Full Employment Boosts Budget Surplus via Higher Revenues and Lower Spending

Steps:

• Define budget surplus as government revenue exceeding expenditure.
• Identify how macroeconomic aims affect revenue (e.g., taxes) and spending (e.g., benefits).
• Evaluate each option's impact on this balance.
• Select the aim that maximizes revenue gains and spending cuts.

Why A is correct:

• Full employment increases income and corporate tax revenues while reducing unemployment benefit spending, directly widening the surplus per the fiscal balance formula (Revenue - Expenditure > 0).

Why the others are wrong:

• B: Low redistribution implies reduced welfare spending but also lower progressive taxes, netting neutral or deficit impact.
• C: Low inflation stabilizes prices but doesn't inherently raise revenues or cut costs enough for surplus growth.
• D: Balance of payments stability aids trade but has indirect, minimal effects on domestic fiscal balances.

Final answer: A