- A
AWS Cost Explorer
Why wrong: Cost Explorer is used to visualize, explore, and analyze your AWS costs and usage over time. It does not provide the ability to set budgets or automatically take actions when costs exceed a threshold.
- B
AWS Budgets
AWS Budgets enables you to set custom budgets for costs or usage and configure budget actions that automatically enforce policies or send notifications when the budget is exceeded. This directly meets the requirement for automated application of a restrictive IAM policy and email alerts.
- C
AWS Cost Anomaly Detection
Why wrong: Cost Anomaly Detection uses machine learning to identify anomalous spending patterns and provides root cause analysis. It does not support setting fixed budget thresholds or triggering automated actions like applying IAM policies.
- D
AWS Trusted Advisor
Why wrong: Trusted Advisor inspects your AWS environment and provides recommendations to optimize costs, improve performance, and close security gaps. It does not allow you to set budgets or automatically enforce cost governance actions.
CLF-C02 Billing, Pricing, and Support Practice Question
This CLF-C02 practice question tests your understanding of billing, pricing, and support. Match the stated requirement to the specific cloud service, access model, or configuration option — many options are valid in isolation but not for this scenario. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A company uses multiple AWS accounts and wants to enforce cost governance. The company needs to set a monthly cost budget of $10,000 for each account. When an account's actual or forecasted costs exceed this budget, the company wants to automatically apply a restrictive IAM policy that prevents the creation of new resources in that account. Additionally, the company wants to receive an email notification when the budget is exceeded. Which AWS feature should the company use to meet these requirements?
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
AWS Budgets
AWS Budgets allows you to set custom cost and usage budgets, and when actual or forecasted costs exceed the budget threshold, it can trigger actions such as applying an IAM policy to restrict resource creation and sending SNS-based email notifications. This directly meets the requirement for automated enforcement and alerting per account.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
AWS Cost Explorer
Why it's wrong here
Cost Explorer is used to visualize, explore, and analyze your AWS costs and usage over time. It does not provide the ability to set budgets or automatically take actions when costs exceed a threshold.
- ✓
AWS Budgets
Why this is correct
AWS Budgets enables you to set custom budgets for costs or usage and configure budget actions that automatically enforce policies or send notifications when the budget is exceeded. This directly meets the requirement for automated application of a restrictive IAM policy and email alerts.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
AWS Cost Anomaly Detection
Why it's wrong here
Cost Anomaly Detection uses machine learning to identify anomalous spending patterns and provides root cause analysis. It does not support setting fixed budget thresholds or triggering automated actions like applying IAM policies.
- ✗
AWS Trusted Advisor
Why it's wrong here
Trusted Advisor inspects your AWS environment and provides recommendations to optimize costs, improve performance, and close security gaps. It does not allow you to set budgets or automatically enforce cost governance actions.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates may confuse AWS Cost Explorer's reporting capabilities with the automated enforcement and notification features that only AWS Budgets provides.
Detailed technical explanation
How to think about this question
AWS Budgets actions use AWS Identity and Access Management (IAM) to define a custom policy that is applied to the root user or a specific IAM role when the budget threshold is breached. The action is executed via AWS Budgets' integration with AWS Systems Manager Automation or directly through an IAM policy ARN, and notifications are sent through Amazon Simple Notification Service (SNS) topics. A subtle behavior is that the IAM policy action is applied at the account level, so it affects all users and roles in that account unless explicitly excluded.
KKey Concepts to Remember
- Read the scenario before looking for a memorised answer.
- Find the constraint that changes the correct option.
- Eliminate answers that are true in general but not in this case.
TExam Day Tips
- Watch for words such as best, first, most likely and least administrative effort.
- Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A startup's cloud architect reviews their monthly bill and notices costs are higher than expected for a long-running batch job. Switching from on-demand instances to Reserved Instances — or using Spot/Preemptible VMs — can reduce compute costs by up to 72 %. Questions like this test whether you understand the tradeoffs between commitment, flexibility, and cost across cloud pricing models.
What to study next
Got this wrong? Here's your next step.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
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FAQ
Questions learners often ask
What does this CLF-C02 question test?
Billing, Pricing, and Support — This question tests Billing, Pricing, and Support — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: AWS Budgets — AWS Budgets allows you to set custom cost and usage budgets, and when actual or forecasted costs exceed the budget threshold, it can trigger actions such as applying an IAM policy to restrict resource creation and sending SNS-based email notifications. This directly meets the requirement for automated enforcement and alerting per account.
What should I do if I get this CLF-C02 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Last reviewed: Jun 11, 2026
This CLF-C02 practice question is part of Courseiva's free Amazon Web Services certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the CLF-C02 exam.
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