Which of the Following Statements Is True

question 72

Multiple Choice

Which of the following statements is true?

• A) Because coupon payments on tax-exempt bonds are exempt from federal income tax, the expected after-tax return on them will be higher for individuals in higher income tax brackets.
• B) An increase in tax rates will decrease the demand for tax-exempt bonds, lowering their interest rates.
• C) Interest rates on tax-exempt bonds will be higher than comparable bonds without the tax exemption.
• D) Because coupon payments on tax-exempt are exempt from federal income tax, the expected after-tax return on them will be lower for individuals in higher income tax brackets.

---

Definitions:

Marginal Benefits

The additional enjoyment or advantage obtained from using one more unit of a good or service.

Pollution Emissions

The release of pollutants, harmful chemicals, or substances into the environment, typically as a byproduct of industrial activity or transportation.

Total Pollution Emissions

Total Pollution Emissions refer to the sum of all harmful pollutants released into the environment by human activities, including industrial processes, vehicles, and agriculture.

Marginal Benefits

The additional satisfaction or utility gained from consuming or producing one more unit of a good or service.