Which of the following accurately describes the tax treatment of municipal bonds?
A) All income from municipal bonds is tax free.
B) Interest is tax free, but unrealized capital gains are taxable.
C) Interest is tax free, but realized capital gains are taxable.
D) Interest is taxable, but capital gains are tax free.
C
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The biggest disadvantage of a fixed exchange rate is the
A) increased probability of high inflation. B) tradeoff between supporting the exchange rate and adjusting the trade balance. C) tradeoff between supporting the exchange rate and maintaining economic growth. D) increased probability of a trade deficit. E) tradeoff between supporting the exchange rate and maintaining a balanced budget.
Expenses that a firm does not have to pay out of pocket are
A) wages of employees. B) taxes. C) implicit costs. D) explicit costs.