If municipal bonds were to lose their tax-free status,then the demand for Treasury bonds would shift ________,and the interest rate on Treasury bonds would ________.
A) rightward; fall
B) rightward; rise
C) leftward; fall
D) leftward; rise

Question

Quizplus · Accepted Answer

If municipal bonds were to lose their tax-free status, then investors would demand more Treasury bonds, which would shift the demand curve for Treasury bonds to the right. This would cause the interest rate on Treasury bonds to rise.

If Municipal Bonds Were to Lose Their Tax-Free Status,then the Demand