Company X's government has a fiscal surplus.

CIMA BA1 Question Answer

Company X's government has a fiscal surplus. However, this has led to less investment in Company X's economy and an increased rate of unemployment.

Which of the following best describes how a fiscal surplus might be achieved, and why it may be necessary for a government to achieve one?

When taxation exceeds public expenditure, and in order to limit inflation

When public expenditure exceeds taxation, and in order to increase inflation

When taxation and public expenditure are equal, and personal debt increases

When taxation and public expenditure are equal, and personal debt decreases

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