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

SectionWeightObjectives
Topic 1: Foreign Direct Investment and Global Strategy20%- Foreign Direct Investment (FDI)
  • 1. Theories of FDI, costs and benefits
  • 2. Location advantages and entry modes
- Global Business Strategy
  • 1. Porter's Diamond model
  • 2. Strategic positions: Defender, Extender, Contender, Dodger
Topic 2: 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
Topic 3: International Trade Theory and Policy25%- Classical and Modern Trade Theories
  • 1. Absolute advantage, Comparative advantage
  • 2. Heckscher-Ohlin, Product life-cycle, Strategic trade theory
- Trade Policies and Barriers
  • 1. Tariffs, quotas, subsidies, embargoes
  • 2. Economic integration: EU, USMCA, ASEAN
Topic 4: Macroeconomics for Managers10%- Economic Indicators and Policies
  • 1. Fiscal and monetary policy impacts
  • 2. GDP, inflation, unemployment, business cycles
Topic 5: Global Finance and Monetary Systems25%- Balance of Payments and International Monetary System
  • 1. Current account, capital account, official reserves
  • 2. Fixed vs floating exchange rates, IMF, World Bank
- Foreign Exchange Markets
  • 1. Hedging and risk management
  • 2. Exchange rate determination, currency regimes

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WGU Global Economics for Managers (C211, UZC2) Sample Questions (Q76-Q81):

NEW QUESTION # 76
A country has experienced a decrease in inflation. What is the effect on the country's currency exchange rate?

Answer: D


NEW QUESTION # 77
What does the Federal Reserve do to expand aggregate demand? (Choose TWO.)

Answer: B,F

Explanation:
InGlobal Economics for Managers, the Federal Reserve expands aggregate demand byincreasing the money supplyandlowering interest rates, making options B and C correct.
Increasing the money supply provides banks with more reserves, encouraging lending. Lower interest rates stimulate borrowing by households and firms, increasing consumption and investment. Both channels raise aggregate demand.
The remaining options contract demand rather than expand it. Therefore, B and C are correct.


NEW QUESTION # 78
What are examples of variable costs? Choose two answers.

Answer: A,D

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 # 79
Which mode of entry is an equity-based entry mode?

Answer: A

Explanation:
InGlobal Economics for Managers, entry modes are commonly classified intonon-equity,contractual, and equity-basedmodes, depending on the level of ownership, control, and risk assumed by the firm. A50/50 joint ventureis an equity-based entry mode, making option B the correct answer.
Equity-based entry modes involveownership 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, arecontractual 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 modethat requires minimal commitment and no foreign ownership.
Global Economics for Managersemphasizes 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 # 80
Managers and firms rationally pursue their interests and make choices within institutional constraints.
Which situation illustrates this proposition of the institution-based view of global business?

Answer: D

Explanation:
InGlobal Economics for Managers, a core proposition of theinstitution-based viewis that firms make rational decisionswithin institutional constraints, making option C correct.
When a country raises its minimum wage, labor costs increase due to a formal institutional change. A multinational firm responding by relocating production to a lower-cost country demonstrates rational behavior shaped by institutional rules.
Options A, B, and D reflect competitive strategy but do not directly involve institutional constraints.
Therefore, option C correctly illustrates the institution-based view.


NEW QUESTION # 81
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