1|Page
D089 / D 089 Pre – Assessment Exam | Principles of
Economics (Latest ) | Questions and
Answers with Rationale | Grade A | - WGU
Subject: Principles of Economics (Introductory/Micro & Macro)
Source: WGU D089 Pre-Assessment V2 Exam (2026/2027)
Format: Multiple-Choice Question Bank with Answers and Rationales
1. Which questions is answered when a society decides how to
distribute its scarce resources?
A. What, How, and for whom to produce goods and services
B. When, Where, and Why to produce goods and services
C. How much, How many, and How long to produce goods and services
D. Who, What, and When to produce goods and services
Correct Answer: A
Rationale:
1. The three fundamental economic questions every society must
answer are:
o What goods and services will be produced?
, 2|Page
o How will they be produced?
o For whom will they be produced?
2. This question directly addresses the core problem of resource
allocation in economics.
2. A local government is making public policy decisions about
spending funds. The residents have differing opinions on whether the
funds should be used for road repairs, school expansion, health care
increases or construction of a senior center. The local government
must decide the priority. Which economic question is this decision an
example of?
A. What to produce
B. How to produce
C. For whom to produce
D. When to produce
Correct Answer: A
Rationale:
1. The question of "What to produce" involves deciding which specific
goods and services will be created with available resources.
, 3|Page
2. Here, the government is choosing between different public goods and
services (roads, schools, healthcare, senior center), which is a direct
application of the "What to produce" question.
3. A newspaper is trying to help citizens understand economic
principle. Which misconception should the article address?
A. Increasing the money supply raises the standard of living for consumers
in the long run
B. Printing more money always leads to inflation
C. Government spending has no effect on economic growth
D. Taxes are always a burden on economic growth
Correct Answer: A
Rationale:
1. In the long run, simply increasing the money supply does not raise
real standards of living; it typically leads to inflation.
2. Real standards of living depend on productivity, resources, and
technology, not merely the quantity of money.
4. Which scenario covers a topic included in microeconomics?
A. The national unemployment rate rises to 5%
B. The Federal Reserve increases interest rates
, 4|Page
C. As a result of hard freeze, the price of cherries increase
D. The national GDP grows by 3%
Correct Answer: C
Rationale:
1. Microeconomics studies individual markets, prices, and decision-
making of consumers and firms.
2. The effect of a freeze on the price of a specific good (cherries) is a
classic microeconomic topic of supply, demand, and market price.
5. What accurately characterizes capital?
A. It is only physical machinery
B. It can be in the form of intellectual discoveries
C. It includes only financial assets like stocks and bonds
D. It is synonymous with natural resources
Correct Answer: B
Rationale:
1. In economics, capital includes not only physical assets (tools,
machines) but also human capital and intellectual capital (ideas,
innovations, discoveries).
2. Intellectual discoveries are a form of capital because they enhance
productivity and economic growth.
D089 / D 089 Pre – Assessment Exam | Principles of
Economics (Latest ) | Questions and
Answers with Rationale | Grade A | - WGU
Subject: Principles of Economics (Introductory/Micro & Macro)
Source: WGU D089 Pre-Assessment V2 Exam (2026/2027)
Format: Multiple-Choice Question Bank with Answers and Rationales
1. Which questions is answered when a society decides how to
distribute its scarce resources?
A. What, How, and for whom to produce goods and services
B. When, Where, and Why to produce goods and services
C. How much, How many, and How long to produce goods and services
D. Who, What, and When to produce goods and services
Correct Answer: A
Rationale:
1. The three fundamental economic questions every society must
answer are:
o What goods and services will be produced?
, 2|Page
o How will they be produced?
o For whom will they be produced?
2. This question directly addresses the core problem of resource
allocation in economics.
2. A local government is making public policy decisions about
spending funds. The residents have differing opinions on whether the
funds should be used for road repairs, school expansion, health care
increases or construction of a senior center. The local government
must decide the priority. Which economic question is this decision an
example of?
A. What to produce
B. How to produce
C. For whom to produce
D. When to produce
Correct Answer: A
Rationale:
1. The question of "What to produce" involves deciding which specific
goods and services will be created with available resources.
, 3|Page
2. Here, the government is choosing between different public goods and
services (roads, schools, healthcare, senior center), which is a direct
application of the "What to produce" question.
3. A newspaper is trying to help citizens understand economic
principle. Which misconception should the article address?
A. Increasing the money supply raises the standard of living for consumers
in the long run
B. Printing more money always leads to inflation
C. Government spending has no effect on economic growth
D. Taxes are always a burden on economic growth
Correct Answer: A
Rationale:
1. In the long run, simply increasing the money supply does not raise
real standards of living; it typically leads to inflation.
2. Real standards of living depend on productivity, resources, and
technology, not merely the quantity of money.
4. Which scenario covers a topic included in microeconomics?
A. The national unemployment rate rises to 5%
B. The Federal Reserve increases interest rates
, 4|Page
C. As a result of hard freeze, the price of cherries increase
D. The national GDP grows by 3%
Correct Answer: C
Rationale:
1. Microeconomics studies individual markets, prices, and decision-
making of consumers and firms.
2. The effect of a freeze on the price of a specific good (cherries) is a
classic microeconomic topic of supply, demand, and market price.
5. What accurately characterizes capital?
A. It is only physical machinery
B. It can be in the form of intellectual discoveries
C. It includes only financial assets like stocks and bonds
D. It is synonymous with natural resources
Correct Answer: B
Rationale:
1. In economics, capital includes not only physical assets (tools,
machines) but also human capital and intellectual capital (ideas,
innovations, discoveries).
2. Intellectual discoveries are a form of capital because they enhance
productivity and economic growth.
