are customized to home markets?

A. Contender strategy
B. Defender strategy
C. Retainer strategy
D. Responder strategy

Answer: B

Explanation:
The defender strategy is appropriate when industry pressure to globalize is low and the firm's competitive assets are customized to the home market. In this situation, the firm does not face strong pressure to expand globally, and its strengths are mainly local, such as domestic customer relationships, local distribution knowledge, local brand reputation, or familiarity with national regulations. Option C is correct because a defender focuses on protecting its home-market position by exploiting local advantages that multinational enterprises may find difficult to copy. A contender strategy fits high globalization pressure with home-market- customized assets. An extender strategy would involve using transferable capabilities abroad, and a dodger strategy usually involves cooperating with or selling to multinational firms when pressure is high and assets are weak. Therefore, defender is the correct response.

NEW QUESTION # 118
What happens when the Federal Reserve increases the money supply?

A. The aggregate supply curve shifts to the left
B. The aggregate demand curve shifts to the left
C. The aggregate supply curve shifts to the right
D. The aggregate demand curve shifts to the right

Answer: D

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 # 119
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