C211 Global Economics FINAL EXAM
(2025/2026) – Complete Questions & Verified
Answers (Graded A+)
Most Tested Questions for WGU C211 – Global Economics
Comprehensive Practice Exam Covering Microeconomics, Macroeconomics, International
Trade, Fiscal & Monetary Policy, Exchange Rates, and Global Market Trends.
Q1. When a country imposes tariffs on imported goods, the primary effect is:
A) Increase in imports
B) Decrease in imports and potential increase in domestic production
C) Reduction of domestic prices
D) Increase in international trade efficiency
Rationale: Tariffs make imported goods more expensive, encouraging domestic
production and reducing imports.
Q2. The concept of comparative advantage explains that a country should:
A) Produce everything domestically
B) Specialize in goods it can produce at a lower opportunity cost
C) Only export goods
D) Avoid trade entirely
Rationale: Comparative advantage maximizes efficiency and gains from trade by
focusing on lower opportunity costs.
Q3. Which policy would a government use to combat inflation in an economy?
A) Increase government spending
B) Reduce taxes
C) Decrease money supply or increase interest rates
D) Subsidize exports
,Rationale: Contractionary monetary policy reduces aggregate demand, helping
control inflation.
Q4. When a country’s currency appreciates, it generally:
A) Makes exports cheaper
B) Makes imports cheaper and exports more expensive
C) Has no effect on trade balance
D) Increases domestic inflation automatically
Rationale: Stronger currency increases the purchasing power of imports but can
reduce export competitiveness.
Q5. GDP measures:
A) Total household wealth
B) Market value of all final goods and services produced within a country
C) National debt
D) Total population income
Rationale: GDP focuses on production within national borders, ignoring
intermediate goods.
Q6. Unemployment caused by technological change is called:
A) Frictional
B) Cyclical
C) Seasonal
D) Structural
Rationale: Structural unemployment occurs when skills mismatch new
technologies or industries.
Q7. Expansionary fiscal policy typically involves:
A) Higher taxes and reduced spending
B) Lower taxes and/or increased government spending
,C) Restricting credit
D) Imposing tariffs
Rationale: Expansionary fiscal policy boosts aggregate demand to stimulate
economic growth.
Q8. The law of demand states that, all else equal:
A) Price and quantity demanded move in the same direction
B) Price has no effect on demand
C) As price rises, quantity demanded falls
D) Supply determines demand
Rationale: Higher prices discourage consumption, leading to lower quantity
demanded.
Q9. A country running a trade deficit is experiencing:
A) Imports greater than exports
B) Exports greater than imports
C) Balanced trade
D) No impact on currency
Rationale: Trade deficit occurs when a country imports more goods and services
than it exports.
Q10. Central banks control money supply primarily through:
A) Government budgets
B) Open market operations, reserve requirements, and discount rates
C) Tariffs
D) Wage controls
Rationale: Monetary policy tools influence interest rates and liquidity to manage
inflation and growth.
, Q11. If aggregate demand decreases, in the short run, we expect:
A) Higher GDP and inflation
B) Lower GDP and lower inflation
C) Higher unemployment only
D) No effect on output
Rationale: Lower demand reduces output and price levels in the short term.
Q12. Which of the following is an example of a positive externality?
A) Pollution from a factory
B) Traffic congestion
C) Vaccinations improving public health
D) Noise from construction
Rationale: Positive externalities provide benefits to third parties.
Q13. Inflation caused by rising production costs is called:
A) Demand-pull inflation
B) Cost-push inflation
C) Hyperinflation
D) Stagflation
Rationale: Cost-push inflation occurs when higher production costs shift supply
curves upward.
Q14. If the central bank buys government bonds, what is the expected effect?
A) Decrease money supply
B) Increase interest rates
C) Increase money supply and lower interest rates
D) Reduce fiscal deficit
Rationale: Open market purchases inject money into the economy, lowering
interest rates.
