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

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



A) leftward; rises
B) leftward; falls
C) rightward; rises
D) rightward; falls


Answer: A) leftward; rises


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Marketing Chapter 5

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