WRED is Weighted RED, which is used for congestion avoidance. It will drop packets in order to trigger hosts sending data to detect the loss through TCP, and adjust how much they are sending. This is done to utilize the interface more efficiently and to not have massive packet loss on the interface so that all senders adjust simultaneously and cause TCP synchronization where all senders are following the same pattern in a rinse and repeat fashion.
I'm not a big fan of this question because A is an acceptable answer to me. With traffic shaping, it can only be performed outbound, while policing can be performed both inbound and outbound. To set the rate to 2 Gbit/s, the SP could shape outbound on PE interface to cust and outbound on CE interface to PE. It may be more common for SP to do policing but I have seen both.
So WRED is not an acceptable answer because it does not shape or police traffic. It manages the queue of packets, so called congestion avoidance.
This link, while old, is a good introduction to the different QoS topics:
A service provider is designing control policies at the customer edge of the network, in order to prevent usage that exceeds the contracted terms. A new client that is contracted for only 2Gbps is connecting to the service provider edge with a 10 Gbps interface. Which two QoS strategies meet the design goal? (Choose two.)
A.On the service provider edge, enable traffic shaping on the customer port.
B.On the service provider edge, enable policing on the customer port.
C.On the service provider edge, enable WRED on the customer port.
D. On the customer edge device, enable policing on the interface that is connected to the service provider.
E. On the customer edge device, enable traffic shaping on the interface that is connected to the service provider.
F. On the customer edge, enable WRED on the interface that is connected to the service provide
Ans: B, E
First you need to police on ISP edge toward the customer (option B)
on customer side you can shape the traffic in order send your data within the CIR so (option E)
option F is also seems right but in case of congestion as Daniel mentioned.
Hope this helped.