Due to drastic cuts in federal spending and strong economic growth it now appears that the federal government will experience a $10 billion budget surplus during the current fiscal year. If the Treasury plans to retain $2 billion of this surplus in its cash account at the Federal Reserve and to use the balance to retire $5 billion in government securities held by depository institutions and $3 billion held by the general public, use T accounts to show the effects of this debt retirement operation.

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The Answer of Due to drastic cuts in federal spending and strong economic growth it now appears that the federal government will experience a $10 billion budget surplus during the current fiscal year. If the Treasury plans to retain $2 billion of this surplus in its cash account at the Federal Reserve and to use the balance to retire $5 billion in government securities held by depository institutions and $3 billion held by the general public, use T accounts to show the effects of this debt retirement operation.

Due to Drastic Cuts in Federal Spending and Strong Economic