WGU D080 CORE EXAM MANUAL QUESTIONS AND
ANSWERS RATED A+
✔✔Traditional Economy - ✔✔The traditional economy uses methods of trade and
exchange that are passed through generations. It is the oldest of the four economic
systems and can still be found in parts of South America, Africa, and Asia. Occupations,
usually farming, are passed down through generations. People live off the products of
their labor. Traditional economies have very little economic evolution or growth.
✔✔Market Economy - ✔✔In a market (decentralized) economic system, leaders make
decisions based on consumer demands. Goods and services are produced and
distributed according to the rules of supply and demand. In other words, consumers
influence how many products and services are made available through their purchasing
and usage patterns.
✔✔Command Economy - ✔✔Communist societies use a command or centrally
controlled economy. Resources and businesses are owned by the government, which
decides which goods and services will be produced and what prices will be charged.
North Korea and Cuba have command economies.
✔✔Mixed Economies - ✔✔A mixed economy borrows the following characteristics from
a market economy: It protects private property, the laws of supply and demand
determine prices in a free market, and it is driven by self-interest. A mixed economy, like
a command economy, uses the federal government to protect the people and the
market and oversee the military, international trade, and national transportation.
✔✔List different legal systems - ✔✔a. Civil law
Common Law
Religious Law
✔✔Please provide three legal systems - ✔✔1. Civil law
2. Common Law
3. Religious law
✔✔Civil law - ✔✔It is based on a detailed set of laws that constitute a code and focuses
on how the law is applied to the facts. The civil law system is inquisitorial, where the
investigating judge investigates the facts of the case, and Juries are rarely used. The
victim may participate in the trial and have rights. It is the most widespread legal system
in the world. Approximately 150 countries have a primarily civil law system. The civil law
system is found in most of continental Europe, Central America, and South America.
Basis in the Roman legal tradition.
✔✔Common Law - ✔✔Judges interpret the law, and judicial rulings can set precedent.
Common law systems are often adversarial because the judge's role is to act as a
moderator between two opposing parties. A jury may determine the facts, and a judge
,decides which law will be applied to the case. Both prosecutors and defense attorneys
have an active role. Victims may serve as witnesses, but they are not a party in criminal
cases. The legal system of the United States - except Louisiana, which has a mix of civil
and common laws - is a common law system. found in Australia, Canada, England, and
Wales. Approximately 80 countries have common law systems. Based on traditions and
precedence and can be traced to the English monarchy.
✔✔Religious Law - ✔✔Also known as theocratic law and is based on religious
guidelines.
✔✔Islamic law and prohibition of interest - ✔✔Islamic law systems are found throughout
Africa, the Middle East, Central Asia, and South Asia. The most commonly known
example of religious law is Islamic law. Sharia governs several Islamic nations and
communities around the world and is the most widely accepted religious law system.
✔✔Christian Canon Law - ✔✔The Christian Canon system is not practiced at the
national level in any country. Canon law is the body of laws and regulations made by
the ecclesiastical authority governing Christian communities. Canon law was the basis
for much of the Western legal tradition used today. The Christian Canon system is
observed in Vatican City.
✔✔Talmudic law - ✔✔The Talmudic legal system relies on the written opinions of those
well-trained in law. This applies in some countries and regions in which the Jewish
population is heavily concentrated. The sources of law in this system are the written and
oral Torah and the Talmud.
✔✔Five stages of entering a global market - ✔✔First stage (market entry)
Second stage (product specialization),
Third stage (value chain disaggregation)
Fourth stage (value chain reengineering)
Fifth stage (creation of new markets)
✔✔CAGE analysis - ✔✔1."C" is for culture
2."A" is for administration
3."G" is for geography
4."E" is for economic distance - Socioeconomic and demiographic.
✔✔What are the IMF's major functions? - ✔✔Monitors exchange rates, stabilizes
international monetary systems, and fosters global financial cooperation. Their stated
goal was to stabilize exchange rates and assist in the reconstruction of the world's
international payment system. Focuses more on maintaining short-term global financial
stability & making international transactions smoother & safter. Credit union that only
serves member nations. Oversees International monetary system, cooperative
institution, Small, Resources come from quota subscriptions or membership fees, loans
to all member nations, acts more like a credit union.
