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WGU D089 Principles Of Economics Objective
Assessment Final Verified Exam (2 Latest Versions)
Newest 2026/2027 Actual Verified Exam Complete 200
Questions And Correct Answers| Already Graded
A+||Newest Exam!!!
Why do economists use real GDP instead of nominal GDP
when they want to compare one year's output
What is the difference between the HHI and the 4-firm
concentration ratio? - ANSWER-the 4 firm concentration
ratio is the total of market shares for the first 4 firms and
the HHI is the squares of every market share
the higher the concentration ratio, the less likely two firms
will join with each other
The table below lists the market shares for each of the
firms in the industry. Use the data in the table to calculate
the HHI and the 4-firm concentration ratio.
Firm Percent of Market
Firm A 30%
Firm B 20%
Firm C 20%
,2|Page
Firm D 15%
Firm E 15% - ANSWER-4 firm ratio is: 30% + 20% + 20%
+ 15% = 85
HHI ratio is: 30x30 + 20x20 + 20x20 +15x15 = 1925
Using the expanded circular flow model, describe the
transactions that take place in the
a. Goods and services market?
b. Factor market?
c. Financial market? - ANSWER-A) Goods and Service
Market: The exchange of products between buyers and
sellers
B) Factor Market: Wages, profit, interest and rent
C) Financial Market: Borrowing, lending, and saving
What is the GDP and how is it calculated? - ANSWER-
Market value of all final goods and services produced in a
country in a year. GDP = consumption + investment +
Government + Net exports.
What is the largest component of GDP? - ANSWER-
consumer spending
,3|Page
Identify and explain two of the challenges to calculating
the GDP. - ANSWER-Making sure to only count the final
good and not double counting intermediate goods. Only
count the final goods that were made within the year
specified
Use the AS-AD model to explain what happens in each of
the following scenarios. In each case, begin with a graph
showing the economy in long run equilibrium. Move the
appropriate curve. Identify the new equilibrium explaining
what happens to price and GDP. In each case identify
whether the change results in an expansionary or a
recessionary gap.
a. Consumer confidence increases
b. Wages increase
c. An increase in capital generates higher labor
productivity - ANSWER-
Identify and describe the four functions of money. -
ANSWER-Identify and describe the four functions of
money.
Explain this
medium of exchange, a store of value, unit of account and
a standard of deferred payment
, 4|Page
What is included in the M1 measure of money? How does
this differ from the M2 measure of money? - ANSWER-M1
is monies that are very liquid such as cash, checkable
deposits, and traveler's checks.M2 is less liquid and
includes M1 plus those classified as near money like
savings, time deposits, certificates of deposits and money
market funds.
What is a fractional reserve banking system? - ANSWER-
banks keep a fraction of deposits as reserves and use the
rest to make loans
What are the responsibilities of the Federal Reserve? -
ANSWER-Promote financial stability, provide regulations
and banking services, and conduct monetary policy
. Using a graph of the money market, show what happens
to interest rates when the FED decreases the money
supply. - ANSWER-
Identify two factors that can shift the demand for money. -
ANSWER-Price level, inflation or income
How would an increase in the demand for money change
the interest rate? - ANSWER-An increase in the demand
WGU D089 Principles Of Economics Objective
Assessment Final Verified Exam (2 Latest Versions)
Newest 2026/2027 Actual Verified Exam Complete 200
Questions And Correct Answers| Already Graded
A+||Newest Exam!!!
Why do economists use real GDP instead of nominal GDP
when they want to compare one year's output
What is the difference between the HHI and the 4-firm
concentration ratio? - ANSWER-the 4 firm concentration
ratio is the total of market shares for the first 4 firms and
the HHI is the squares of every market share
the higher the concentration ratio, the less likely two firms
will join with each other
The table below lists the market shares for each of the
firms in the industry. Use the data in the table to calculate
the HHI and the 4-firm concentration ratio.
Firm Percent of Market
Firm A 30%
Firm B 20%
Firm C 20%
,2|Page
Firm D 15%
Firm E 15% - ANSWER-4 firm ratio is: 30% + 20% + 20%
+ 15% = 85
HHI ratio is: 30x30 + 20x20 + 20x20 +15x15 = 1925
Using the expanded circular flow model, describe the
transactions that take place in the
a. Goods and services market?
b. Factor market?
c. Financial market? - ANSWER-A) Goods and Service
Market: The exchange of products between buyers and
sellers
B) Factor Market: Wages, profit, interest and rent
C) Financial Market: Borrowing, lending, and saving
What is the GDP and how is it calculated? - ANSWER-
Market value of all final goods and services produced in a
country in a year. GDP = consumption + investment +
Government + Net exports.
What is the largest component of GDP? - ANSWER-
consumer spending
,3|Page
Identify and explain two of the challenges to calculating
the GDP. - ANSWER-Making sure to only count the final
good and not double counting intermediate goods. Only
count the final goods that were made within the year
specified
Use the AS-AD model to explain what happens in each of
the following scenarios. In each case, begin with a graph
showing the economy in long run equilibrium. Move the
appropriate curve. Identify the new equilibrium explaining
what happens to price and GDP. In each case identify
whether the change results in an expansionary or a
recessionary gap.
a. Consumer confidence increases
b. Wages increase
c. An increase in capital generates higher labor
productivity - ANSWER-
Identify and describe the four functions of money. -
ANSWER-Identify and describe the four functions of
money.
Explain this
medium of exchange, a store of value, unit of account and
a standard of deferred payment
, 4|Page
What is included in the M1 measure of money? How does
this differ from the M2 measure of money? - ANSWER-M1
is monies that are very liquid such as cash, checkable
deposits, and traveler's checks.M2 is less liquid and
includes M1 plus those classified as near money like
savings, time deposits, certificates of deposits and money
market funds.
What is a fractional reserve banking system? - ANSWER-
banks keep a fraction of deposits as reserves and use the
rest to make loans
What are the responsibilities of the Federal Reserve? -
ANSWER-Promote financial stability, provide regulations
and banking services, and conduct monetary policy
. Using a graph of the money market, show what happens
to interest rates when the FED decreases the money
supply. - ANSWER-
Identify two factors that can shift the demand for money. -
ANSWER-Price level, inflation or income
How would an increase in the demand for money change
the interest rate? - ANSWER-An increase in the demand
