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WGU Global Economics for Managers (C211, UZC2) Sample Questions (Q115-Q120):

NEW QUESTION # 115
What is one of the three primary types of foreign exchange transactions?

A. Hedging transactions
B. Forward transactions
C. Arbitrage transactions
D. Spot transactions

Answer: D

Explanation:
In Global Economics for Managers, spot transactions are one of the three primary types of foreign exchange transactions, making option B correct. Spot transactions involve the immediate exchange of currencies, typically settled within two business days.
The three main foreign exchange transactions are:
Spot transactions
Forward transactions
Swap transactions
Spot transactions form the foundation of currency trading and are widely used for international trade payments and short-term currency needs.
Options C and D describe strategies rather than transaction types.
Thus, option B is correct.

NEW QUESTION # 116
Which quantity measures the market value of all final goods and services produced within a country in a given period of time?

A. National disposable income
B. Net domestic product (NDP)
C. Gross domestic product (GDP)
D. Gross national income (GNI)

Answer: C

Explanation:
InGlobal Economics for Managers,gross domestic product (GDP)is defined asthe market value of all final goods and services produced within a country's borders during a specific period, making option C correct. GDP is the most widely used indicator of a country's economic performance and size.
GDP includes onlyfinal goods and servicesto avoid double counting. Intermediate goods used in production are excluded because their value is already embedded in final goods. GDP also measures productionwithin national borders, regardless of whether the producers are domestic or foreign-owned firms.
Option A, GNI, includes income earned by citizens abroad and excludes income earned domestically by foreign firms. Option B subtracts depreciation from GDP. Option D is not a standard national income measure.
Managers use GDP to evaluate market potential, economic growth, and country risk. Therefore, option C correctly identifies GDP.

NEW QUESTION # 117
A country has seen an increase in inflation. What is the effect on the country's currency exchange rate?

A. It remains the same.
B. It increases.
C. It decreases.
D. It changes, but in an unknown direction.

Answer: C

Explanation:
An increase in inflation generally reduces the value of a country's currency relative to other currencies.
Higher inflation lowers purchasing power because domestic goods and services become more expensive compared with foreign alternatives. As the country's exports become less competitive and imports become relatively more attractive, demand for the domestic currency tends to fall. Under purchasing power parity logic, currencies of countries with higher inflation tend to depreciate over time. Option D is therefore correct.
Option B is incorrect because currency appreciation is more commonly associated with lower inflation, higher productivity, or higher real interest rates. Option A is too rigid because inflation is one of the major determinants of exchange-rate movement. Option C is weaker than D because the expected direction is depreciation.

NEW QUESTION # 118
One view of globalization claims that human civilization has always had some type of globalization.
Which view is it?

A. The long-run historical view
B. The short-run economic view
C. The technological convergence view
D. The modern institutional view

Answer: A

Explanation:
InGlobal Economics for Managers, thelong-run historical viewof globalization argues that globalization is not a recent phenomenon, but rather a process that has existed throughout human history. This view emphasizes that trade, migration, cultural exchange, and cross-border interactions have occurred for thousands of years, long before modern multinational enterprises or digital technologies emerged.
Under this perspective, early examples of globalization include ancient trade routes such as the Silk Road, maritime trade across the Mediterranean, and colonial-era exchanges of goods, capital, and labor. Although the scale, speed, and complexityof globalization have increased dramatically in recent decades, the underlying idea of cross-border integration is seen as historically continuous.
This view contrasts with more recent interpretations that define globalization as a post-World War II or late
20th-century phenomenon driven by multinational corporations, trade liberalization, and digital communication. The long-run historical view does not deny the importance of these modern forces but argues that they represent anintensification, not the origin, of globalization.
For managers, this perspective is important because it frames globalization as a persistent structural force rather than a temporary trend. Firms operating globally must recognize that international economic integration has deep roots and is likely to continue evolving rather than reversing permanently.
Therefore, option C correctly identifies the long-run historical view as the perspective that sees globalization as an enduring feature of human civilization.

NEW QUESTION # 119
What are examples of variable costs? Choose two answers.

A. The monthly internet cost in a business that produces women's apparel
B. The cost of the parts used in individual devices made by a computer manufacturer
C. A $1,000 license fee charged by the state government to operate a shop
D. A 5% tax charged by the government on variable inputs
E. The CEO's salary for a major manufacturing firm
F. The rent paid by a magazine publisher for its creative team

Answer: B,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 # 120
......

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