Retiring government debt held by depositories causes:

Question

Quizplus · Accepted Answer

Retiring government debt held by depositories reduces the amount of Treasury securities held by banks, which in turn reduces the amount of excess reserves they hold. This leads to a decrease in the money supply, which can lead to a decrease in spending and employment. Additionally, retiring government debt can lead to a decrease in interest rates, as the government is no longer competing with private borrowers for funds.

Retiring Government Debt Held by Depositories Causes