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WGU D089 FINAL EXAM / WGU D089 – PRINCIPLES OF
ECONOMICS FINAL EXAM QUESTIONS & CORRECT
ANSWERS | VERIFIED ANSWERS | NEWEST 2026/2027
ACTUAL 170 Q & A | ALREADY GRADED A+ | 100% PASS |
WGU
What is the relationship between the production possibilities frontier
(PPF) and production and consumption in countries that engage in free
trade?
All countries should produce on their PPF and consume at a point
above their PPF. If countries specialize in the goods that they have
comparative advantages in and trade for those goods it does not, all
countries can benefit through trade. The benefit is shown in the
model as being able to consume at a higher level than it could
produce on its own.
What is a benefit of a government being able to run a deficit? economic
stabilization
The government can strategically use deficits to stabilize economies.
Which set of factors is the primary reason that the Phillips curve shifts?
-SR: trade-off between inflation and unemployment
-LR: unemployment rate returns to natural rate of unemployment-
no trade off, Policymakers must choose to target just one aspect of
the crisis since no fiscal policy solution addresses both
,2 | Page
Supply shocks and inflation expectations cause the Phillips curve to
shift since prices or behavior are adjusted. These adjustments make
the curve move in ways that contradict traditional curve
movements.
How are the aggregate demand (AD) curve and the Phillips curve
related?
GDP and unemployment are negatively concerned with the
influence of price changes on macroeconomic performance.
-The positive relationship between output and employment means
that if AD shows a negative relationship between GDP and the price
level, the short-run Phillips curve will show a negative relationship
between inflation and unemployment.
This is not a form; we suggest that you use the browse mode and read
all parts of the question carefully.
Technological advancements have made weather predictions more
accurate and improved shipping efficiency. How does this change
impact international trade?
International trade will increase because shipping costs have
decreased.
What does it mean to have a positive balance of trade?
,3 | Page
A country exports more than it imports.
What is the shape of the production possibility frontier (PPF) when
opportunity costs are constant?
Linear and downward sloping
-indicate constant opportunity cost along with showing scarcity.
The average price of eggs increases from $1.10 to $1.30. In response,
the quantity supplied increases from 220 to 260 eggs. The elasticity of
supply is equal to 1. Which term describes the price elasticity of this
supply?
unit elastic
What does the Phillips curve show economists and government
policymakers?
The inverse relationship of inflation and unemployment in the short
run
Which statement describes how higher input costs affect equilibrium in
the market for a good?
They reduce supply, causing prices to rise.
, 4 | Page
capital
a factor of production that is made to produce other things (tools,
equipment, etc.)
What are the governmental objectives of attempting to regulate the level
of aggregate demand in the economy through its fiscal policy actions?
Price stability, full employment, and economic growth
Two islands have begun trading goods. One island is larger than the
other and has a vast forest of hardwood trees. The other island has few
forests, but an abundance of iron deposits.
Why should these two islands engage in trade?
Differences in factor endowments
Why does a change in government purchases have more of an impact on
aggregate demand than a similar change in tax levels or transfer
payments?
Any change in government purchases goes directly into the economy
and is magnified by the multiplier effect.
- Government purchases lead to more money going directly into the
economy. In turn, this is spent by businesses to buy more equipment
and materials or pay more workers.
WGU D089 FINAL EXAM / WGU D089 – PRINCIPLES OF
ECONOMICS FINAL EXAM QUESTIONS & CORRECT
ANSWERS | VERIFIED ANSWERS | NEWEST 2026/2027
ACTUAL 170 Q & A | ALREADY GRADED A+ | 100% PASS |
WGU
What is the relationship between the production possibilities frontier
(PPF) and production and consumption in countries that engage in free
trade?
All countries should produce on their PPF and consume at a point
above their PPF. If countries specialize in the goods that they have
comparative advantages in and trade for those goods it does not, all
countries can benefit through trade. The benefit is shown in the
model as being able to consume at a higher level than it could
produce on its own.
What is a benefit of a government being able to run a deficit? economic
stabilization
The government can strategically use deficits to stabilize economies.
Which set of factors is the primary reason that the Phillips curve shifts?
-SR: trade-off between inflation and unemployment
-LR: unemployment rate returns to natural rate of unemployment-
no trade off, Policymakers must choose to target just one aspect of
the crisis since no fiscal policy solution addresses both
,2 | Page
Supply shocks and inflation expectations cause the Phillips curve to
shift since prices or behavior are adjusted. These adjustments make
the curve move in ways that contradict traditional curve
movements.
How are the aggregate demand (AD) curve and the Phillips curve
related?
GDP and unemployment are negatively concerned with the
influence of price changes on macroeconomic performance.
-The positive relationship between output and employment means
that if AD shows a negative relationship between GDP and the price
level, the short-run Phillips curve will show a negative relationship
between inflation and unemployment.
This is not a form; we suggest that you use the browse mode and read
all parts of the question carefully.
Technological advancements have made weather predictions more
accurate and improved shipping efficiency. How does this change
impact international trade?
International trade will increase because shipping costs have
decreased.
What does it mean to have a positive balance of trade?
,3 | Page
A country exports more than it imports.
What is the shape of the production possibility frontier (PPF) when
opportunity costs are constant?
Linear and downward sloping
-indicate constant opportunity cost along with showing scarcity.
The average price of eggs increases from $1.10 to $1.30. In response,
the quantity supplied increases from 220 to 260 eggs. The elasticity of
supply is equal to 1. Which term describes the price elasticity of this
supply?
unit elastic
What does the Phillips curve show economists and government
policymakers?
The inverse relationship of inflation and unemployment in the short
run
Which statement describes how higher input costs affect equilibrium in
the market for a good?
They reduce supply, causing prices to rise.
, 4 | Page
capital
a factor of production that is made to produce other things (tools,
equipment, etc.)
What are the governmental objectives of attempting to regulate the level
of aggregate demand in the economy through its fiscal policy actions?
Price stability, full employment, and economic growth
Two islands have begun trading goods. One island is larger than the
other and has a vast forest of hardwood trees. The other island has few
forests, but an abundance of iron deposits.
Why should these two islands engage in trade?
Differences in factor endowments
Why does a change in government purchases have more of an impact on
aggregate demand than a similar change in tax levels or transfer
payments?
Any change in government purchases goes directly into the economy
and is magnified by the multiplier effect.
- Government purchases lead to more money going directly into the
economy. In turn, this is spent by businesses to buy more equipment
and materials or pay more workers.
