If net taxes exceed government purchases,
A)the price level will rise
B)the money supply must fall
C)the aggregate demand curve will shift rightward
D)the short-run aggregate supply curve will leftward
E)there will be a federal budget surplus

Question

Quizplus · Accepted Answer

If net taxes (taxes minus transfers) exceed government purchases, it means the government is collecting more revenue in taxes than it is spending on goods and services. This results in a federal budget surplus.

If Net Taxes Exceed Government Purchases