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

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 2 | Page -LR: unemployment rate returns to natural rate of unemploymentno trade off, Policymakers must choose to target just one aspect of the crisis since no fiscal policy solution addresses both 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. 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. 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 3 | Page 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? 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. 4 | Page 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 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 5 | Page 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. circular flow diagram a diagram that views the economy as consisting of households and firms interacting in a goods and services market and a factor market factors of production the resources available to the economy for the production of goods and services (Land(rent), Labor(wages), Capital(interest), and Entrepreneurship(normal profti))