,✔✔What are the IMF's goals? - ✔✔Their stated goal was to stabilize exchange rates
and assist in the reconstruction of the world's international payment system. Focuses
more on maintaining short-term global financial stability & making international
transactions smoother & safter. Credit union that only serves member nations.
Oversees International monetary system, cooperative institution, Small, Resources
come from quota subscriptions or membership fees, loans to all member nations, acts
more like a credit union.
✔✔What are the IMF's conditionalities? - ✔✔These loan conditions ensure that the
borrowing country will be able to repay the fund and that the country will not attempt to
solve their balance of payment problems in a way that could negatively impact the
international economy.
✔✔Conditionalities — explain the reason for loan conditions. - ✔✔1. Prior actions
Prior actions are actions that a country agrees to before the IMF's executive board
approves financing or completes a review. They are intended to verify that the country
has a stable financial foundation before qualifying for a loan.
2. Quantitative performance
Quantitative performance criteria are specific and measurable conditions that a country
must meet to complete a review.
3. Indicative targets
Indicative targets are quantitative targets used to measure a country's progress in
meeting the IMF's requirements.
4. Structural benchmarks
Structural benchmarks are non-quantitative measures such as social safety nets.
✔✔What are the four criticisms on the IMF? - ✔✔1. Assumption of corrupt government
2. Privatization and deregulation
3. Austerity policies
4. Imbalance of power
✔✔Elaborate on each criticism. - Assumption of corrupt government - ✔✔Conditionality
is based on the assumption that many countries in dire economic straits are there
because of corrupt governments, but in the short term, the citizens pay a heavy price.
For example, farmers may be required to pay for healthcare and education when they
have never had to in the past and cannot afford to now.
✔✔Elaborate on each criticism - Privatization and deregulation - ✔✔Critics state that
requiring poor countries to reduce their government borrowing, demand higher interest
rates to stabilize their currency, allow firms that are fiscally unstable to go bankrupt and
require structural adjustments such as privatization, deregulation, and reducing
bureaucracy may make conditions worse in a struggling country.
, ✔✔Elaborate on each criticism - Austerity policies - ✔✔Austerity policies have worked
at times but always extract a political toll as the impact on average citizens is usually
quite harsh.
✔✔Elaborate on each criticism - Imbalance of power - ✔✔The imbalance of power can
lead to loan requirements that undermine the local government. In addition, an
untoward comment from the IMF about a country's governing process may make it more
challenging for that country to get loans from more traditional sources.
✔✔What are the World Bank's major functions? - ✔✔Encourages developing countries
to borrow for development projects. Developmental institutions, focused on supporting
developing countries, large, investment bank owned by the governments of the 180
member nations. Borrows & Loans, Borrowers must meet requirements to qualify for
loans.
✔✔Part TWO - What are the World Bank's major functions? - ✔✔1. Reduction of
extreme poverty
For impoverished developing countries, the bank's assistance plans are based on
poverty reduction strategies. By combining a cross-section of local groups with an
extensive analysis of the country's financial and economic situation, the World Bank
develops a strategy uniquely designed for the country in need. The government then
identifies the country's priorities and targets for the reduction of poverty.
2. Long-term, low interest loans for development projects
In the real world, the World Bank provides loans for development. The World Bank has
loan programs for developed countries to develop further and rebuild after a natural
disaster and specific programs to aid developing nations.
✔✔What are the World Bank's three criticisms? - ✔✔1 Imbalance of power—voting
share
2. Conditionality and austerity measures
3. Impact on environment
✔✔Explain the World Bank's criticisms - Imbalance of power - ✔✔The hegemony or
power imbalance in the leadership of both organizations. Since voting shares are
determined based on the size and "openness" of the countries, the power is in the
United States, European countries, and Japan.
✔✔Explain the World Bank's criticisms - Conditionality and austerity measures -
✔✔Enforced conditionality or structural reforms, causing harm, not help to developing
countries. For the World Bank, conditionality most directly comes from its Development
Policy Operations, where loans are issued after completion of prior actions.
