- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 4. Monetary Policy
- Subject 3. Monetary Policy Objectives
CFA Practice Question
A tax cut reduces the amount of money that taxpayers owe the government and frees up money for personal spending. This can cause a ______.
B. supply shock
C. tax shock
A. demand shock
B. supply shock
C. tax shock
Correct Answer: A
This money is then used by taxpayers to consume certain products and services, which bids up their prices.
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