Consider a case where the federal government passes new tax legislation that reduces the tax advantage of municipal bond

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answerhappygod
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Consider a case where the federal government passes new tax legislation that reduces the tax advantage of municipal bond

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Consider a case where the federal government passes new tax
legislation that reduces the tax advantage of municipal bonds
relative to US Treasury bonds. As a result, the equilibrium price
of US Treasury bonds should _____, and the equilibrium price of
municipal bonds should _____.
decrease; decrease
decrease; increase
increase; decrease
increase; increase
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