When the government has a surplus,as occurred in the late 1990s,the ________ curve of bonds shifts to the ________,everything else held constant.
A)supply;right
B)supply;left
C)demand;right
D)demand;left

Question

Quizplus · Accepted Answer

When the government has a surplus, it means they are collecting more revenue than they are spending. Thus, they have more money to pay off debt and may choose to buy back bonds. This leads to a decrease in the supply of bonds (since there are fewer outstanding), which shifts the supply curve to the left.

When the Government Has a Surplus,as Occurred in the Late