Economics WGU D089 Exam Questions with Correct Answers 100% Verified By Experts|
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A new immigration policy has increased the number of skilled immigrants who can legally come
to the country, and this increases the economy's productivity.
How will the long-run aggregate supply (LRAS) curve respond to this situation?
Shifts to the right
Remains the same
Becomes horizontal
Shifts to the left Shifts to the right
Correct! Increase in productivity shifts the LRAS curve to the right.
What is a disadvantage of exporting goods and services to other countries?
Companies retain ownership of production instead of licensing the manufacturing of their
products.
Local companies do not achieve economies of scale, increasing the cost of their products.
Exports potentially add another layer in the chain of distribution through wholesalers.
International markets decrease efficiency and income of local producers. Exports potentially
add another layer in the chain of distribution through wholesalers.
Correct! Wholesalers, importing companies, and other intermediaries are part of international
trade distribution chains. Their existence facilitates trade across borders but adds costs to
international trade transactions.
The U.S. Bureau of Labor Statistics (BLS) uses the cost of a fixed basket that represents the
average family's purchases to calculate a measure of inflation. Which measure is being
calculated?
Substitution bias
Consumer price index
,Hyperinflation rate
Cost-of-living adjustments Consumer price index
Correct! Consumer price index is a measure of inflation that U.S. government statisticians
calculate based on the price level from a fixed basket of goods and services that represents the
average consumer's purchases.
The University of Michigan's "Surveys of Consumers" has shown a sharp decline in consumer
confidence.
How will this change affect aggregate demand?
There will be movement down and to the right along the aggregate demand curve.
There will be movement up and to the left along the aggregate demand curve.
The aggregate demand curve will shift to the left.
The aggregate demand curve will shift to the right. The aggregate demand curve will shift to
the left.
Correct! Consumer confidence is a principal component of aggregate demand. Declining
consumer confidence will reduce consumption, so aggregate demand will decrease, shifting the
curve to the left.
The economy is in a recessionary gap, so the government enacts an expansionary monetary
policy. Which effect will this action have on the aggregate demand curve?
Becomes flatter
Shifts to the left
Shifts to the right
Becomes steeper Shifts to the right
Correct! If the government enacts an expansionary monetary policy, interest rates are reduced.
This causes consumption to increase, which shifts the aggregate demand curve to the right.
,What is the opportunity cost of corn?
300 potatoes
500 corn
0.60 potatoes
1.67 corn
1.67 potatoes
0.60 corn 0.60 potatoes
Correct! The calculation for the opportunity cost of corn is (300 potatoes)/(500 corn) = (3/5
potatoes)/(1 corn) = (0.6 potatoes)/(1 corn).
Which tool does the Federal Reserve use to increase the money supply?
Open market purchase of securities
Personal income tax rate increases
Personal income tax rate decreases
Open market sale of securities
Correct! An open market purchase of securities by the Federal Reserve increases the money
supply. Open market purchase of securities
Correct! An open market purchase of securities by the Federal Reserve increases the money
supply.
Which element is included in the calculation for government spending as a component of gross
domestic product (GDP)?
Medicare insurance
Unemployment benefits
New highway construction
, Social Security benefits New highway construction
Correct! Building a new highway is considered a good or service expenditure for the calculation
of GDP.
Nominal wages increase across the country. How does this change the short-run aggregate
supply (SRAS) curve?
The curve bows outward.
The curve shifts to the left.
The curve bows inward.
The curve shifts to the right. The curve shifts to the left.
Correct! An increase in the cost of labor will cause the curve to shift to the left since labor is a
key input for other products.
A new immigration policy has increased the number of skilled immigrants who can legally come
to the country, and this increases the economy's productivity.
How will the long-run aggregate supply (LRAS) curve respond to this situation?
Shifts to the right
Remains the same
Becomes horizontal
Shifts to the left Shifts to the right
Correct! Increase in productivity shifts the LRAS curve to the right.
A country's interest rates have fallen. How will this change affect the equilibrium?
The new equilibrium occurs at a lower price and lower GDP.
