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Valid Global-Economics-for-Managers Test Sample - Test Global-Economics-for-Managers Discount Voucher

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WGU Global Economics for Managers (C211, UZC2) Sample Questions (Q126-Q131):

NEW QUESTION # 126
A country has experienced a decrease in inflation. What is the effect on the country's currency exchange rate?

A. It has no effect
B. It becomes unstable
C. It increases
D. It depreciates

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 # 127
Which quantity is calculated using the formula variable costs (VC) + fixed costs (FC)?

A. Implicit cost (IC)
B. Average variable cost (AVC)
C. Explicit cost (EC)
D. Total cost (TC)

Answer: D

Explanation:
InGlobal Economics for Managers,total cost (TC)is defined as the sum offixed costs (FC)andvariable costs (VC), making option C correct. The formula is:
TC = FC + VC
Fixed costs do not change with output in the short run, such as rent or license fees, while variable costs change with the level of production, such as labor or raw materials. Total cost captures the full economic cost of producing a given level of output.
Option A, implicit cost, refers to opportunity costs without direct monetary payment. Option B, explicit cost, includes direct monetary expenditures but does not represent the total cost formula. Option D, average variable cost, is calculated as VC divided by quantity produced.
Understanding total cost is essential for profit maximization and production decisions. Therefore, option C is correct.

NEW QUESTION # 128
Institutions exist to reduce uncertainty. An institutional framework is made up of two types of systems.
What are the systems? (Choose TWO.)

A. Normative
B. Cognitive
C. Firm
D. Formal
E. Personal
F. Informal

Answer: D,F

Explanation:
According toGlobal Economics for Managers, aninstitutional frameworkis composed offormal and informal systems, making options B (Informal) and E (Formal) correct. Institutions are the "rules of the game" that structure economic, political, and social interactions and reduce uncertainty for firms and individuals.
Formal institutionsinclude written and legally enforced rules such as constitutions, laws, regulations, contracts, and property rights. These systems are enforced by governments and legal authorities and provide predictable constraints on behavior. For managers, formal institutions define what is legally permissible and shape decisions related to investment, employment, and market entry.
Informal institutions, by contrast, consist of unwritten rules such as norms, customs, traditions, and cultural values. These systems are enforced through social approval or disapproval rather than legal sanctions.
Informal institutions often guide behavior when formal rules are weak, ambiguous, or poorly enforced.
The remaining options are not the two foundational systems identified in managerial economics. Cognitive and normative elements are sometimes discussed aspillarsof institutions, but the broad institutional framework is consistently categorized into formal and informal systems. Firm and personal systems are not institutional categories.
Global Economics for Managersstresses that managers operating globally must understand both systems, as ignoring informal rules can lead to business failure even when firms comply with formal laws. Therefore, informal and formal systems together constitute the institutional framework.

NEW QUESTION # 129
In an oligopoly with an initial agreement to maximize total profit, which statements might a firm motivated by self-interest likely make? (Choose THREE.)

A. "I should always cooperate, regardless of outcomes."
B. "If my fellow firms fail to live up to the agreement and raise production, I am better off raising production myself."
C. "Regardless of what my fellow firms do, I am better off raising production beyond the agreed-to level."
D. "If my fellow firms live up to the agreement, I am better off raising production."
E. "I am better off reducing output below the agreed level."

Answer: B,C,D

Explanation:
InGlobal Economics for Managers, oligopolies often face aprisoner's dilemma, making deviation from collusive agreements individually rational. Options A, B, and C correctly reflect this logic.
If others cooperate, cheating by increasing output raises individual profit. If others cheat, matching their behavior minimizes losses. Therefore, regardless of others' actions, raising output appears optimal.
Options D and E contradict self-interested incentives.
Thus, A, B, and C correctly capture oligopolistic behavior.

NEW QUESTION # 130
What is a tariff levied on imports that are selling below cost in order to unfairly drive domestic firms out of business?

A. Antidumping duty
B. Deadweight cost
C. Factor endowment
D. Opportunity cost

Answer: A

Explanation:
An antidumping duty is a tariff imposed on imported goods that are sold at unfairly low prices, often below cost or below the price charged in the exporter's home market. Dumping can harm domestic producers because foreign firms may temporarily underprice goods to gain market share or drive competitors out of business. Governments use antidumping duties to offset this unfair pricing and restore competitive conditions.
Option C is correct because it directly identifies the trade remedy used against below-cost imports. Factor endowment refers to a country's available resources, not a tariff. Deadweight cost is the net welfare loss caused by tariffs or other distortions. Opportunity cost is the value of the next best alternative forgone when a choice is made.

NEW QUESTION # 131
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