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

Section	Objectives
Competency 1: International Trade and Currency Exchange	- Currency Exchange Rate Determination - Impact of Interest Rates on Financial Flows and Exchange Rates - Introduction to International Trade Theories
Competency 2: Political and Economic Forces	- Property Rights and the Rule of Law - Market Economy vs. Command Economy
Key Topics Across All Competencies	- Foreign Direct Investment (FDI) Impacts - Supply and Demand Shifts - Elastic vs. Inelastic Goods - International Trade Policies (Tariffs, Quotas) - Global Business Strategies and Porter's Framework - Currency Appreciation and Depreciation
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)

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WGU Global Economics for Managers (C211, UZC2) Sample Questions (Q90-Q95):

NEW QUESTION # 90
When supply increases and demand stays the same, what happens to the equilibrium point of price and quantity?

A. Quantity decreases
B. Price increases
C. Quantity increases
D. Price remains the same

Answer: C

Explanation:
InGlobal Economics for Managers, an increase in supply with demand held constant leads to anew equilibrium characterized by a lower price and a higher quantity, making option A-quantity increases- the correct answer. This outcome follows directly from standard supply-and-demand analysis.
When supply increases, the supply curve shifts to the right. At the original equilibrium price, producers are now willing and able to supply more than consumers wish to buy, creating excess supply. To eliminate this surplus, sellers reduce prices. As prices fall, quantity demanded increases until a new equilibrium is reached where quantity supplied equals quantity demanded.
Although price also changes (it falls), the question asks what happens to theequilibrium point of price and quantity, and among the given options, onlyquantity increasesis correct. Price does not remain the same, nor does it increase, and quantity certainly does not decrease.
This concept is critical for managers analyzing productivity improvements, technological progress, or reductions in input costs. Supply increases are often driven by innovation, economies of scale, or favorable regulatory changes, all of which allow firms to produce more at every price.
Thus, option A correctly describes the equilibrium outcome when supply increases and demand remains unchanged.

NEW QUESTION # 91
Which statement about the GDP deflator is true?

A. It follows a nearly strict decreasing pattern from a base year.
B. It is a more reliable indicator of economic well-being than real GDP.
C. Its percentage change from one year to the next is the inflation rate.
D. It includes fewer core economic measurements than GDP.

Answer: C

Explanation:
InGlobal Economics for Managers, theGDP deflatoris a price index used to measureinflation, making option A correct. The percentage change in the GDP deflator from one year to the next reflects the overall inflation rate of domestically produced goods and services.
The GDP deflator is calculated as:
GDP Deflator = (Nominal GDP / Real GDP) × 100
Because it includes all goods and services produced domestically, it provides a broad measure of price changes across the economy. Unlike the CPI, it is not based on a fixed basket of goods.
Option B is incorrect because real GDP, not the GDP deflator, is used to assess economic well-being. Option C is incorrect because the GDP deflator is derived from the same GDP components. Option D is incorrect because the deflator generally increases over time due to inflation.
Thus, option A is correct.

NEW QUESTION # 92
What is an example of a company that is market-seeking?

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

Answer: D

Explanation:
In Global Economics for Managers , a market-seeking company is one that invests in or enters a foreign location primarily to serve 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 is high 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 a resource-seeking firm, focused on obtaining low-cost or specialized inputs. Option B also reflects resource-seeking behavior, specifically in extractive industries. Option D describes a cost- seeking (efficiency-seeking) firm that locates production in regions with low labor costs.
Global Economics for Managers classifies 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 # 93
When is it best for a firm to increase production?

A. When marginal revenue is greater than marginal cost
B. When average cost is minimized
C. When marginal cost exceeds marginal revenue
D. When total revenue is maximized

Answer: A

Explanation:
InGlobal Economics for Managers, the fundamental profit-maximization rule states that firms shouldincrease production when marginal revenue exceeds marginal cost, making option C correct.
Marginal revenue represents the additional revenue from selling one more unit, while marginal cost represents the additional cost of producing it. As long as MR > MC, producing additional units increases profit. Firms should stop expanding output when MR = MC.
Option A implies losses on additional units. Option B relates to cost efficiency, not profit maximization.
Option D ignores costs and therefore does not maximize profit.
Therefore, option C correctly identifies the condition under which firms should increase production.

NEW QUESTION # 94
Which effect does increased government spending have on aggregate demand if the multiplier effect is greater than the crowding-out effect?

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

Answer: C

Explanation:
In Global Economics for Managers , when the multiplier effect exceeds the crowding-out effect , increased government spending causes aggregate 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 # 95
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