Which of the following is most likely to increase a federal budget surplus?
A)A higher inflation rate and a higher unemployment rate.
B)A higher inflation rate and a lower unemployment rate.
C)A lower inflation rate and a higher unemployment rate.
D)A lower inflation rate and a lower unemployment rate.

Question

Quizplus · Accepted Answer

A higher inflation rate can increase nominal tax revenues, and a lower unemployment rate can lead to higher tax revenues and reduced government spending on unemployment benefits, both contributing to a budget surplus.

Which of the Following Is Most Likely to Increase a Federal