Security Amount (in Billions) Treasury Bills $ 220 Corporate Bonds 140 Treasury Notes 80 Corporate Stock 200 US Savings Bonds 60 Treasury Bonds 100 Other things equal, an increase of Treasury bonds from $100 billion to $120 billion in the economy would Multiple Choice not change the size of the public debt. increase the public debt from $460 billion to $480 billion. increase the public debt from $400 billion to $420 billion. decrease the public debt by $20 billion.

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Parrain Parrain · Answer 1 · 2022-03-29T12:13:50+02:00

Based on the increase in Treasury bonds, the change in public debt will be an increase in public debt from $460 billion to $480 billion.

The current public debt is:

= Treasury bills + Treasury notes + Treasury bonds + Savings bonds

= 220 + 80 + 100 + 60

= $460 billion

An increase of $20 billion in Treasury bond will increase the public debt to:

= 460 + 20

= $480 billion

In conclusion, option B is correct.

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