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

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

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

2. Barriers to entry help to create monopolies. What is a common type of barrier?

A) Economies of scale in the production process
B) A firm purchasing competitors
C) Progressive tax structures
D) Elastic demand curves

3. When there is an expectation of lower income in the future, what is the effect on the demand curve for a normal good?

A) The demand curve shifts down.
B) The demand curve shifts left.
C) The demand curve shifts up.
D) The demand curve shifts right.

4. Which situation illustrates the proposition that when formal constraints are unclear or fail, informal constraints play a larger role in reducing uncertainty and providing constancy to firms?

A) A firm follows strict environmental practices despite lax local laws
B) Firms relocating overseas due to a new domestic tax policy
C) Firms entering gray markets due to high taxes
D) Choosing a headquarters location based on cost of living, airports, and tax credits

5. What happens when the Federal Reserve increases the money supply?

A) The aggregate demand curve shifts to the left
B) The aggregate supply curve shifts to the left
C) The aggregate supply curve shifts to the right
D) The aggregate demand curve shifts to the right

Solutions: