- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 3. Fiscal Policy
- Subject 4. Fiscal Policy Implementation
CFA Practice Question
A change in fiscal policy that is triggered by the state of the economy is ______.
B. automatic fiscal policy
C. discretionary fiscal policy
A. automatic stabilizers
B. automatic fiscal policy
C. discretionary fiscal policy
Correct Answer: B
User Contributed Comments 3
| User | Comment |
|---|---|
| schweitzdm | What's an example of one? |
| tangyjab | Why not A? |
| Chidinmaiw | tangyjab: the question asked for the change in fiscal policy. An automatic stabilizer is the result of an economic expansion/ recession. For instance if the economy was in a expansion meaning more people have more income from their wages, this will also mean that the income taxes received will increase due to the increase in people's wages. This was not the result of a fiscal policy intervention. Hope that cleared things up for you. |