WGU D089 Principles of Economics Test Bank 2026/2027 – Complete Questions and Answers

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WGU D089 Principles of Economics OA
Questions and Answers

10th (Principles of Economics ) - ANSWER ✔ There is short-run tradeoff
between inflation and unemployment.



1st (Principles of Economics ) - ANSWER ✔ Everyone faces tradeoffs



2nd (Principles of Economics ) - ANSWER ✔ The cost of something is
determined by what you give up to get it.



3rd (Principles of Economics ) - ANSWER ✔ Rational people think at the
margin.



4th (Principles of Economics ) - ANSWER ✔ People respond to incentives.



5th (Principles of Economics ) - ANSWER ✔ Trade can benefit everyone.



6th (Principles of Economics ) - ANSWER ✔ Markets are a sound method
of organizing economic activity.


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7th (Principles of Economics ) - ANSWER ✔ Government may be able to
improve market outcomes.



8th (Principles of Economics ) - ANSWER ✔ A nation's standard of living
depends on its ability to produce.



9th (Principles of Economics ) - ANSWER ✔ Printing too much money
causes prices to rise.



Absolute Advantage - ANSWER ✔ The capability to produce more of a
given product using less of a given resource than a competing entity



Absolute Quota - ANSWER ✔ Strictly limiting the quantity of goods that
may enter a country



Accounting Profit - ANSWER ✔ Total revenues - Explicit costs



Includes appreciation.




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Acquisition - ANSWER ✔ When one firm purchases another.



Ad Valorem Tariff - ANSWER ✔ Import tax based on a fixed percentage of
the assessed commercial value of imported goods



Adjustable Rate Mortgage - ANSWER ✔ A loan a borrower uses to
purchase a home and which the interest rate varies with the market interest
rates



Adverse Selection - ANSWER ✔ A process in which markets deteriorate
when buyers and sellers have access to different or imperfect information
also known as asymmetric information.



Aggregate Demand - ANSWER ✔ An economic measurement of the total
amount of demand for all finished goods and services produced in an
economy.



Aggregate Demand Aggregate Supply Model (AD-AS Model) - ANSWER ✔
A model that shows what determines total supply or total demand for the
economy and how total demand in total supply interact at the macro
economic level



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Aggregate Demand Curve - ANSWER ✔ Shows the total spending on
domestic goods and services at each price level



Aggregate Supply - ANSWER ✔ The total supply of goods and services
available to a particular market from producers.



Aggregate Supply Curve - ANSWER ✔ The total quantity of output that
firms will produce and sell at each price level



Allocative Efficiency - ANSWER ✔ Producing goods and services
demanded by consumers at a price that reflects the marginal cost



Allocative Efficiency - ANSWER ✔ Producing goods and services
demanded by consumers at a price that reflects the marginal cost.



Asset - ANSWER ✔ Something or someone of any value any portion of
one's property or effects so considered



Autarky - ANSWER ✔ National economic self sufficiency



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