Which of the Following Statements Are True

question 75

Multiple Choice

Which of the following statements are true?

• A) An increase in tax rates will increase the demand for Treasury bonds, lowering their interest rates.
• B) Because the tax-exempt status of municipal bonds was of little benefit to bond holders when tax rates were low, they had higher interest rates than U.S. government bonds before World War II.
• C) Interest rates on municipal bonds will be higher than comparable bonds without the tax exemption.
• D) Because coupon payments on municipal bonds are exempt from federal income tax, the expected after-tax return on them will be higher for individuals in lower income tax brackets.

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Definitions:

Systematic Desensitization

A behavioral therapy technique used to reduce fear, anxiety, or aversions through gradual exposure to the feared object or situation combined with relaxation exercises.

Progressive Relaxation

A technique for achieving a deep state of calm by tensing and then relaxing all the major muscle groups in sequence.

Exposure

The process of reducing fear or anxiety by gradually and repeatedly introducing the feared object or situation.

Aversion Therapy

A behavioral treatment method that uses negative stimuli to reduce the appeal of undesirable habits or behaviors.