Consider a case where the federal government passes new tax legislation that reduces the tax advantage of municipal bond
Posted: Sun May 29, 2022 7:49 pm
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
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