If Income Tax Rates Were Lowered,then

question 93

Multiple Choice

If income tax rates were lowered,then

• A) the interest rate on municipal bonds would fall.
• B) the interest rate on Treasury bonds would rise.
• C) the interest rate on municipal bonds would rise.
• D) the price of Treasury bonds would fall.

---

Definitions:

Monopolistic Competition

A market structure where many firms offer products or services that are similar but not perfect substitutes, leading to competition based on factors other than price.

Excess Capacity

A situation where a business has more production facilities, resources, or capability than currently needed to meet demand.

Nonprice Competition

Competitive strategies used by companies to attract customers through methods other than lowering prices, such as product quality, service, and marketing.

Variety

Refers to the range of different products, services, or choices available in a particular area or sector.