If the federal government where to raise the income tax rates, would this have any impact on a state's cost of borrowing funds? Explain
What will be an ideal response?
Yes, if the federal government raises income tax rates, demand for municipal bonds which are federal income tax exempt would increase. This would lower the interest rate on the municipal bonds thus lowering the cost to the state of borrowing funds.
Economics
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The free-rider problem exists for goods that are ________
A) excludable B) rival C) free D) non-excludable
Economics
When the money market is drawn with the value of money on the vertical axis, long-run equilibrium is obtained when the quantity demanded and quantity supplied of money are equal due to adjustments in
a. the value of money. b. real interest rates. c. nominal interest rates. d. the money supply.
Economics