- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 4. Monetary Policy
- Subject 4. Interaction of Monetary and Fiscal Policy
CFA Practice Question
If fiscal policy is easy and monetary policy is tight, ______
A. the private sector will shrink and the public sector will expand.
B. the private sector will expand and the public sector will shrink.
C. both the private and public sector will expand.
Explanation: Interest rates will rise and have a negative impact on the private sector. Government spending will rise as a share of GDP.
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