<p>This is a <span style="color:#8e44ad;"><strong>Vocabulary in Context</strong></span> question as indicated by the highlighting of the word in question (exceed) and the phrase "most nearly means". </p>
<p>If we look at the passage, we can see the claim that the tax amount "should be equal to" the harm caused. The next sentence talks about the taxes being "more than" the costs, and to continue that idea, "exceed" should also be something that conveys the idea of "more than" or "not equal to".</p>
<p><span style="color:#27ae60;"><span style="font-size:20px;">The Right Answer</span></span></p>
<p><span style="color:#27ae60;">A:</span> Based on our reasoning above, "outstrip" would be the best fit. This conveys the idea of the "costs" being "more than" the benefits gained from them.</p>
<p><span style="color:#e74c3c;"><span style="font-size:20px;">The Wrong Answers</span></span></p>
<ul>
<li><span style="color:#e74c3c;">B:</span> This choice has <strong>no evidence</strong>. There's nothing to suggest that excessive taxes will bring benefits.</li>
<li><span style="color:#e74c3c;">C: </span>This choice has <strong>no evidence</strong>. There's nothing suggesting that the excessive taxes will determine the limits/boundaries of the benefits.</li>
<li><span style="color:#e74c3c;">D:</span> This choice has <strong>no evidence</strong>. There's nothing suggesting that the costs will "counteract" the benefits.</li>
<li><span style="color:#e74c3c;">E:</span> This choice has n<strong>o evidence</strong>. There's nothing suggesting that the costs would "replace" the benefits entirely.</li>
</ul>