(2025/2026) – Complete Questions & Verified
Answers (Graded A+)
Most Tested Questions for WGU C211 – Global Economics
Comprehensive Practice Exam Covering Microeconomics, Macroeconomics, International
Trade, Fiscal & Monetary Policy, Exchange Rates, and Global Market Trends.
Q1. When a country imposes tariffs on imported goods, the primary effect is:
A) Increase in imports
B) Decrease in imports and potential increase in domestic production
C) Reduction of domestic prices
D) Increase in international trade efficiency
Rationale: Tariffs make imported goods more expensive, encouraging domestic
production and reducing imports.
Q2. The concept of comparative advantage explains that a country should:
A) Produce everything domestically
B) Specialize in goods it can produce at a lower opportunity cost
C) Only export goods
D) Avoid trade entirely
Rationale: Comparative advantage maximizes efficiency and gains from trade by
focusing on lower opportunity costs.
Q3. Which policy would a government use to combat inflation in an economy?
A) Increase government spending
B) Reduce taxes
C) Decrease money supply or increase interest rates
D) Subsidize exports
,Rationale: Contractionary monetary policy reduces aggregate demand, helping
control inflation.
Q4. When a country’s currency appreciates, it generally:
A) Makes exports cheaper
B) Makes imports cheaper and exports more expensive
C) Has no effect on trade balance
D) Increases domestic inflation automatically
Rationale: Stronger currency increases the purchasing power of imports but can
reduce export competitiveness.
Q5. GDP measures:
A) Total household wealth
B) Market value of all final goods and services produced within a country
C) National debt
D) Total population income
Rationale: GDP focuses on production within national borders, ignoring
intermediate goods.
Q6. Unemployment caused by technological change is called:
A) Frictional
B) Cyclical
C) Seasonal
D) Structural
Rationale: Structural unemployment occurs when skills mismatch new
technologies or industries.
Q7. Expansionary fiscal policy typically involves:
A) Higher taxes and reduced spending
B) Lower taxes and/or increased government spending
,C) Restricting credit
D) Imposing tariffs
Rationale: Expansionary fiscal policy boosts aggregate demand to stimulate
economic growth.
Q8. The law of demand states that, all else equal:
A) Price and quantity demanded move in the same direction
B) Price has no effect on demand
C) As price rises, quantity demanded falls
D) Supply determines demand
Rationale: Higher prices discourage consumption, leading to lower quantity
demanded.
Q9. A country running a trade deficit is experiencing:
A) Imports greater than exports
B) Exports greater than imports
C) Balanced trade
D) No impact on currency
Rationale: Trade deficit occurs when a country imports more goods and services
than it exports.
Q10. Central banks control money supply primarily through:
A) Government budgets
B) Open market operations, reserve requirements, and discount rates
C) Tariffs
D) Wage controls
Rationale: Monetary policy tools influence interest rates and liquidity to manage
inflation and growth.
, Q11. If aggregate demand decreases, in the short run, we expect:
A) Higher GDP and inflation
B) Lower GDP and lower inflation
C) Higher unemployment only
D) No effect on output
Rationale: Lower demand reduces output and price levels in the short term.
Q12. Which of the following is an example of a positive externality?
A) Pollution from a factory
B) Traffic congestion
C) Vaccinations improving public health
D) Noise from construction
Rationale: Positive externalities provide benefits to third parties.
Q13. Inflation caused by rising production costs is called:
A) Demand-pull inflation
B) Cost-push inflation
C) Hyperinflation
D) Stagflation
Rationale: Cost-push inflation occurs when higher production costs shift supply
curves upward.
Q14. If the central bank buys government bonds, what is the expected effect?
A) Decrease money supply
B) Increase interest rates
C) Increase money supply and lower interest rates
D) Reduce fiscal deficit
Rationale: Open market purchases inject money into the economy, lowering
interest rates.
