Debt retirement operation on economy and financial markets


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?

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Finance Basics: Debt retirement operation on economy and financial markets
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