WGU C211 OA Questions & Answers 2026 | High-Yield Review |
Graded A+
1. What is the effect on the money supply when the reserve ratio is decreased?
The money supply remains unchanged.
The money supply increases.
The money supply decreases.
The money supply fluctuates.
2. Price elasticity of demand is calculated as
the proportionate change in price divided by the proportionate
change in quantity demanded.
the absolute change in price divided by the absolute change in
quantity demanded.
the absolute change in quantity demanded divided by the absolute
change in price.
the proportionate change in quantity demanded divided by the
proportionate change in price.
3. In a perfectly competitive market, what happens to equilibrium quantity when
market demand increases?
Equilibrium quantity decreases
Equilibrium quantity increases
Equilibrium quantity remains the same
Equilibrium quantity fluctuates
,4. If a government raises the discount rate to combat inflation, what might be a
potential consequence for foreign direct investment (FDI) in the country?
FDI will only be affected in specific sectors.
FDI may decrease as investors seek better returns elsewhere.
FDI will remain unchanged regardless of the discount rate.
FDI will increase due to higher expected returns.
5. Describe how a mixed economy functions in relation to both market and
command economies.
A mixed economy is characterized by complete privatization of all
industries.
A mixed economy functions by allowing both private enterprise and
government intervention in economic activities.
A mixed economy eliminates any form of market competition.
A mixed economy relies solely on government control of all
resources.
6. Gross Domestic Product (GDP) measures which of the following?
measures national input
measures national output
measures national trade
measures national resources
7. Coke and Pepsi are an example of:
substitutes.
complements.
, inferior goods.
unrelated goods.
8. An increase in the money supply will
Raise interest rates and increase aggregate demand.
Raise interest rates and decrease aggregate demand.
Reduce interest rates and decrease aggregate demand.
Reduce interest rates and increase aggregate demand.
9. Describe the characteristics of inelastic demand and how it differs from
elastic demand.
Inelastic demand is characterized by a constant quantity demanded
regardless of price changes, while elastic demand varies significantly.
Inelastic demand means that quantity demanded increases
significantly with price increases, while elastic demand remains
constant.
Inelastic demand occurs only in monopolistic markets, while elastic
demand is found in competitive markets.
Inelastic demand refers to a situation where the quantity demanded
changes less than proportionately to a change in price, while elastic
demand indicates a greater change in quantity demanded with price
changes.
10. Describe how specialization under free trade can lead to economic gains for
a nation.
Specialization results in a decrease in the variety of goods available.
Specialization increases the cost of production for all goods.
, Specialization allows a nation to focus on producing goods and
services where it has a comparative advantage, leading to greater
overall efficiency and output.
Specialization limits a nation's ability to trade with others.
11. Oligopolies can behave like monopolies when
Oligopolies cannot ever behave like monopolies
A firm uses the government to restrict other competition
The firms collude with each other
The firms compete with each other
12. What is the term used to describe a market structure with many firms and
differentiated products?
Perfect competition
Monopolistic competition
Monopoly
Oligopoly
13. What is the primary purpose of open market operations in economic policy?
To manage foreign exchange rates.
To influence trade balances.
To regulate the money supply.
To control inflation rates.
14. Describe the relationship between market demand and equilibrium price in a
perfectly competitive market.
Graded A+
1. What is the effect on the money supply when the reserve ratio is decreased?
The money supply remains unchanged.
The money supply increases.
The money supply decreases.
The money supply fluctuates.
2. Price elasticity of demand is calculated as
the proportionate change in price divided by the proportionate
change in quantity demanded.
the absolute change in price divided by the absolute change in
quantity demanded.
the absolute change in quantity demanded divided by the absolute
change in price.
the proportionate change in quantity demanded divided by the
proportionate change in price.
3. In a perfectly competitive market, what happens to equilibrium quantity when
market demand increases?
Equilibrium quantity decreases
Equilibrium quantity increases
Equilibrium quantity remains the same
Equilibrium quantity fluctuates
,4. If a government raises the discount rate to combat inflation, what might be a
potential consequence for foreign direct investment (FDI) in the country?
FDI will only be affected in specific sectors.
FDI may decrease as investors seek better returns elsewhere.
FDI will remain unchanged regardless of the discount rate.
FDI will increase due to higher expected returns.
5. Describe how a mixed economy functions in relation to both market and
command economies.
A mixed economy is characterized by complete privatization of all
industries.
A mixed economy functions by allowing both private enterprise and
government intervention in economic activities.
A mixed economy eliminates any form of market competition.
A mixed economy relies solely on government control of all
resources.
6. Gross Domestic Product (GDP) measures which of the following?
measures national input
measures national output
measures national trade
measures national resources
7. Coke and Pepsi are an example of:
substitutes.
complements.
, inferior goods.
unrelated goods.
8. An increase in the money supply will
Raise interest rates and increase aggregate demand.
Raise interest rates and decrease aggregate demand.
Reduce interest rates and decrease aggregate demand.
Reduce interest rates and increase aggregate demand.
9. Describe the characteristics of inelastic demand and how it differs from
elastic demand.
Inelastic demand is characterized by a constant quantity demanded
regardless of price changes, while elastic demand varies significantly.
Inelastic demand means that quantity demanded increases
significantly with price increases, while elastic demand remains
constant.
Inelastic demand occurs only in monopolistic markets, while elastic
demand is found in competitive markets.
Inelastic demand refers to a situation where the quantity demanded
changes less than proportionately to a change in price, while elastic
demand indicates a greater change in quantity demanded with price
changes.
10. Describe how specialization under free trade can lead to economic gains for
a nation.
Specialization results in a decrease in the variety of goods available.
Specialization increases the cost of production for all goods.
, Specialization allows a nation to focus on producing goods and
services where it has a comparative advantage, leading to greater
overall efficiency and output.
Specialization limits a nation's ability to trade with others.
11. Oligopolies can behave like monopolies when
Oligopolies cannot ever behave like monopolies
A firm uses the government to restrict other competition
The firms collude with each other
The firms compete with each other
12. What is the term used to describe a market structure with many firms and
differentiated products?
Perfect competition
Monopolistic competition
Monopoly
Oligopoly
13. What is the primary purpose of open market operations in economic policy?
To manage foreign exchange rates.
To influence trade balances.
To regulate the money supply.
To control inflation rates.
14. Describe the relationship between market demand and equilibrium price in a
perfectly competitive market.
