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

Section	Objectives
Topic 1: Key Topics Across All Competencies	- International Trade Policies (Tariffs, Quotas) - Supply and Demand Shifts - Global Business Strategies and Porter's Framework - Foreign Direct Investment (FDI) Impacts - Currency Appreciation and Depreciation - Elastic vs. Inelastic Goods
Topic 2: Competency 2: Political and Economic Forces	- Market Economy vs. Command Economy - Property Rights and the Rule of Law
Topic 3: Competency 1: International Trade and Currency Exchange	- Impact of Interest Rates on Financial Flows and Exchange Rates - Currency Exchange Rate Determination - Introduction to International Trade Theories
Topic 4: Competency 3: Economic Decision-Making by Firms and Customers	- Consumer Behavior (Budget Constraint, Indifference Curves) - Firm Behavior Under Different Market Structures (Perfect Competition, Monopoly, Oligopoly)

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

NEW QUESTION # 50
What are characteristics of a market economy? (Choose TWO.)

A. Supply, demand, and pricing are planned by the government.
B. It found a near ideal in China and the former Soviet Union during communism.
C. Factors of production are government-owned or state-owned.
D. It was first noted by Adam Smith inThe Wealth of Nationsin 1776.
E. It is characterized by the "invisible hand" of market forces.
F. It is defined by a government taking the authoritative role in the economy.

Answer: D,E

Explanation:
InGlobal Economics for Managers, amarket economyis characterized by decentralized decision making and reliance on market forces, making optionsB and Ecorrect.
Option B is correct becauseAdam Smith, inThe Wealth of Nations(1776), laid the intellectual foundation for market economies. He argued that individuals pursuing their own self-interest unintentionally promote the overall welfare of society.
Option E correctly identifies the"invisible hand", a central concept in market economies. Prices, supply, and demand coordinate economic activity without centralized planning. Firms decide what to produce based on profitability, and consumers decide what to buy based on preferences and prices.
Options A, C, D, and F describecommand economies, where governments control production, pricing, and resource ownership-characteristics inconsistent with market economies.
Thus, B and E accurately describe defining features of a market economy.

NEW QUESTION # 51
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. 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.
B. 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.
C. 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.
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 # 52
What is true about forward transactions?

A. They convert one currency into another at one time with an agreement to revert it back at another time in the future.
B. They are the classic single-shot exchange of one currency for another.
C. They allow participants to buy and sell currencies now for future delivery.
D. They allow traders to sell currency holdings at an exchange rate in the past.

Answer: C

Explanation:
Forward transactions are foreign exchange contracts in which two parties agree today to exchange currencies at a specified rate on a future date. Option A is correct because the transaction terms are set now, but delivery occurs later. Managers use forward transactions to reduce exchange-rate uncertainty when they expect to receive or pay foreign currency in the future. Option B describes a spot transaction, where currencies are exchanged immediately or within a very short settlement period. Option C describes a swap transaction, which combines an exchange now with a reverse exchange later. Option D is incorrect because forward transactions do not allow trading at a past exchange rate. They lock in a future exchange rate based on current agreement.

NEW QUESTION # 53
What is a characteristic of a market economy?

A. Prices are fixed by the government.
B. Resources are allocated through quotas.
C. Factors of production are privately owned.
D. Central planning determines production decisions.

Answer: C

Explanation:
InGlobal Economics for Managers, amarket economyis characterized byprivate ownership of the factors of production, making option B correct. Individuals and firms own land, labor, capital, and entrepreneurship, and decisions are guided by market prices rather than central planning.
Private ownership creates incentives for efficiency, innovation, and investment. Prices emerge from supply and demand, coordinating economic activity through what Adam Smith described as the "invisible hand." Options A, C, and D describe command economies, not market economies.
Thus, option B correctly identifies a defining feature of a market economy.

NEW QUESTION # 54
Which statement describes turnkey projects?

A. Two companies agree to mutually refer customers.
B. Clients pay contractors to design and construct new facilities and train personnel.
C. Companies build new factories and offices from scratch.
D. Two or more parent companies create and own a new entity.

Answer: B

Explanation:
A turnkey project is an entry mode in which a contractor designs, constructs, and prepares a facility for operation, then hands it over to the client when it is ready to run. Option B is correct because it includes both construction and personnel training, which are typical elements of turnkey arrangements. These projects are common in complex industries such as energy, infrastructure, manufacturing, and industrial facilities where specialized technical knowledge is required. Option A describes a joint venture, not a turnkey project. Option C describes a referral or co-marketing arrangement. Option D describes greenfield investment, where a company builds its own new facilities from scratch. Turnkey projects allow firms to profit from expertise while limiting long-term ownership exposure.

NEW QUESTION # 55
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