✔✔Explain the World Bank's criticisms - Impact on environment - ✔✔Not considering
how funding projects will adversely affect the environment. One example of how funding
a project can negatively impact the environment was the Western Poverty Reduction
ANSWERS RATED A+
✔✔Traditional Economy - ✔✔The traditional economy uses methods of trade and
exchange that are passed through generations. It is the oldest of the four economic
systems and can still be found in parts of South America, Africa, and Asia. Occupations,
usually farming, are passed down through generations. People live off the products of
their labor. Traditional economies have very little economic evolution or growth.
✔✔Market Economy - ✔✔In a market (decentralized) economic system, leaders make
decisions based on consumer demands. Goods and services are produced and
distributed according to the rules of supply and demand. In other words, consumers
influence how many products and services are made available through their purchasing
and usage patterns.
✔✔Command Economy - ✔✔Communist societies use a command or centrally
controlled economy. Resources and businesses are owned by the government, which
decides which goods and services will be produced and what prices will be charged.
North Korea and Cuba have command economies.
✔✔Mixed Economies - ✔✔A mixed economy borrows the following characteristics from
a market economy: It protects private property, the laws of supply and demand
determine prices in a free market, and it is driven by self-interest. A mixed economy, like
a command economy, uses the federal government to protect the people and the
market and oversee the military, international trade, and national transportation.
✔✔List different legal systems - ✔✔a. Civil law
Common Law
Religious Law
✔✔Please provide three legal systems - ✔✔1. Civil law
2. Common Law
3. Religious law
✔✔Civil law - ✔✔It is based on a detailed set of laws that constitute a code and focuses
on how the law is applied to the facts. The civil law system is inquisitorial, where the
investigating judge investigates the facts of the case, and Juries are rarely used. The
victim may participate in the trial and have rights. It is the most widespread legal system
in the world. Approximately 150 countries have a primarily civil law system. The civil law
system is found in most of continental Europe, Central America, and South America.
Basis in the Roman legal tradition.
✔✔Common Law - ✔✔Judges interpret the law, and judicial rulings can set precedent.
Common law systems are often adversarial because the judge's role is to act as a
moderator between two opposing parties. A jury may determine the facts, and a judge
,decides which law will be applied to the case. Both prosecutors and defense attorneys
have an active role. Victims may serve as witnesses, but they are not a party in criminal
cases. The legal system of the United States - except Louisiana, which has a mix of civil
and common laws - is a common law system. found in Australia, Canada, England, and
Wales. Approximately 80 countries have common law systems. Based on traditions and
precedence and can be traced to the English monarchy.
✔✔Religious Law - ✔✔Also known as theocratic law and is based on religious
guidelines.
✔✔Islamic law and prohibition of interest - ✔✔Islamic law systems are found throughout
Africa, the Middle East, Central Asia, and South Asia. The most commonly known
example of religious law is Islamic law. Sharia governs several Islamic nations and
communities around the world and is the most widely accepted religious law system.
✔✔Christian Canon Law - ✔✔The Christian Canon system is not practiced at the
national level in any country. Canon law is the body of laws and regulations made by
the ecclesiastical authority governing Christian communities. Canon law was the basis
for much of the Western legal tradition used today. The Christian Canon system is
observed in Vatican City.
✔✔Talmudic law - ✔✔The Talmudic legal system relies on the written opinions of those
well-trained in law. This applies in some countries and regions in which the Jewish
population is heavily concentrated. The sources of law in this system are the written and
oral Torah and the Talmud.
✔✔Five stages of entering a global market - ✔✔First stage (market entry)
Second stage (product specialization),
Third stage (value chain disaggregation)
Fourth stage (value chain reengineering)
Fifth stage (creation of new markets)
✔✔CAGE analysis - ✔✔1."C" is for culture
2."A" is for administration
3."G" is for geography
4."E" is for economic distance - Socioeconomic and demiographic.
✔✔What are the IMF's major functions? - ✔✔Monitors exchange rates, stabilizes
international monetary systems, and fosters global financial cooperation. Their stated
goal was to stabilize exchange rates and assist in the reconstruction of the world's
international payment system. Focuses more on maintaining short-term global financial
stability & making international transactions smoother & safter. Credit union that only
serves member nations. Oversees International monetary system, cooperative
institution, Small, Resources come from quota subscriptions or membership fees, loans
to all member nations, acts more like a credit union.
