The effect of federal government budget surplus
Not what you're looking for?
Suppose that, due to drastic cuts in federal spending and strong economic growth, it now appears that the federal government will experience a $100 billion budget surplus in its cash account at the Federal Reserve. It will use the balance to retire $100 billion in government securities. What would be some of the possible effects of this debt retirement operation on the economy and the financial markets?
Purchase this Solution
Solution Summary
This scenario has some similarities to when a corporation uses cash to buy back a portion of its stock.
Solution Preview
This scenario has some similarities to when a corporation uses cash to buy back a portion of its stock. In this case, the price of the current bonds will immediately increase due to the sudden greater demand to buy the bonds. This also will send a message ...
Purchase this Solution
Free BrainMass Quizzes
Understanding Management
This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Situational Leadership
This quiz will help you better understand Situational Leadership and its theories.