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

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

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WGU Global Economics for Managers (C211, UZC2) Sample Questions (Q50-Q55):

NEW QUESTION # 50
Which statement best summarizes the overall economic effect of tariffs?

A. They increase total economic surplus
B. They transfer surplus from consumers to producers and the government
C. They benefit consumers more than producers
D. They eliminate inefficiencies in global trade

Answer: B

Explanation:
InGlobal Economics for Managers, tariffs are shown toredistribute economic surplus, making option C correct. When a tariff is imposed, consumers lose surplus due to higher prices, while domestic producers gain surplus and the government collects tariff revenue.
However, the gains to producers and government do not fully offset consumer losses, resulting in deadweight loss. Thus, tariffs reduce total economic welfare even though certain groups benefit.
Options A, B, and D are incorrect.
Therefore, option C accurately summarizes the overall economic effect of tariffs.

NEW QUESTION # 51
Which company has a natural resource-seeking strategic goal?

A. A company searching for a location with a large consumer market
B. A company searching for a location where labor costs are low
C. A company searching for a location where there is an abundance of oil
D. A company searching for a location with advanced technology clusters

Answer: C

Explanation:
In Global Economics for Managers , a natural resource-seeking strategy refers to firms that engage in foreign direct investment to access specific natural resources that are unavailable or costly in their home country. Option C correctly reflects this motive.
Companies in industries such as oil, gas, mining, agriculture, and timber often locate operations where resources are naturally abundant. The primary objective is to secure reliable and cost-effective access to essential inputs for production.
Option A describes a cost-seeking strategy, option B a market-seeking strategy, and option D a strategic asset- seeking strategy.
Thus, option C correctly identifies a natural resource-seeking strategic goal.

NEW QUESTION # 52
Which company has a natural resource-seeking strategic goal?

A. A company searching for a location with a large consumer market
B. A company searching for a location where labor costs are low
C. A company searching for a location where there is an abundance of oil
D. A company searching for a location with advanced technology clusters

Answer: C

Explanation:
InGlobal Economics for Managers, anatural resource-seeking strategyrefers to firms that engage in foreign direct investment toaccess specific natural resourcesthat are unavailable or costly in their home country.
Option C correctly reflects this motive.
Companies in industries such as oil, gas, mining, agriculture, and timber often locate operations where resources are naturally abundant. The primary objective is to secure reliable and cost-effective access to essential inputs for production.
Option A describes a cost-seeking strategy, option B a market-seeking strategy, and option D a strategic asset- seeking strategy.
Thus, option C correctly identifies a natural resource-seeking strategic goal.

NEW QUESTION # 53
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. Several businesses relocate overseas because of a new domestic tax policy that will increase their tax liability by 15%.
D. 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.

Answer: C

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 # 54
In which mode of entry do companies build new factories and offices from scratch?

A. Co-marketing operations
B. Joint ventures
C. Direct exports
D. Greenfield operations

Answer: D

Explanation:
InGlobal Economics for Managers,greenfield operationsrefer to a mode of foreign market entry in which companiesbuild new factories and offices from scratch, making option D the correct answer. This approach represents the most direct and investment-intensive form of foreign direct investment.
Greenfield operations allow firms complete control over design, technology, management practices, and corporate culture. By starting from the ground up, companies can implement global standards, protect proprietary technologies, and tailor operations to strategic objectives. This mode of entry is commonly used when firms seek long-term presence in a foreign market and when suitable acquisition targets are unavailable.
Option A, co-marketing operations, involves collaborative marketing efforts rather than production investment. Option B, direct exports, requires no foreign production facilities. Option C, joint ventures, involve shared ownership and management rather than full control.
Global Economics for Managersnotes that while greenfield investments offer high control and potential efficiency, they also involve high costs, longer setup times, and greater exposure to political and economic risks. Managers must weigh these trade-offs carefully when choosing an entry mode.
Thus, option D correctly identifies the mode of entry in which firms build new facilities from scratch.

NEW QUESTION # 55
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