WGU C211 OA EXAM ACTUAL EXAM 350 QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (100% VERIFIED ANSWERS) |AGRADE

WGU C211 OA EXAM 2023-2024 ACTUAL EXAM

350 QUESTIONS AND CORRECT DETAILED

ANSWERS WITH RATIONALES (100% VERIFIED

ANSWERS) |AGRADE

What will happen to equilibrium quantity and price if both demand and

supply decrease? - ANSWER- Quantity will decrease but price can

either increase or decrease

What happens to demand quantity for normal goods as percentage

change in income increases? - ANSWER- Demand increases

What do the positive or negative numbers of cross-price elasticity of

demand represent? - ANSWER- Substitutes or complements

What is one way the Federal Reserve influences the reserve ratio? -

ANSWER- By altering reserve requirements

Which fiscal policy would be most effective at raising consumer

spending and expanding aggregate demand? - ANSWER- Enacting a

permanent INCOME TAX CUT

What is the effect of an increase in the money supply in the short run? -

ANSWER- Interest rates decrease and aggregate demand for goods and

services increase

How is consumer surplus represented on a graph? - ANSWER- area

below the demand curve and above the price

Define producer surplus? - ANSWER- The amount the seller is PAID

minus the COST of PRODUCTION (OR) The area below the price and

above the supply curve on a graph

A painter spends $200 on paint. He then bills the homeowner $1,000 to

cover his time and his expenses.

What is the amount of these transactions that is added to gross domestic

product (GDP)? - ANSWER- $1,000

A U.S. state purchases a fleet of new highway patrol vehicles

manufactured in Japan.

How are the components of U.S. gross domestic product (GDP)

affected? - ANSWER- 1) Net exports decrease and

2) Government expenditures increase

A nation ends a tariff on bananas, which is an imported product.

What will be the effect on banana prices within that nation? -

ANSWER- The price will MATCH the global market price

What effect does implementing a new tariff have on the government that

implements it? - ANSWER- Tax revenue INCREASES

Why do nations trade? - ANSWER- Firms in one nation generate

valuable, unique, and hard to imitate exports that firms in other nations

find it beneficial to import

Gross National Product (GNP) - ANSWER- The total value of goods

and services, including income received from abroad, produced by the

residents of a country within a specific time period, usually one year

Bretton Woods System (1944) - ANSWER- A system in which all

currencies were pegged at a fixed rate to the US dollar

Spot transactions - ANSWER- The classic single-shot exchange of one

currency for another

If elasticity equals 1 or (10/10 = 1) - ANSWER- Demand is UNIT

ELASTIC

What is the key difference between a competitive firm and a monopoly?

- ANSWER- The monopoly has an ability to influence the price of its

output

Griffen Good - ANSWER- A good for which an increase in the price

raises the quantity demanded

If elasticity equals 0 or (is a vertical line) - ANSWER- Demand is

perfectly inelastic

If marginal revenue is greater than marginal cost, the firm should do

what to its output? - ANSWER- Increase it

If marginal cost is greater than marginal revenue, the firm should do

what to its output? - ANSWER- Decrease the target output

Four ways policy makers can respond to monopolies: - ANSWER- 1)

Make monopolized industries more competitive

2) Regulating the behavior of the monopolies

3) Turning some private monopolies into public enterprises

4) Do nothing

Sherman Antitrust Act (1890) - ANSWER- First act passed by congress

to reduce the market power of the large and powerful trusts that were

dominating the economy at the time

Clayton Antitrust Act (1914) - ANSWER- Strengthened the

governments powers and authorized private lawsuits