The yield on a tax-exempt bond:
A. is called the risk-free yield.
B. is equal to the yield on a U.S. 30-year bond.
C. equals the taxable bond yield times one minus the tax rate.
D. only applies to foreign bonds because they are exempt from U.S. income taxes.
Answer: C
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Because of diminishing marginal productivity
A) the labor supply curve is not vertical. B) nominal wages are sticky in a downward direction. C) the labor demand curve is negatively sloped. D) households save only a small share of their income.
Assume that the actual deficit is $150 billion with the economy well below potential output and that the level of economic activity rose to its potential level while tax revenues increased by $50 billion and transfer payments fell by $20 billion
Then, what is the structural deficit? a. $180 billion b. $120 billion c. $220 billion d. $80 billion e. $100 billion
In a business cycle, a peak marks the end of an expansion and the beginning of a recession
a. True b. False Indicate whether the statement is true or false
In a command economy, decisions about how to allocate resources are made: a. based upon tradition
b. by a central planning board. c. by individuals and firms interacting in markets coordinated by a price system. d. by a lottery system.