If a government budgets for a surplus and there is an unexpected increase in the level of economic activity, which of the following is likely to occur? Options: A . &nbspThere will be an increase in tax revenues and an increase in the budget surplus B . &nbspThere will be a decrease in tax revenues and a decrease in the budget surplus C . &nbspThere will be an increase in tax revenues and a decrease in the budget D . &nbspThere will be a decrease in tax revenues and an increase in the budget surplus

If a government budgets for a surplus and there is an unexpected increase in the

Question

If a government budgets for a surplus and there is an unexpected increase in the level of economic activity, which of the following is likely to occur?

Options:

A . There will be an increase in tax revenues and an increase in the budget surplus

B . There will be a decrease in tax revenues and a decrease in the budget surplus

C . There will be an increase in tax revenues and a decrease in the budget

D . There will be a decrease in tax revenues and an increase in the budget surplus

Answer: Option A
Answer: (a)

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