Everything else held constant,abolishing all taxes will
A) increase the interest rate on corporate bonds.
B) reduce the interest rate on municipal bonds.
C) increase the interest rate on municipal bonds.
D) increase the interest rate on Treasury bonds.

Question

Quizplus · Accepted Answer

Abolishing all taxes would remove the tax-exempt status of municipal bonds, making them less attractive compared to other bonds, thus increasing their interest rates to attract investors.

Everything Else Held Constant,abolishing All Taxes Will