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| Section | Objectives |
|---|---|
| Macroeconomic Environment | - GDP, inflation, and unemployment - Fiscal and monetary policy |
| Foundations of Economics | - Market systems and economic models - Scarcity, opportunity cost, and economic reasoning |
| Global Economics | - Global economic institutions and trade policy - International trade and comparative advantage - Exchange rates and currency systems |
| Microeconomics for Managers | - Elasticity and pricing decisions - Market structures and competition - Supply and demand analysis |
| Managerial Economic Decision-Making | - Risk and uncertainty in global markets - Cost-benefit analysis in business contexts |
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NEW QUESTION # 95
Which transaction is included in the consumption component of GDP?
Answer: B
Explanation:
InGlobal Economics for Managers, theconsumption component of GDPincludeshousehold spending on goods and services, making option C correct.
When a person pays for a haircut, it represents a direct purchase of a service by a household. Consumption is the largest component of GDP in most economies and includes spending on nondurable goods, durable goods, and services.
Option A is classified as investment. Option B is government spending. Option D is an export, counted in net exports.
Thus, option C correctly identifies a consumption transaction.
NEW QUESTION # 96
Which GDP component is affected when a parent pays for a child's college education?
Answer: C
Explanation:
A parent paying for a child's college education is counted in the consumption component of GDP. Option C is correct because consumption includes household spending on goods and services, including education services purchased by individuals or families. GDP is commonly divided into consumption, investment, government purchases, and net exports. Investment refers to business capital spending, inventory changes, and residential construction, not ordinary household education payments. Government purchases would apply if the government directly purchased goods or services, not when a private parent pays tuition. Net exports involve exports minus imports and are unrelated to a domestic household education payment. For managers, understanding GDP components matters because consumption is usually the largest part of GDP and reflects household demand conditions.
NEW QUESTION # 97
Which term best describes an economic condition in which a nation exports more than it imports?
Answer: D
Explanation:
A trade surplus occurs when a country exports more goods and services than it imports during a given period.
This means foreign buyers purchase more from the country than the country purchases from abroad. Option A is correct because it accurately describes a positive balance of trade. A trade deficit is the opposite condition, where imports exceed exports. Mercantilism is an older trade theory that emphasized accumulating wealth through exports and limiting imports, but it is not the term for the actual trade-balance condition. Resource mobility refers to the ability of labor, capital, or other resources to move from one use or industry to another.
For managers, trade surpluses can affect currency strength, export opportunities, and international competitiveness.
NEW QUESTION # 98
What are properties of a typical indifference curve? (Choose TWO.)
Answer: C,D
Explanation:
InGlobal Economics for Managers, indifference curves have two key properties:higher curves represent higher utility, andcurves do not cross, making options A and C correct.
If curves crossed, preferences would be inconsistent. Higher curves indicate greater satisfaction.
Options B and D violate consumer theory assumptions.
Thus, A and C are correct.
NEW QUESTION # 99
What is the most basic way for nonfinancial companies to adjust to fluctuations of the foreign exchange market?
Answer: A
Explanation:
The most basic way for a nonfinancial company to reduce exposure to foreign exchange fluctuations is to invoice customers in the company's own currency. Option A is correct because this shifts exchange-rate risk away from the seller and onto the buyer. If the firm receives payment in its home currency, its revenues are more predictable and are not directly reduced by unfavorable currency movements. Currency hedging, rate locks, and forward transactions are more formal financial or contractual tools for managing exchange risk, but they require additional planning, market access, and sometimes financial expertise. Invoicing in the home currency is operationally simpler. However, managers must remember that this approach may make the firm less attractive to foreign buyers who prefer pricing in their local currency.
NEW QUESTION # 100
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