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

1. In order to increase the money supply, what does the Federal Reserve do?

A) Buys government bonds from the public
B) Increases reserve requirements
C) Sells government bonds to the public
D) Raises the federal funds rate

2. If the demand for a good is inelastic, what is true?

A) Price and total revenue move in opposite directions
B) Consumers are highly sensitive to price changes
C) Quantity demanded responds only slightly to price changes
D) Quantity demanded responds substantially to price changes

3. What are features shared by monopolies and perfect competition? (Choose TWO.)

A) Firms earn economic profits in the short run.
B) Price is greater than marginal cost.
C) In the long run, new firms can easily enter the market.
D) Maximum profit occurs when marginal revenue equals marginal cost.
E) In the long run, it is nearly impossible for new firms to enter.
F) The structure does not produce the welfare-maximizing level of output.

4. What is a characteristic of a market economy?

A) It is defined by a government taking the authoritative role in the economy.
B) It found a near ideal in China and the former Soviet Union during the heydays of communism.
C) The government takes a hands-off approach known as laissez-faire.
D) Factors of production are government-owned or state-owned.

5. What is the bandwagon effect?

A) Government intervention to stabilize markets
B) Investors moving independently based on private information
C) The movement of investors in the same direction at the same time
D) The tendency of prices to return to equilibrium

Solutions: