WGU C211 – Global Economics for Managers
Comprehensive Practice Questions with Correct Answers
and Detailed Explanations Latest update this Year instant
pdf 100% Verified
Q1. What is the core proposition of an institution-based view of global business?
A. Institutions are irrelevant to business operations
B. Institutions are the "rules of the game" that shape competition and international trade
C. Only formal institutions matter for business success
D. Institutions only affect domestic businesses, not global firms
Correct Answer: B. Institutions are the "rules of the game" that shape competition
and international trade
Institutions reduce uncertainty by establishing the formal and informal rules that govern
business conduct. The institution-based view emphasizes that both formal (laws,
regulations) and informal (culture, ethics) institutions impact business decisions globally .
Q2. Which type of economy is characterized by government ownership of factors of
production and centralized planning of supply, demand, and pricing?
A. Market economy
B. Mixed economy
C. Command economy
D. Traditional economy
,Correct Answer: C. Command economy
In a command economy, the government owns or controls the factors of production and
makes all decisions about what to produce, how to produce it, and who receives the output.
Prices are set by government planners rather than market forces .
Q3. What is the primary characteristic of a market economy?
A. Heavy government regulation of all industries
B. A hands-off government approach known as laissez-faire
C. Government ownership of all major industries
D. Complete absence of any government involvement
Correct Answer: B. A hands-off government approach known as laissez-faire
A market economy features private ownership of resources and decentralized decision-
making by individuals and firms. The government takes a hands-off approach, allowing
supply and demand to determine prices and production .
Q4. Which economic system is most common among countries today?
A. Command economy
B. Pure market economy
C. Mixed economy
D. Traditional economy
Correct Answer: C. Mixed economy
,Most countries today operate as mixed economies, combining elements of market and
command systems. While private enterprise dominates, governments intervene through
regulation, taxation, and public services to address market failures and social welfare .
Q5. What is the difference between democracy and totalitarianism in terms of global
business implications?
A. Democracies always have better business environments than totalitarian regimes
B. Democracies protect property rights, while totalitarian regimes may not
C. There is no meaningful difference for business operations
D. Totalitarian regimes always have faster economic growth
Correct Answer: B. Democracies protect property rights, while totalitarian regimes
may not
Democracies typically provide stronger legal protections for property rights and contracts,
which reduces business risk. Totalitarian regimes may pose higher political risk due to less
predictable policy changes and weaker rule of law .
Q6. Which type of legal system is based on religious teachings and principles?
A. Common law
B. Civil law
C. Theocratic law
D. Administrative law
Correct Answer: C. Theocratic law
, Theocratic law is based on religious teachings and principles, such as Islamic Sharia law. It
shapes business practices, property rights, and commercial transactions in countries where
it is the dominant legal system .
Q7. What is the difference between common law and civil law systems?
A. Common law relies on judicial precedent while civil law relies on comprehensive legal
codes
B. Common law is older than civil law
C. Civil law is only used in the United States
D. There is no meaningful difference between the two
Correct Answer: A. Common law relies on judicial precedent while civil law relies on
comprehensive legal codes
Common law systems (used in the UK, US, and former British colonies) rely heavily on
judicial precedent and case law. Civil law systems (used in continental Europe and many
other countries) are based on comprehensive written legal codes that judges apply to
cases .
Q8. Which statement about property rights is correct?
A. Property rights are only relevant in developed countries
B. Strong property rights reduce business uncertainty and encourage investment
C. Property rights are the same in all legal systems
D. Property rights only apply to physical assets
Correct Answer: B. Strong property rights reduce business uncertainty and
encourage investment
Comprehensive Practice Questions with Correct Answers
and Detailed Explanations Latest update this Year instant
pdf 100% Verified
Q1. What is the core proposition of an institution-based view of global business?
A. Institutions are irrelevant to business operations
B. Institutions are the "rules of the game" that shape competition and international trade
C. Only formal institutions matter for business success
D. Institutions only affect domestic businesses, not global firms
Correct Answer: B. Institutions are the "rules of the game" that shape competition
and international trade
Institutions reduce uncertainty by establishing the formal and informal rules that govern
business conduct. The institution-based view emphasizes that both formal (laws,
regulations) and informal (culture, ethics) institutions impact business decisions globally .
Q2. Which type of economy is characterized by government ownership of factors of
production and centralized planning of supply, demand, and pricing?
A. Market economy
B. Mixed economy
C. Command economy
D. Traditional economy
,Correct Answer: C. Command economy
In a command economy, the government owns or controls the factors of production and
makes all decisions about what to produce, how to produce it, and who receives the output.
Prices are set by government planners rather than market forces .
Q3. What is the primary characteristic of a market economy?
A. Heavy government regulation of all industries
B. A hands-off government approach known as laissez-faire
C. Government ownership of all major industries
D. Complete absence of any government involvement
Correct Answer: B. A hands-off government approach known as laissez-faire
A market economy features private ownership of resources and decentralized decision-
making by individuals and firms. The government takes a hands-off approach, allowing
supply and demand to determine prices and production .
Q4. Which economic system is most common among countries today?
A. Command economy
B. Pure market economy
C. Mixed economy
D. Traditional economy
Correct Answer: C. Mixed economy
,Most countries today operate as mixed economies, combining elements of market and
command systems. While private enterprise dominates, governments intervene through
regulation, taxation, and public services to address market failures and social welfare .
Q5. What is the difference between democracy and totalitarianism in terms of global
business implications?
A. Democracies always have better business environments than totalitarian regimes
B. Democracies protect property rights, while totalitarian regimes may not
C. There is no meaningful difference for business operations
D. Totalitarian regimes always have faster economic growth
Correct Answer: B. Democracies protect property rights, while totalitarian regimes
may not
Democracies typically provide stronger legal protections for property rights and contracts,
which reduces business risk. Totalitarian regimes may pose higher political risk due to less
predictable policy changes and weaker rule of law .
Q6. Which type of legal system is based on religious teachings and principles?
A. Common law
B. Civil law
C. Theocratic law
D. Administrative law
Correct Answer: C. Theocratic law
, Theocratic law is based on religious teachings and principles, such as Islamic Sharia law. It
shapes business practices, property rights, and commercial transactions in countries where
it is the dominant legal system .
Q7. What is the difference between common law and civil law systems?
A. Common law relies on judicial precedent while civil law relies on comprehensive legal
codes
B. Common law is older than civil law
C. Civil law is only used in the United States
D. There is no meaningful difference between the two
Correct Answer: A. Common law relies on judicial precedent while civil law relies on
comprehensive legal codes
Common law systems (used in the UK, US, and former British colonies) rely heavily on
judicial precedent and case law. Civil law systems (used in continental Europe and many
other countries) are based on comprehensive written legal codes that judges apply to
cases .
Q8. Which statement about property rights is correct?
A. Property rights are only relevant in developed countries
B. Strong property rights reduce business uncertainty and encourage investment
C. Property rights are the same in all legal systems
D. Property rights only apply to physical assets
Correct Answer: B. Strong property rights reduce business uncertainty and
encourage investment
