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Basic Question 10 of 15

A tax cut reduces the amount of money that taxpayers owe the government and frees up money for personal spending. This can cause a ______.

A. demand shock
B. supply shock
C. tax shock

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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz

Tamara Schultz

Learning Outcome Statements

describe qualities of effective central banks; contrast their use of inflation, interest rate, and exchange rate targeting in expansionary or contractionary monetary policy; and describe the limitations of monetary policy

CFA® 2025 Level I Curriculum, Volume 1, Module 4.