Federal debt reduction will cause which of the following?

Name: Federal debt reduction will cause which of the following?
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Question

Quizplus · Accepted Answer

When the federal debt is reduced, there is less government borrowing, which decreases the supply of bonds in the market. This decrease in supply leads to an increase in bond prices and a decrease in interest rates. A decrease in interest rates encourages private investment due to lower borrowing costs. Thus, all the options - A, B, and C - are correct.

Federal Debt Reduction Will Cause Which of the Following