WGU C211 - COMPETENCY 4: QUESTIONS WITH
CORRECT ANSWERS 2026
Federal D Reserve's D monetary D control D - D correct D answer-FOMC D -
Federal D Open D Market D Committee D and D the D open D market D operation, D the D purchase D and
D sale D of D U.S. D g Dovernment D bonds.
Open D market D operations D - D correct D answer-The D purchase D and D sale D of D U.S. D government
D bonds.
When D the D Fed D buys D bonds, D what D impact D does D this D have D on D the D money D supply
D and D aggregate D dema Dnd? D - D correct D answer-
After D the D purchase, D these D dollars D are D in D the D hands D of D the D public.
D Thus, D an D open- Dmarket D purchase D of D bonds D by D the D Fed D increases D the
D money D supply.
When D the D Fed D sells D bonds, D what D impact D does D this D have D on D the D money D supply
D and D aggregate D dema Dnd? D - D correct D answer-
After D the D sale, D the D dollars D the D Fed D receives D for D the D bonds D are D out D of D the D hands
D of D the D public. D Thus
, D an D open-market D sale D of D bonds D by D the D Fed D decreases D the D money D supply.
Discount D rate D - D correct D answer-
The D interest D rate D banks D pay D when D borrowing D from D the D Federal D Reserve.
When D the D Fed D reduces D the D discount D rate, D what D impact D will D this D have D on D the
D money D supply D and D the Daggregate D demand? D - D correct D answer-
A D lower D discount D rate D encourages D banks D to D borrow D from D the D Fed, D increasing D the
D quantity D of D reserv Des D and D the D money D supply.
When D the D Fed D increases D the D discount D rate, D what D impact D will D this D have D on D the
D money D supply D and D th De D aggregate D demand? D - D correct D answer-
Higher D discount D rate D discourages D banks D from D borrowing D reserves D from D the D Fed,
, D reducing D the D quanti Dty D of D reserves D in D the D banking D system, D which D in D turn
D reduces D the D money D supply.
Reserve D ratio D - D correct D answer-The D fraction D of D total D deposits D that D a D bank D holds D as
D reserves.
CORRECT ANSWERS 2026
Federal D Reserve's D monetary D control D - D correct D answer-FOMC D -
Federal D Open D Market D Committee D and D the D open D market D operation, D the D purchase D and
D sale D of D U.S. D g Dovernment D bonds.
Open D market D operations D - D correct D answer-The D purchase D and D sale D of D U.S. D government
D bonds.
When D the D Fed D buys D bonds, D what D impact D does D this D have D on D the D money D supply
D and D aggregate D dema Dnd? D - D correct D answer-
After D the D purchase, D these D dollars D are D in D the D hands D of D the D public.
D Thus, D an D open- Dmarket D purchase D of D bonds D by D the D Fed D increases D the
D money D supply.
When D the D Fed D sells D bonds, D what D impact D does D this D have D on D the D money D supply
D and D aggregate D dema Dnd? D - D correct D answer-
After D the D sale, D the D dollars D the D Fed D receives D for D the D bonds D are D out D of D the D hands
D of D the D public. D Thus
, D an D open-market D sale D of D bonds D by D the D Fed D decreases D the D money D supply.
Discount D rate D - D correct D answer-
The D interest D rate D banks D pay D when D borrowing D from D the D Federal D Reserve.
When D the D Fed D reduces D the D discount D rate, D what D impact D will D this D have D on D the
D money D supply D and D the Daggregate D demand? D - D correct D answer-
A D lower D discount D rate D encourages D banks D to D borrow D from D the D Fed, D increasing D the
D quantity D of D reserv Des D and D the D money D supply.
When D the D Fed D increases D the D discount D rate, D what D impact D will D this D have D on D the
D money D supply D and D th De D aggregate D demand? D - D correct D answer-
Higher D discount D rate D discourages D banks D from D borrowing D reserves D from D the D Fed,
, D reducing D the D quanti Dty D of D reserves D in D the D banking D system, D which D in D turn
D reduces D the D money D supply.
Reserve D ratio D - D correct D answer-The D fraction D of D total D deposits D that D a D bank D holds D as
D reserves.
