The government can use a budget surplus to do all of the following except
A)Decrease taxes.
B)Increase income transfers.
C)Increase expenditures on goods and services.
D)Decrease the money supply.

Question

Quizplus · Accepted Answer

A budget surplus means that the government is collecting more revenue than it is spending, so it has some extra funds available. Decreasing taxes or increasing income transfers would involve giving back a portion of these funds to individuals. Increasing expenditures on goods and services would involve using these funds to spend on public projects. However, decreasing the money supply would involve the government taking action to remove funds from circulation and decrease economic activity, which is not a typical policy measure associated with budget surpluses.

The Government Can Use a Budget Surplus to Do All