If the government decreases income taxes by $500 billion and does not pursue a policy change,which of the following would require the private sector to adjust in order to finance the tax decrease?

Question

Quizplus · Accepted Answer

Issuing $500 billion in new Treasury bonds would require the private sector to purchase these bonds, effectively financing the tax decrease through increased government borrowing.

If the Government Decreases Income Taxes by $500 Billion and Does