WGU C211 EXAMINATION TEST COMPLETE
STUDY GUIDE WITH SOLVED Q AND A
2026
◉ Which of the following is not a determinant of the price elasticity
of demand for a good?
a. The time horizon
b. The definition of the market for the good
c. The steepness or flatness of the supply curve for the good
d. The availability of substitutes for the good
Answer: The steepness or flatness of the supply curve for the good
◉ If the price of walnuts rises, many people would switch from
consuming walnuts to consuming pecans. But if the price of salt
rises, people would have difficulty purchasing something to use in
its place. These examples illustrate the importance of
a. a necessity versus a luxury in determining the price elasticity of
demand.
b. the definition of a market in determining the price elasticity of
demand.
c. the availability of close substitutes in determining the price
elasticity of demand.
d. the time horizon in determining the price elasticity of demand.
,Answer: the availability of close substitutes in determining the price
elasticity of demand.
◉ When the Fed decreases the discount rate, banks will
a. borrow less from the Fed and lend less to the public. The money
supply decreases.
b. borrow more from the Fed and lend more to the public. The
money supply increases.
c. borrow less from the Fed and lend more to the public. The money
supply increases.
d. borrow more from the Fed and lend less to the public. The money
supply decreases.
Answer: borrow more from the Fed and lend more to the public. The
money supply increases.
◉ Other things the same, if reserve requirements are increased, the
reserve ratio
a. decreases, the money multiplier decreases, and the money supply
increases.
b. increases, the money multiplier increases, and the money supply
increases.
c. increases, the money multiplier decreases, and the money supply
decreases.
d. decreases, the money multiplier increases, and the money supply
increases.
, Answer: increases, the money multiplier decreases, and the money
supply decreases.
◉ Which of the following policies can the Fed follow to increase the
money supply?
a.
Reduce the quantity of funds available through the Term Auction
Facility
b.
Increase reserve requirements for banks
c.
Sell government bonds
d.
Reduce the interest rate on reserves
Answer: Reduce the interest rate on reserves
◉ Which of the following is NOT an example of monetary policy?
a. The Federal Reserve reduces the reserve requirement.
b. The Federal Open Market Committee decides to buy bonds.
c. The Federal Open Market Committee decides to sell bonds.
d. The Federal Reserve facilitates bank transactions by clearing
checks.
STUDY GUIDE WITH SOLVED Q AND A
2026
◉ Which of the following is not a determinant of the price elasticity
of demand for a good?
a. The time horizon
b. The definition of the market for the good
c. The steepness or flatness of the supply curve for the good
d. The availability of substitutes for the good
Answer: The steepness or flatness of the supply curve for the good
◉ If the price of walnuts rises, many people would switch from
consuming walnuts to consuming pecans. But if the price of salt
rises, people would have difficulty purchasing something to use in
its place. These examples illustrate the importance of
a. a necessity versus a luxury in determining the price elasticity of
demand.
b. the definition of a market in determining the price elasticity of
demand.
c. the availability of close substitutes in determining the price
elasticity of demand.
d. the time horizon in determining the price elasticity of demand.
,Answer: the availability of close substitutes in determining the price
elasticity of demand.
◉ When the Fed decreases the discount rate, banks will
a. borrow less from the Fed and lend less to the public. The money
supply decreases.
b. borrow more from the Fed and lend more to the public. The
money supply increases.
c. borrow less from the Fed and lend more to the public. The money
supply increases.
d. borrow more from the Fed and lend less to the public. The money
supply decreases.
Answer: borrow more from the Fed and lend more to the public. The
money supply increases.
◉ Other things the same, if reserve requirements are increased, the
reserve ratio
a. decreases, the money multiplier decreases, and the money supply
increases.
b. increases, the money multiplier increases, and the money supply
increases.
c. increases, the money multiplier decreases, and the money supply
decreases.
d. decreases, the money multiplier increases, and the money supply
increases.
, Answer: increases, the money multiplier decreases, and the money
supply decreases.
◉ Which of the following policies can the Fed follow to increase the
money supply?
a.
Reduce the quantity of funds available through the Term Auction
Facility
b.
Increase reserve requirements for banks
c.
Sell government bonds
d.
Reduce the interest rate on reserves
Answer: Reduce the interest rate on reserves
◉ Which of the following is NOT an example of monetary policy?
a. The Federal Reserve reduces the reserve requirement.
b. The Federal Open Market Committee decides to buy bonds.
c. The Federal Open Market Committee decides to sell bonds.
d. The Federal Reserve facilitates bank transactions by clearing
checks.