,✔✔What are the IMF's goals? - ✔✔Their stated goal was to stabilize exchange rates
and assist in the reconstruction of the world's international payment system. Focuses
more on maintaining short-term global financial stability & making international
transactions smoother & safter. Credit union that only serves member nations.
Oversees International monetary system, cooperative institution, Small, Resources
come from quota subscriptions or membership fees, loans to all member nations, acts
more like a credit union.
✔✔What are the IMF's conditionalities? - ✔✔These loan conditions ensure that the
borrowing country will be able to repay the fund and that the country will not attempt to
solve their balance of payment problems in a way that could negatively impact the
international economy.
✔✔Conditionalities — explain the reason for loan conditions. - ✔✔1. Prior actions
Prior actions are actions that a country agrees to before the IMF's executive board
approves financing or completes a review. They are intended to verify that the country
has a stable financial foundation before qualifying for a loan.
2. Quantitative performance
Quantitative performance criteria are specific and measurable conditions that a country
must meet to complete a review.
3. Indicative targets
Indicative targets are quantitative targets used to measure a country's progress in
meeting the IMF's requirements.
4. Structural benchmarks
Structural benchmarks are non-quantitative measures such as social safety nets.
✔✔What are the four criticisms on the IMF? - ✔✔1. Assumption of corrupt government
2. Privatization and deregulation
3. Austerity policies
4. Imbalance of power
✔✔Elaborate on each criticism. - Assumption of corrupt government - ✔✔Conditionality
is based on the assumption that many countries in dire economic straits are there
because of corrupt governments, but in the short term, the citizens pay a heavy price.
For example, farmers may be required to pay for healthcare and education when they
have never had to in the past and cannot afford to now.
✔✔Elaborate on each criticism - Privatization and deregulation - ✔✔Critics state that
requiring poor countries to reduce their government borrowing, demand higher interest
rates to stabilize their currency, allow firms that are fiscally unstable to go bankrupt and
require structural adjustments such as privatization, deregulation, and reducing
bureaucracy may make conditions worse in a struggling country.
, ✔✔Elaborate on each criticism - Austerity policies - ✔✔Austerity policies have worked
at times but always extract a political toll as the impact on average citizens is usually
quite harsh.
✔✔Elaborate on each criticism - Imbalance of power - ✔✔The imbalance of power can
lead to loan requirements that undermine the local government. In addition, an
untoward comment from the IMF about a country's governing process may make it more
challenging for that country to get loans from more traditional sources.
✔✔What are the World Bank's major functions? - ✔✔Encourages developing countries
to borrow for development projects. Developmental institutions, focused on supporting
developing countries, large, investment bank owned by the governments of the 180
member nations. Borrows & Loans, Borrowers must meet requirements to qualify for
loans.
✔✔Part TWO - What are the World Bank's major functions? - ✔✔1. Reduction of
extreme poverty
For impoverished developing countries, the bank's assistance plans are based on
poverty reduction strategies. By combining a cross-section of local groups with an
extensive analysis of the country's financial and economic situation, the World Bank
develops a strategy uniquely designed for the country in need. The government then
identifies the country's priorities and targets for the reduction of poverty.
2. Long-term, low interest loans for development projects
In the real world, the World Bank provides loans for development. The World Bank has
loan programs for developed countries to develop further and rebuild after a natural
disaster and specific programs to aid developing nations.
✔✔What are the World Bank's three criticisms? - ✔✔1 Imbalance of power—voting
share
2. Conditionality and austerity measures
3. Impact on environment
✔✔Explain the World Bank's criticisms - Imbalance of power - ✔✔The hegemony or
power imbalance in the leadership of both organizations. Since voting shares are
determined based on the size and "openness" of the countries, the power is in the
United States, European countries, and Japan.
✔✔Explain the World Bank's criticisms - Conditionality and austerity measures -
✔✔Enforced conditionality or structural reforms, causing harm, not help to developing
countries. For the World Bank, conditionality most directly comes from its Development
Policy Operations, where loans are issued after completion of prior actions.
✔✔Explain the World Bank's criticisms - Impact on environment - ✔✔Not considering
how funding projects will adversely affect the environment. One example of how funding
a project can negatively impact the environment was the Western Poverty Reduction
