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WGU C211 OA GLOBAL ECONOMICS EXAM
QUESTIONS AND CORRECT DETAILED
ANSWERS WITH RATIONALES ALREADY
GRADED A+
what will happen to the equilibrium in the market for a good if demand and supply increase simultaneously?equilibrium quantity will always increase equilibrium price will always decrease equilibrium quantity will always decrease equilibrium price will always increase equilibrium quantity will always increase what concept measures how much the quality demanded of one good responds to change in price of another good?income elasticity of demand compared elasticity of demand revenue elasticity of demand cross-price elasticity of demand cross-price elasticity of demand what concept measures how much the quantity supplied responds to change in price?cross-price elasticity of demand value elasticity of supply price elasticity of supply income elasticity of demand price elasticity of supply 1 / 4
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2 What is the interest rate of a loan borrowed by banks from the fed?prime rate bank rate discount rate federal rate bank rate which target rate would the fed lower in order to stimulate the economy and avoid a recession the exchange rate the foreign exchange rate the monetary growth rate the federal funds rate the federal funds rate is which action would the fed rate take to expand the money supply and lower the equilibrium interest rate?conduct open market sales of government bonds increase government spending purchase government bonds of the open market lower income tax rate purchase government bonds on the open market what happens when the price of a good increases holding everything else constant producer surplus decreases consumer surplus decreases producer and consumer surplus are unchanged consumer surplus increases 2 / 4
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3 consumer surplus decreases which activity will result in an increase in GDP other things being equal?a law passes making the sale of recreational marijuana legal a law passes making the sale of medical marijuana illegal consumption of illegal drugs increases consumption of prescription drugs decreases a law passes making the sale of recreational marijuana legal which two types of investment are included in GDP (2) spending on stocks and bonds spending on education spending on new residential construction spending on build new factories spending on consumer durable goods spending on new residential construction spending to build new factories a nation begins applying tariff on bananas which is imported price will increase price will remain the same the price will decrease the price will begin to match the global market price price will increase a nation has implemented a tariff on rare minerals How ill this affect the price domestic consumers pay?it will prevent the price consumers pay from fluctuating it will cause the price consumers pay to go down 3 / 4
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4 it will cause the price consumers pay to go up it will cause the price consumers pay to equal world price it will cause the price consumers pay to go up what concept measures how many quantity supplied responds to change in price?value elasticity of supply cross price elasticity of demand income elasticity of demand price elasticity of supply price elasticity of supply Which type of market operation does the fed use to increase the money supply when it buys bonds from the public in the nation's bond market?close market operations money market operations value market operations open market operations open market operations If the government increases its purchases by $10 billion the aggregate demand for goods and services could rise by mor than $10 billion what does this illustrate?exchange rate effect multiplier effect automatic stabilizer effect crowding out effect multiplier effect
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