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

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


Answer: D) rightward; fall


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Marketing Chapter 5

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