WGU C211 EXAM / GLOBAL ECONOMICS EXAM / WGU C211
GLOBAL ECONOMICS OBJECTIVE ASSESSMENT ACTUAL
2026/2027 TESTBANK AND STUDY GUIDE COMPLETE
ACCURATE EXAM APPROVED QUESTIONS AND CORRECT
DETAILED ANSWERS WITH RATIONALES (100% CORRECT
VERIFIED SOLUTIONS) NEWEST UPDATED VERSION 2026
EDITION |(MOST RECENT!)
1. An institutional framework is made up of two types of systems. What are these
systems? (Choose TWO.)
A. Personal
B. Firm
C. Formal
D. Cognitive
E. Informal
F. Normative
Correct Answer: C and E
Rationale: The institutional framework that reduces uncertainty in an economy is
composed of formal and informal systems. Formal institutions include laws,
regulations, and property rights, while informal institutions encompass norms,
cultures, and ethics. These two systems interact to create the "rules of the game"
in any economic environment .
2. Which economist is credited with first noting the characteristics of a market
economy?
,A. Karl Marx
B. John Maynard Keynes
C. Adam Smith
D. Milton Friedman
Correct Answer: C
Rationale: Adam Smith laid the intellectual foundation for market economies in
his 1776 work, The Wealth of Nations. He introduced the concept of the "invisible
hand" where individuals pursuing their own self-interest unintentionally promote
the overall welfare of society .
3. What is the defining characteristic of a market economy?
A. Factors of production are government-owned.
B. Supply, demand, and pricing are planned by the government.
C. It is characterized by the "invisible hand" of market forces.
D. It found a near ideal in China and the former Soviet Union during communism.
Correct Answer: C
Rationale: A market economy is characterized by decentralized decision-making
and reliance on market forces, often referred to as the "invisible hand." Prices,
supply, and demand coordinate economic activity without centralized planning .
,4. Which of the following is a key feature of an oligopoly? (Choose THREE.)
A. There are a few sellers.
B. The actions of any one seller have little impact on others' profits.
C. The actions of any one seller can have a large impact on the profits of other
sellers.
D. Firms in an oligopoly are interdependent in ways competitive firms are not.
E. There is little motivation for cooperation between firms.
F. Firms are independent of one another, like competitive firms.
Correct Answer: A, C, and D
Rationale: Oligopolies are defined by a small number of dominant firms. Because
of this concentration, firms are interdependent; the actions of one seller
significantly impact the profits of other sellers, creating strategic rivalry .
5. Which of the following are examples of equity modes of entry? (Choose
THREE.)
A. Franchising
B. Licensing
C. Acquisitions
D. Greenfield investments
E. Strategic alliances
Correct Answer: C, D, and E
, Rationale: Equity modes of entry involve ownership stakes in foreign operations.
Strategic alliances often involve shared ownership, greenfield investments require
building new facilities from scratch, and acquisitions involve purchasing existing
foreign firms. Licensing and franchising are non-equity contractual modes .
6. Which scenario best demonstrates a monopoly created by a resource?
A. A software company copyrights the code for new software.
B. An author copyrights a new book.
C. A new rare jewel is found, and only one mine in the world has it.
D. A bridge is so infrequently used that it has a large fixed cost and negligible
marginal cost.
Correct Answer: C
Rationale: A resource-based monopoly arises when a single firm controls a
unique, scarce resource that cannot be easily replicated by competitors. The
exclusive control over the mine creates monopoly power based on natural
scarcity .
7. What is the primary difference between equity and non-equity modes of
international entry?
A. Equity modes require a long-term contract, while non-equity modes are short-
term.
B. Equity modes involve ownership and control, while non-equity modes do not.
GLOBAL ECONOMICS OBJECTIVE ASSESSMENT ACTUAL
2026/2027 TESTBANK AND STUDY GUIDE COMPLETE
ACCURATE EXAM APPROVED QUESTIONS AND CORRECT
DETAILED ANSWERS WITH RATIONALES (100% CORRECT
VERIFIED SOLUTIONS) NEWEST UPDATED VERSION 2026
EDITION |(MOST RECENT!)
1. An institutional framework is made up of two types of systems. What are these
systems? (Choose TWO.)
A. Personal
B. Firm
C. Formal
D. Cognitive
E. Informal
F. Normative
Correct Answer: C and E
Rationale: The institutional framework that reduces uncertainty in an economy is
composed of formal and informal systems. Formal institutions include laws,
regulations, and property rights, while informal institutions encompass norms,
cultures, and ethics. These two systems interact to create the "rules of the game"
in any economic environment .
2. Which economist is credited with first noting the characteristics of a market
economy?
,A. Karl Marx
B. John Maynard Keynes
C. Adam Smith
D. Milton Friedman
Correct Answer: C
Rationale: Adam Smith laid the intellectual foundation for market economies in
his 1776 work, The Wealth of Nations. He introduced the concept of the "invisible
hand" where individuals pursuing their own self-interest unintentionally promote
the overall welfare of society .
3. What is the defining characteristic of a market economy?
A. Factors of production are government-owned.
B. Supply, demand, and pricing are planned by the government.
C. It is characterized by the "invisible hand" of market forces.
D. It found a near ideal in China and the former Soviet Union during communism.
Correct Answer: C
Rationale: A market economy is characterized by decentralized decision-making
and reliance on market forces, often referred to as the "invisible hand." Prices,
supply, and demand coordinate economic activity without centralized planning .
,4. Which of the following is a key feature of an oligopoly? (Choose THREE.)
A. There are a few sellers.
B. The actions of any one seller have little impact on others' profits.
C. The actions of any one seller can have a large impact on the profits of other
sellers.
D. Firms in an oligopoly are interdependent in ways competitive firms are not.
E. There is little motivation for cooperation between firms.
F. Firms are independent of one another, like competitive firms.
Correct Answer: A, C, and D
Rationale: Oligopolies are defined by a small number of dominant firms. Because
of this concentration, firms are interdependent; the actions of one seller
significantly impact the profits of other sellers, creating strategic rivalry .
5. Which of the following are examples of equity modes of entry? (Choose
THREE.)
A. Franchising
B. Licensing
C. Acquisitions
D. Greenfield investments
E. Strategic alliances
Correct Answer: C, D, and E
, Rationale: Equity modes of entry involve ownership stakes in foreign operations.
Strategic alliances often involve shared ownership, greenfield investments require
building new facilities from scratch, and acquisitions involve purchasing existing
foreign firms. Licensing and franchising are non-equity contractual modes .
6. Which scenario best demonstrates a monopoly created by a resource?
A. A software company copyrights the code for new software.
B. An author copyrights a new book.
C. A new rare jewel is found, and only one mine in the world has it.
D. A bridge is so infrequently used that it has a large fixed cost and negligible
marginal cost.
Correct Answer: C
Rationale: A resource-based monopoly arises when a single firm controls a
unique, scarce resource that cannot be easily replicated by competitors. The
exclusive control over the mine creates monopoly power based on natural
scarcity .
7. What is the primary difference between equity and non-equity modes of
international entry?
A. Equity modes require a long-term contract, while non-equity modes are short-
term.
B. Equity modes involve ownership and control, while non-equity modes do not.
