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

SectionWeightObjectives
Macroeconomics for Managers10%- Economic Indicators and Policies
  • 1. GDP, inflation, unemployment, business cycles
  • 2. Fiscal and monetary policy impacts
Foundations of Global Economics20%- Economic Systems and Institutions
  • 1. Political, legal, and cultural frameworks
  • 2. Market, command, and mixed economies
- Views on Globalization
  • 1. New view, Evolutionary view, Pendulum view
  • 2. Drivers and consequences of globalization
Foreign Direct Investment and Global Strategy20%- Global Business Strategy
  • 1. Strategic positions: Defender, Extender, Contender, Dodger
  • 2. Porter's Diamond model
- Foreign Direct Investment (FDI)
  • 1. Theories of FDI, costs and benefits
  • 2. Location advantages and entry modes
Global Finance and Monetary Systems25%- Foreign Exchange Markets
  • 1. Exchange rate determination, currency regimes
  • 2. Hedging and risk management
- Balance of Payments and International Monetary System
  • 1. Fixed vs floating exchange rates, IMF, World Bank
  • 2. Current account, capital account, official reserves
International Trade Theory and Policy25%- Classical and Modern Trade Theories
  • 1. Heckscher-Ohlin, Product life-cycle, Strategic trade theory
  • 2. Absolute advantage, Comparative advantage
- Trade Policies and Barriers
  • 1. Economic integration: EU, USMCA, ASEAN
  • 2. Tariffs, quotas, subsidies, embargoes

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WGU Global Economics for Managers (C211, UZC2) Sample Questions (Q116-Q121):

NEW QUESTION # 116
When there is an expectation of lower income in the future, what is the effect on the demand curve for a normal good?

Answer: D

Explanation:
InGlobal Economics for Managers, demand for anormal goodincreases with income and decreases when income falls. If consumers expectlower future income, demand for normal goods decreases, causing the demand curve to shift left, making option A correct.
A leftward shift indicates that at every price, consumers are willing and able to purchase less of the good.
Expectations about future income influence present consumption decisions, especially for durable and discretionary goods.
Options C and D incorrectly describe movement along a demand curve rather than a shift. Option B would apply if income were expected to rise.
Therefore, option A is correct.


NEW QUESTION # 117
Which mode of entry is an equity-based entry mode?

Answer: C

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 # 118
Which characteristic is attributed to totalitarianism?

Answer: A

Explanation:
InGlobal Economics for Managers,totalitarianismis characterized by theconcentration of absolute political power in the hands of a single individual or a single ruling party, making option D the correct answer.
Under a totalitarian system, political authority is centralized, dissent is suppressed, and the state seeks to control not only political life but often economic, social, and ideological aspects of society as well.
Unlike democratic systems, totalitarian regimes do not permit free elections, political pluralism, or meaningful checks and balances. Citizens are not granted the right to elect representatives, nor are freedoms of expression, association, or organization protected. Instead, political opposition is restricted or eliminated, and state power is maintained through coercion, propaganda, and control of institutions.
Option A is incorrect because totalitarian systems generally involvehigh political risk, particularly for firms, due to arbitrary policy changes, expropriation risk, and weak legal protections. Option B describes liberal democratic systems that emphasize civil liberties. Option C is a defining feature of representative democracies, not totalitarian regimes.
Global Economics for Managersstresses that totalitarianism presents significant challenges for global managers. While such systems may offer short-term stability or rapid decision making, they often involve unpredictable policy shifts, weak protection of property rights, and limited transparency. These conditions increase political risk and complicate long-term business planning.
Therefore, option D correctly identifies the defining characteristic of totalitarianism as the delegation of absolute political control to one person or party.


NEW QUESTION # 119
What are three characteristics of industries primed for collusion? (Choose THREE.)

Answer: B,C,E

Explanation:
In Global Economics for Managers, industries that are primed for collusion typically possess structural features that make coordination among firms easier and more profitable. Three such characteristics are a small number of rivals, the presence of a price leader, and homogeneous products, making options A, B, and C correct.
A small number of rivals simplifies coordination. When only a few firms dominate a market, each firm can easily monitor competitors' actions and detect deviations from agreed-upon pricing or output levels. This increases the sustainability of collusive behavior.
A price leader often emerges in oligopolistic industries. One dominant firm sets prices, and others follow, reducing uncertainty and facilitating tacit collusion without explicit agreements. Price leadership helps firms avoid price wars while maintaining higher profits.
Homogeneous products further support collusion because firms compete primarily on price rather than product differentiation. When products are identical, undercutting prices becomes the main competitive tool, making collusion attractive as a way to stabilize prices and profits.
Options D, E, and F reduce the likelihood of collusion. Product differentiation weakens coordination, informed consumers intensify competition, and free entry undermines collusive agreements by attracting new competitors.
Thus, A, B, and C correctly identify characteristics of industries prone to collusion.


NEW QUESTION # 120
A country has experienced a decrease in inflation. What is the effect on the country's currency exchange rate?

Answer: C

Explanation:
In Global Economics for Managers, a decrease in inflation generally leads to an appreciation of a country's currency, making option C correct.
Lower inflation increases the purchasing power of a country's currency relative to others. As domestic prices rise more slowly than foreign prices, exports become more competitive, and demand for the currency increases. Under purchasing power parity, lower inflation is associated with currency appreciation.
Options A, B, and D contradict established exchange rate theory.
Therefore, option C is correct.


NEW QUESTION # 121
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