Question: Explain what we expect would happen to current equilibrium yield on 10-year Treasury bonds if there was a sudden, unexpected increase in tax revenues, resulting
Explain what we expect would happen to current equilibrium yield on 10-year Treasury bonds if there was a sudden, unexpected increase in tax revenues, resulting in a lower government deficit, and thus a lower need for current governmental borrowing, all else being held constant. Make sure to be clear if either bond demand, bond supply, or both will shift in your graphical analysis. Clearly indicate any shifts of demand and/or supply, and what happens to prices and yields. Please either use the provided graph or reproduce the graph carefully.

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