When a Municipal Bond Is Given Tax-Free Status,the Demand for Municipal

question 16

Multiple Choice

When a municipal bond is given tax-free status,the demand for municipal bonds shifts ________,causing the interest rate on the bond to ________.

• A) leftward; rise
• B) leftward; fall
• C) rightward; rise
• D) rightward; fall

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Definitions:

Recovery

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Type A Personality

A personality type characterized by high levels of competitiveness, self-imposed stress, impatience, and aggressiveness.

Aggressive, Hostile

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