WGU C211 OA GLOBAL ECONOMICS EXAM
2026 FULL PREPARATION AND PRACTICE PACK
◉ Dirty (or managed) float. Answer: The common practice of
determining exchange rates through selective government
intervention.
◉ Fixed rate policy. Answer: Fixing the exchange rate of a currency
relative to other currencies.
◉ Floating (or flexible) exchange rate policy. Answer: The
willingness of a government to let the demand and supply
conditions determine exchange rates.
◉ Foreign exchange market. Answer: A market where individuals,
firms, governments, and banks buy and sell foreign currencies.
◉ Foreign exchange rate. Answer: The price of one currency in terms
of another.
◉ Forward discount. Answer: When the forward rate of one
currency relative to another currency is higher than the spot rate.
,◉ Forward premium. Answer: when the forward rate of one
currency relative to another currency is lower than the spot rate.
◉ Forward transaction. Answer: a foreign exchange transaction in
which participants buy and sell currencies now for future delivery,
typically in 30, 90, or 180 days, after the date of the transaction.
◉ Gold standard. Answer: a system in which the value of most major
currencies was maintained by fixing their prices in terms of gold,
which served as the Common denominator.
◉ International Monetary Fund (IMF). Answer: an international
organization of 185 member countries that was established to
promote international monetary cooperation, exchange stability, and
orderly exchange arrangements; to foster economic growth and high
levels of employment; and to provide temporary financial assistance
to countries to help ease balance of payments adjustment.
◉ Moral hazard. Answer: refers to recklessness when people and
organizations (including governments) do not have to face the full
consequences of their actions.
◉ Offer rate. Answer: the price offered to sell a currency.
, ◉ Peg. Answer: a stabilizing policy of linking a developing country's
currency to a key currency.
◉ Post-Bretton Woods system. Answer: a system of flexible
exchange rate regimes with no official common denominator.
◉ Purchasing power parity. Answer: a theory that suggests that in
the absence of trade barriers (such as tariffs), the price for identical
products sold in different countries must be the same.
◉ Quota. Answer: the financial contribution, capacity to borrow, and
voting power of IMF member countries that is based broadly on its
relative size in the global economy.
◉ Spot transaction. Answer: the classic single-shot exchange of one
currency for another.
◉ Spread. Answer: the difference between the offered price and the
bid price.
◉ Strategic hedging. Answer: spreading out activities in a number of
countries in different currency zones to offset the currency losses in
certain regions through gains in other regions.
2026 FULL PREPARATION AND PRACTICE PACK
◉ Dirty (or managed) float. Answer: The common practice of
determining exchange rates through selective government
intervention.
◉ Fixed rate policy. Answer: Fixing the exchange rate of a currency
relative to other currencies.
◉ Floating (or flexible) exchange rate policy. Answer: The
willingness of a government to let the demand and supply
conditions determine exchange rates.
◉ Foreign exchange market. Answer: A market where individuals,
firms, governments, and banks buy and sell foreign currencies.
◉ Foreign exchange rate. Answer: The price of one currency in terms
of another.
◉ Forward discount. Answer: When the forward rate of one
currency relative to another currency is higher than the spot rate.
,◉ Forward premium. Answer: when the forward rate of one
currency relative to another currency is lower than the spot rate.
◉ Forward transaction. Answer: a foreign exchange transaction in
which participants buy and sell currencies now for future delivery,
typically in 30, 90, or 180 days, after the date of the transaction.
◉ Gold standard. Answer: a system in which the value of most major
currencies was maintained by fixing their prices in terms of gold,
which served as the Common denominator.
◉ International Monetary Fund (IMF). Answer: an international
organization of 185 member countries that was established to
promote international monetary cooperation, exchange stability, and
orderly exchange arrangements; to foster economic growth and high
levels of employment; and to provide temporary financial assistance
to countries to help ease balance of payments adjustment.
◉ Moral hazard. Answer: refers to recklessness when people and
organizations (including governments) do not have to face the full
consequences of their actions.
◉ Offer rate. Answer: the price offered to sell a currency.
, ◉ Peg. Answer: a stabilizing policy of linking a developing country's
currency to a key currency.
◉ Post-Bretton Woods system. Answer: a system of flexible
exchange rate regimes with no official common denominator.
◉ Purchasing power parity. Answer: a theory that suggests that in
the absence of trade barriers (such as tariffs), the price for identical
products sold in different countries must be the same.
◉ Quota. Answer: the financial contribution, capacity to borrow, and
voting power of IMF member countries that is based broadly on its
relative size in the global economy.
◉ Spot transaction. Answer: the classic single-shot exchange of one
currency for another.
◉ Spread. Answer: the difference between the offered price and the
bid price.
◉ Strategic hedging. Answer: spreading out activities in a number of
countries in different currency zones to offset the currency losses in
certain regions through gains in other regions.
