The Interest Earned on a State or Local Government Bond

question 21

True/False

The interest earned on a state or local government bond is exempt from federal taxation.

---

Definitions:

Economics

The social science that studies how individuals, businesses, governments, and nations make choices on allocating resources to satisfy their wants and needs, trying to maximize their wealth or utility.

Invisible Hand Principle

A concept introduced by Adam Smith, suggesting that individuals' self-interested actions may lead to positive societal outcomes, effectively guided by an "invisible hand."

Competitive Markets

Markets with numerous buyers and sellers, enabling free competition and efficient price setting.

Resources

are materials, money, staff, and other assets that can be drawn on by a person or organization to function effectively.