WGU C211 GLOBAL ECONOMICS
COMPREHENSIVE QUESTIONS AND
ANSWERS 2027.
1. Which economic theory suggests that a country should specialize in producing goods for
which it has the lowest opportunity cost?
A. Absolute Advantage
B. Mercantilism
C. Comparative Advantage
D. Product Life Cycle Theory
Answer: C
Conceptual Explanation: Comparative advantage occurs when a country can produce a
good at a lower opportunity cost than another country, even if it lacks an absolute
advantage.
2. What is the primary purpose of the International Monetary Fund (IMF)?
A. To provide long-term loans for infrastructure projects
B. To regulate environmental standards globally
,C. To resolve trade disputes between member nations
D. To act as a lender of last resort and maintain global financial stability
Answer: D
Conceptual Explanation: The IMF focuses on maintaining international monetary stability
and providing short-term loans to countries experiencing balance-of-payments problems.
3. In a command economy, who primarily decides what goods and services are produced?
A. Individual consumers
B. Private business owners
C. International trade organizations
D. The government
Answer: D
Conceptual Explanation: In a command economy, the central government plans and
controls production and pricing.
4. Which of the following describes a ‘Customs Union’?
A. A group of countries that eliminate internal trade barriers and adopt a common external
tariff
B. A group of countries that eliminate internal trade barriers but maintain independent
external tariffs
C. A group of countries that allow free movement of labor and capital
, D. A group of countries that share a single currency
Answer: A
Conceptual Explanation: A customs union removes internal trade barriers and establishes
a common external trade policy toward non-members.
5. What does the Gini Coefficient measure?
A. Economic growth rate
B. Inflation levels
C. The value of a nation’s currency
D. Income inequality within a population
Answer: D
Conceptual Explanation: The Gini coefficient is a statistical measure of distribution often
used to gauge economic inequality.
6. Which component of GDP accounts for the purchase of new machinery by a business?
A. Consumption
B. Government Spending
C. Investment
D. Net Exports
Answer: C
COMPREHENSIVE QUESTIONS AND
ANSWERS 2027.
1. Which economic theory suggests that a country should specialize in producing goods for
which it has the lowest opportunity cost?
A. Absolute Advantage
B. Mercantilism
C. Comparative Advantage
D. Product Life Cycle Theory
Answer: C
Conceptual Explanation: Comparative advantage occurs when a country can produce a
good at a lower opportunity cost than another country, even if it lacks an absolute
advantage.
2. What is the primary purpose of the International Monetary Fund (IMF)?
A. To provide long-term loans for infrastructure projects
B. To regulate environmental standards globally
,C. To resolve trade disputes between member nations
D. To act as a lender of last resort and maintain global financial stability
Answer: D
Conceptual Explanation: The IMF focuses on maintaining international monetary stability
and providing short-term loans to countries experiencing balance-of-payments problems.
3. In a command economy, who primarily decides what goods and services are produced?
A. Individual consumers
B. Private business owners
C. International trade organizations
D. The government
Answer: D
Conceptual Explanation: In a command economy, the central government plans and
controls production and pricing.
4. Which of the following describes a ‘Customs Union’?
A. A group of countries that eliminate internal trade barriers and adopt a common external
tariff
B. A group of countries that eliminate internal trade barriers but maintain independent
external tariffs
C. A group of countries that allow free movement of labor and capital
, D. A group of countries that share a single currency
Answer: A
Conceptual Explanation: A customs union removes internal trade barriers and establishes
a common external trade policy toward non-members.
5. What does the Gini Coefficient measure?
A. Economic growth rate
B. Inflation levels
C. The value of a nation’s currency
D. Income inequality within a population
Answer: D
Conceptual Explanation: The Gini coefficient is a statistical measure of distribution often
used to gauge economic inequality.
6. Which component of GDP accounts for the purchase of new machinery by a business?
A. Consumption
B. Government Spending
C. Investment
D. Net Exports
Answer: C
