WGU D089 LATEST EXAM PRINCIPLES OF
ECONOMICS EXAM QUESTIONS AND
CORRECT ANSWERS | LATEST VERSION |
ALREADY GRADED A+ | RECENT VERSION
Investment (Business Spending) - ANSWER Investment refers to the purchase
of new capital goods, new commercial real estate and equipment, residential
housing construction, and inventories.
Government Spending - ANSWER All government consumption, investment,
and transfer payments
Deficit - ANSWER An excess of expenditure or liabilities over income or
assets in a given period.
Surplus - ANSWER Occurs when income earned exceeds expenses paid.
Net Exports - ANSWER The difference between the monetary value of exports
and imports.
Imports - ANSWER A commodity article or service brought in from abroad to
sale.
Trade Balance - ANSWER The gap between exports and imports
, Double Counting - ANSWER A potential mistake to avoid in measuring GDP,
in which output is counted more than once as it travels through the stages of
production
Intermediate Goods - ANSWER A product to produce a final good or finished
product.
Nominal GDP - ANSWER The value of all goods taking price changes into
account.
Real GDP - ANSWER The value of all goods produced in a given year.
Depression - ANSWER An especially lengthy and deep decline in output
Peak - ANSWER During the business cycle, the highest point of output before a
recession begins
Trough - ANSWER During the business cycle, the lowest point of output in a
recession, before a recovery begins
Business Cycle - ANSWER The economy's relatively short term movement in
and out of recession.
Standard of Living - ANSWER All elements that affect people's happiness,
whether people buy or sell these elements in the market.
,Employed - ANSWER Those who are currently working for pay.
Out of the Labor Force - ANSWER Those who are not working and not looking
for work—whether they want employment or not; also termed "not in the labor
force"
Underemployed - ANSWER Employed in a job that offers fewer work hours
than desired.
Hidden Unemployment - ANSWER People who are jobless but official
unemployment figures do not include them.
Discouraged Workers - ANSWER Those who have stopped looking for
employment due to the lack of suitable positions available
Frictional Unemployment - ANSWER Unemployment that occurs as workers
move between jobs.
Structural Unemployment - ANSWER Unemployment that occurs because
individuals lack skills valued by employers.
Cyclical Unemployment - ANSWER Unemployment that results when the
overall demand for goods and services in an economy cannot support full
employment. it occurs during periods of slow economic growth or during periods
of economic contraction.
, Natural Rate of Unemployment - ANSWER The unemployment rate that would
exist in a growing and healthy economy from the combination of economic. social,
and political factors that exist at a given time.
Basket of Goods and Services - ANSWER A fixed set of consumer products
and services valued on an annual basis.
Base Year - ANSWER Starting point from which changes in prices are
measured.
Consumer Price Index - ANSWER A measure of inflation that the U.S.
Government statisticians calculate on the price level from a fixed basket of goods
and services that represents the average consumers purchases.
Substitution Bias - ANSWER An inflation rate calculated using a fixed basket
of goods over time tends to overstate the true rise in the cost of living because it
does not take into account that the person can substitute away from goods whose
prices rise considerably.
Quality and New Goods Bias - ANSWER Inflation calculated using a fixed
basket of goods over time tends to overstate the true rise in cost of living because it
does not account for improvements in the quality of existing goods or the invention
of new goods
Hyperinflation - ANSWER Rapid excessive and out of control price increases
in an economy.
ECONOMICS EXAM QUESTIONS AND
CORRECT ANSWERS | LATEST VERSION |
ALREADY GRADED A+ | RECENT VERSION
Investment (Business Spending) - ANSWER Investment refers to the purchase
of new capital goods, new commercial real estate and equipment, residential
housing construction, and inventories.
Government Spending - ANSWER All government consumption, investment,
and transfer payments
Deficit - ANSWER An excess of expenditure or liabilities over income or
assets in a given period.
Surplus - ANSWER Occurs when income earned exceeds expenses paid.
Net Exports - ANSWER The difference between the monetary value of exports
and imports.
Imports - ANSWER A commodity article or service brought in from abroad to
sale.
Trade Balance - ANSWER The gap between exports and imports
, Double Counting - ANSWER A potential mistake to avoid in measuring GDP,
in which output is counted more than once as it travels through the stages of
production
Intermediate Goods - ANSWER A product to produce a final good or finished
product.
Nominal GDP - ANSWER The value of all goods taking price changes into
account.
Real GDP - ANSWER The value of all goods produced in a given year.
Depression - ANSWER An especially lengthy and deep decline in output
Peak - ANSWER During the business cycle, the highest point of output before a
recession begins
Trough - ANSWER During the business cycle, the lowest point of output in a
recession, before a recovery begins
Business Cycle - ANSWER The economy's relatively short term movement in
and out of recession.
Standard of Living - ANSWER All elements that affect people's happiness,
whether people buy or sell these elements in the market.
,Employed - ANSWER Those who are currently working for pay.
Out of the Labor Force - ANSWER Those who are not working and not looking
for work—whether they want employment or not; also termed "not in the labor
force"
Underemployed - ANSWER Employed in a job that offers fewer work hours
than desired.
Hidden Unemployment - ANSWER People who are jobless but official
unemployment figures do not include them.
Discouraged Workers - ANSWER Those who have stopped looking for
employment due to the lack of suitable positions available
Frictional Unemployment - ANSWER Unemployment that occurs as workers
move between jobs.
Structural Unemployment - ANSWER Unemployment that occurs because
individuals lack skills valued by employers.
Cyclical Unemployment - ANSWER Unemployment that results when the
overall demand for goods and services in an economy cannot support full
employment. it occurs during periods of slow economic growth or during periods
of economic contraction.
, Natural Rate of Unemployment - ANSWER The unemployment rate that would
exist in a growing and healthy economy from the combination of economic. social,
and political factors that exist at a given time.
Basket of Goods and Services - ANSWER A fixed set of consumer products
and services valued on an annual basis.
Base Year - ANSWER Starting point from which changes in prices are
measured.
Consumer Price Index - ANSWER A measure of inflation that the U.S.
Government statisticians calculate on the price level from a fixed basket of goods
and services that represents the average consumers purchases.
Substitution Bias - ANSWER An inflation rate calculated using a fixed basket
of goods over time tends to overstate the true rise in the cost of living because it
does not take into account that the person can substitute away from goods whose
prices rise considerably.
Quality and New Goods Bias - ANSWER Inflation calculated using a fixed
basket of goods over time tends to overstate the true rise in cost of living because it
does not account for improvements in the quality of existing goods or the invention
of new goods
Hyperinflation - ANSWER Rapid excessive and out of control price increases
in an economy.
