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D 089 / D089 Pre - Assessment (Latest Update 2025 / 2026) Principles of Economics | Questions and Answers | 100% Correct | Grade A - WGU
Question:
What allows for the money creation process in the economy?
Answer:
Fractional reserve banking system
Question:
Which effect does an increase income have on the money demand curve?
Answer:
Shifts to the right
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Question:
A country is experiencing an inflationary gap.Which type of fiscal policy should the government undertake?
Answer:
Contractionary
Question:
A country is experiencing a recessionary gap.Which tpe of fiscal policy should the government undertake?
Answer:
Expansionary
Question:
What is a cause of structural deficits?
Answer:
political decisions
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Question:
Which situation reduces the effectiveness of using the Phillips curve as a policy menu?
Answer:
Stagflation
Question:
Canada reduces its tariffs by 25% on all manufacturing goods imported from the European Union.What is the long run effect of this action?
Answer:
It decreases the long run average cost as manufacturing firms face more competition
Question:
Which trade policy could reduce exports?
Answer:
Increase cost of production by raising taxes
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