The new equilibrium occurs at a higher price and lower GDP.
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A new immigration policy has increased the number of skilled immigrants who can legally come
to the country, and this increases the economy's productivity.
How will the long-run aggregate supply (LRAS) curve respond to this situation?
Shifts to the right
Remains the same
Becomes horizontal
Shifts to the left Shifts to the right
Correct! Increase in productivity shifts the LRAS curve to the right.
What is a disadvantage of exporting goods and services to other countries?
Companies retain ownership of production instead of licensing the manufacturing of their
products.
Local companies do not achieve economies of scale, increasing the cost of their products.
Exports potentially add another layer in the chain of distribution through wholesalers.
International markets decrease efficiency and income of local producers. Exports potentially
add another layer in the chain of distribution through wholesalers.
Correct! Wholesalers, importing companies, and other intermediaries are part of international
trade distribution chains. Their existence facilitates trade across borders but adds costs to
international trade transactions.
The U.S. Bureau of Labor Statistics (BLS) uses the cost of a fixed basket that represents the
average family's purchases to calculate a measure of inflation. Which measure is being
calculated?
Substitution bias
Consumer price index
,Hyperinflation rate
Cost-of-living adjustments Consumer price index
Correct! Consumer price index is a measure of inflation that U.S. government statisticians
calculate based on the price level from a fixed basket of goods and services that represents the
average consumer's purchases.
The University of Michigan's "Surveys of Consumers" has shown a sharp decline in consumer
confidence.
How will this change affect aggregate demand?
There will be movement down and to the right along the aggregate demand curve.
There will be movement up and to the left along the aggregate demand curve.
The aggregate demand curve will shift to the left.
The aggregate demand curve will shift to the right. The aggregate demand curve will shift to
the left.
Correct! Consumer confidence is a principal component of aggregate demand. Declining
consumer confidence will reduce consumption, so aggregate demand will decrease, shifting the
curve to the left.
The economy is in a recessionary gap, so the government enacts an expansionary monetary
policy. Which effect will this action have on the aggregate demand curve?
Becomes flatter
Shifts to the left
Shifts to the right
Becomes steeper Shifts to the right
Correct! If the government enacts an expansionary monetary policy, interest rates are reduced.
This causes consumption to increase, which shifts the aggregate demand curve to the right.
,What is the opportunity cost of corn?
300 potatoes
500 corn
0.60 potatoes
1.67 corn
1.67 potatoes
0.60 corn 0.60 potatoes
Correct! The calculation for the opportunity cost of corn is (300 potatoes)/(500 corn) = (3/5
potatoes)/(1 corn) = (0.6 potatoes)/(1 corn).
Which tool does the Federal Reserve use to increase the money supply?
Open market purchase of securities
Personal income tax rate increases
Personal income tax rate decreases
Open market sale of securities
Correct! An open market purchase of securities by the Federal Reserve increases the money
supply. Open market purchase of securities
Correct! An open market purchase of securities by the Federal Reserve increases the money
supply.
Which element is included in the calculation for government spending as a component of gross
domestic product (GDP)?
Medicare insurance
Unemployment benefits
New highway construction
, Social Security benefits New highway construction
Correct! Building a new highway is considered a good or service expenditure for the calculation
of GDP.
Nominal wages increase across the country. How does this change the short-run aggregate
supply (SRAS) curve?
The curve bows outward.
The curve shifts to the left.
The curve bows inward.
The curve shifts to the right. The curve shifts to the left.
Correct! An increase in the cost of labor will cause the curve to shift to the left since labor is a
key input for other products.
A new immigration policy has increased the number of skilled immigrants who can legally come
to the country, and this increases the economy's productivity.
How will the long-run aggregate supply (LRAS) curve respond to this situation?
Shifts to the right
Remains the same
Becomes horizontal
Shifts to the left Shifts to the right
Correct! Increase in productivity shifts the LRAS curve to the right.
A country's interest rates have fallen. How will this change affect the equilibrium?
The new equilibrium occurs at a lower price and lower GDP.
The new equilibrium occurs at a higher price and lower GDP.
