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

1. 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) "I am better off reducing output below the agreed level."
E) "If my fellow firms live up to the agreement, I am better off raising production."

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

3. Which characteristics are attributed to a democracy? (Choose THREE.)

A) It contains political risk that is lower than in other political systems.
B) It prizes freedom of expression and organization.
C) It extends the right to organize economically to domestic and foreign firms.
D) It concentrates power in a single ruling party.
E) It prohibits private ownership.

4. What is a characteristic of a market economy?

A) Central planning determines production decisions.
B) Prices are fixed by the government.
C) Resources are allocated through quotas.
D) Factors of production are privately owned.

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

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

Solutions: