If the U.S. government's borrowing needs increase, in the bond market this would be seen as:

Question

Quizplus · Accepted Answer

An increase in the U.S. government's borrowing needs would mean that the government would need to issue more bonds to finance its spending. This would lead to a higher supply of bonds in the market, as the government attempts to meet this increased demand. Therefore, D, the bond supply curve shifting right, is the correct answer as it reflects the increase in the supply of bonds in the market to meet the increased borrowing needs of the government.

If the US Government's Borrowing Needs Increase, in the Bond Market This