CFA Practice Question

CFA Practice Question

Which of the following is correct?
A. A government's policies of taxation and expenditure constitute its Monetary Policy.
B. The 'stagflation' of the 1970s in the US was a contradiction of the Phillips Curve tradeoff.
C. According to the Phillips Curve there is a tradeoff between inflation rate and budget deficit.
Explanation: The 1970s were marked by high inflation and high unemployment, a contradiction of the Phillips Curve tradeoff between inflation and unemployment. A government's policies of taxation and expenditure constitute its Fiscal Policy.

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