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

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

2. What is the most basic way for nonfinancial companies to adjust to fluctuations of the foreign exchange market?

A) Forward transactions
B) Currency hedging
C) Invoicing customers in the company's currency
D) Rate locks

3. When supply decreases and demand stays the same, what happens to the equilibrium point of price and quantity? Choose two answers.

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

4. What is a tariff levied on imports that are selling below cost in order to unfairly drive domestic firms out of business?

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

5. What are represented by informal institutions?

A) Rules
B) Written laws
C) Ethics
D) Regulations

Solutions: