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WGU C211 OA Global Economics – Western Governors
University – Latest Academic Year Complete Exam
Questions with Verified Answers
Introduction
This document contains a comprehensive collection of practice
questions and verified answers for the WGU C211 Global
Economics Objective Assessment. It covers essential global
economics concepts including international trade,
comparative advantage, exchange rates, globalization, trade
policies, international organizations, foreign direct
investment, and economic development. The material is
presented in a question-and-answer format, making it suitable
for exam preparation and quick revision. It provides broad
coverage of the core topics commonly assessed in the course.
Exam Questions and Answers
1: What is the primary focus of global economics?--- correct
precise answer ---
The primary focus of global economics is to understand how
countries interact economically, including trade, investment,
and the movement of labor and capital across borders.
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2: Explain the concept of comparative advantage.--- correct
precise answer ---
Comparative advantage is the economic principle that a
country should specialize in producing and exporting goods
and services it can produce more efficiently than other goods,
while importing those that other countries can produce more
efficiently.
3: How do tariffs impact international trade?--- correct
precise answer ---
Tariffs are taxes imposed on imported goods, which raise the
price of these goods and can decrease their demand. They can
protect domestic industries from foreign competition but may
also lead to trade wars and increased prices for consumers.
4: What is the role of the World Trade Organization (WTO)?---
correct precise answer ---
The WTO aims to facilitate smooth and fair international trade
by providing a framework for negotiating trade agreements,
resolving disputes, and ensuring that trade flows as freely as
possible.
5: Describe the balance of payments.--- correct precise
answer ---
The balance of payments is a record of all economic
transactions between residents of a country and the rest of
the world over a period. It includes the trade balance, capital
flows, and financial transfers.
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6: What is the difference between fixed and floating exchange
rates?--- correct precise answer ---
A fixed exchange rate is when a currencys value is tied to
another major currency or basket of currencies, while a
floating exchange rate is determined by market forces of
supply and demand relative to other currencies.
7: How do interest rates affect exchange rates?--- correct
precise answer ---
Generally, higher interest rates offer lenders a higher return
relative to other countries, attracting foreign capital and
causing the currency to appreciate. Conversely, lower interest
rates can lead to depreciation.
8: What is the purpose of foreign exchange reserves?---
correct precise answer ---
Foreign exchange reserves are assets held by central banks in
foreign currencies, used to back liabilities, influence monetary
policy, and maintain confidence in the financial markets.
9: Explain the term trade deficit.--- correct precise answer ---
A trade deficit occurs when a country imports more goods and
services than it exports, resulting in a negative balance of
trade.
10: What are non-tariff barriers?--- correct precise answer ---
WGU C211 OA Global Economics – Western Governors
University – Latest Academic Year Complete Exam
Questions with Verified Answers
Introduction
This document contains a comprehensive collection of practice
questions and verified answers for the WGU C211 Global
Economics Objective Assessment. It covers essential global
economics concepts including international trade,
comparative advantage, exchange rates, globalization, trade
policies, international organizations, foreign direct
investment, and economic development. The material is
presented in a question-and-answer format, making it suitable
for exam preparation and quick revision. It provides broad
coverage of the core topics commonly assessed in the course.
Exam Questions and Answers
1: What is the primary focus of global economics?--- correct
precise answer ---
The primary focus of global economics is to understand how
countries interact economically, including trade, investment,
and the movement of labor and capital across borders.
,Page 2 of 18
2: Explain the concept of comparative advantage.--- correct
precise answer ---
Comparative advantage is the economic principle that a
country should specialize in producing and exporting goods
and services it can produce more efficiently than other goods,
while importing those that other countries can produce more
efficiently.
3: How do tariffs impact international trade?--- correct
precise answer ---
Tariffs are taxes imposed on imported goods, which raise the
price of these goods and can decrease their demand. They can
protect domestic industries from foreign competition but may
also lead to trade wars and increased prices for consumers.
4: What is the role of the World Trade Organization (WTO)?---
correct precise answer ---
The WTO aims to facilitate smooth and fair international trade
by providing a framework for negotiating trade agreements,
resolving disputes, and ensuring that trade flows as freely as
possible.
5: Describe the balance of payments.--- correct precise
answer ---
The balance of payments is a record of all economic
transactions between residents of a country and the rest of
the world over a period. It includes the trade balance, capital
flows, and financial transfers.
, Page 3 of 18
6: What is the difference between fixed and floating exchange
rates?--- correct precise answer ---
A fixed exchange rate is when a currencys value is tied to
another major currency or basket of currencies, while a
floating exchange rate is determined by market forces of
supply and demand relative to other currencies.
7: How do interest rates affect exchange rates?--- correct
precise answer ---
Generally, higher interest rates offer lenders a higher return
relative to other countries, attracting foreign capital and
causing the currency to appreciate. Conversely, lower interest
rates can lead to depreciation.
8: What is the purpose of foreign exchange reserves?---
correct precise answer ---
Foreign exchange reserves are assets held by central banks in
foreign currencies, used to back liabilities, influence monetary
policy, and maintain confidence in the financial markets.
9: Explain the term trade deficit.--- correct precise answer ---
A trade deficit occurs when a country imports more goods and
services than it exports, resulting in a negative balance of
trade.
10: What are non-tariff barriers?--- correct precise answer ---
