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Global-Economics-for-Managers Lead2pass Review & Global-Economics-for-Manage

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Global-Economics-for-Managers Lead2pass Review & Global-Economics-for-Manage

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WGU Global Economics for Managers (C211, UZC2) Sample Questions (Q66-Q71):NEW QUESTION # 66
What is one of the three primary types of foreign exchange transactions?
  • A. Straddles
  • B. Forward transactions
  • C. Balanced transactions
  • D. Hedges
Answer: B
Explanation:
According toGlobal Economics for Managers,forward transactionsare one of the three primary types of foreign exchange transactions, making option B the correct answer. The three main types arespot transactions, forward transactions, and swap transactions, which form the foundation of foreign exchange market activity.
A forward transaction is a contract in which two parties agree to exchange a specified amount of currency at a predetermined exchange rate on a future date. These contracts are widely used by firms tohedge against exchange rate risk, allowing managers to lock in costs or revenues and reduce uncertainty in international transactions.
Option A, hedges, describes thepurposeof some foreign exchange transactions rather than a transaction type itself. Option C, balanced transactions, is not a recognized category in foreign exchange markets. Option D, straddles, refers to an options-based financial strategy, not a primary foreign exchange transaction.
Global Economics for Managersstresses that understanding forward transactions is essential for international business decision making. Exchange rate volatility can significantly affect profitability, and forward contracts provide firms with a practical tool to manage this risk.
For managers engaged in global trade and investment, forward transactions support planning, budgeting, and pricing decisions by reducing exposure to unpredictable currency movements. Therefore, option B accurately identifies one of the primary foreign exchange transaction types.

NEW QUESTION # 67
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 up.
  • B. The demand curve shifts left.
  • C. The demand curve shifts right.
  • D. The demand curve shifts down.
Answer: B
Explanation:
InGlobal Economics for Managers, demand for anormal goodincreases with income and decreases when income falls. If consumers expectlower future income, demand for normal goods decreases, causing the demand curve to shift left, making option A correct.
A leftward shift indicates that at every price, consumers are willing and able to purchase less of the good.
Expectations about future income influence present consumption decisions, especially for durable and discretionary goods.
Options C and D incorrectly describe movement along a demand curve rather than a shift. Option B would apply if income were expected to rise.
Therefore, option A is correct.

NEW QUESTION # 68
Which transaction is included in the consumption component of GDP?
  • A. A government builds a highway
  • B. A company exports automobiles
  • C. A person pays for a haircut
  • D. A firm purchases new machinery
Answer: C
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 # 69
In which situation is the contender strategy appropriate for responding to multinational enterprises (MNEs)?
  • A. There is high industry pressure to globalize, and competitive assets are transferable abroad.
  • B. There is low industry pressure to globalize, and competitive assets are transferable abroad.
  • C. There is high industry pressure to globalize, and competitive assets are customized to home markets.
  • D. There is low industry pressure to globalize, and competitive assets are customized to home markets.
Answer: C
Explanation:
InGlobal Economics for Managers, thecontender strategyis appropriate whenindustry pressure to globalize is high, but competitive assets are customized to home markets, making option B correct. This strategy is typically adopted by domestic firms facing strong competition from multinational enterprises (MNEs) in industries that are becoming increasingly global.
High pressure to globalize means that firms must compete on an international scale, often due to global customers, standardized products, or strong foreign competitors. However, when a firm's competitive assets- such as brand reputation, customer relationships, distribution networks, or regulatory knowledge-are deeply rooted in the home market, they are not easily transferable abroad. In this situation, the firm cannot immediately expand internationally without losing its competitive advantage.
Under a contender strategy, firms focus ondefending and strengthening their domestic positionwhile gradually upgrading capabilities to prepare for future global competition. This may involve improving efficiency, investing in technology, forming selective alliances, or learning from foreign competitors operating in the home market.
Option A describes conditions suitable for anextender strategy, where firms can leverage transferable assets internationally. Options C and D reflect low pressure to globalize and are more consistent with defender or dodger strategies rather than contender behavior.
Therefore, option B best captures the conditions under which the contender strategy is applied in response to MNE competition.

NEW QUESTION # 70
An institution-based view of global business focuses on the specific relationship between which two entities?
  • A. Customers and institutions
  • B. Customers and firms
  • C. Firms and institutions
  • D. Firms and governments
Answer: C
Explanation:
InGlobal Economics for Managers, theinstitution-based view of global businessfocuses on the relationship betweenfirms and institutions, making option D the correct answer. This perspective argues that firm strategies and performance are shaped not only by industry conditions and firm resources but also by the institutional environment in which firms operate.
Institutions include bothformal rules(laws, regulations, property rights) andinformal constraints(norms, cultures, and ethical standards). Firms must align their strategies with these institutions to gain legitimacy, reduce uncertainty, and operate effectively. Governments are important institutional actors, but the institution- based view extends beyond governments to include social norms and cultural expectations.
Options A and B overlook the strategic role of institutions. Option C is too narrow, as it limits the relationship to firms and governments rather than the full institutional framework.
Thus, option D accurately reflects the institution-based view emphasized in global managerial economics.

NEW QUESTION # 71
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