Everything else held constant,abolishing the individual income tax 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 the individual income tax would make municipal bonds less attractive since their tax-exempt status would no longer provide a benefit, leading to an increase in their interest rates to attract investors.

Everything Else Held Constant,abolishing the Individual Income Tax Will