Explain why most retired individuals are not likely to be heavily invested in municipal bonds.
What will be an ideal response?
Most retired individuals are not working and as a result, they may find themselves in a relatively low marginal tax bracket. As a result, the tax-exempt status of municipal bond interest is less beneficial and hence, less attractive to them.
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An increase in aggregate expenditure has what result on equilibrium GDP?
A) Equilibrium GDP falls. B) Equilibrium GDP rises. C) Equilibrium GDP is not affected by an increase in aggregate expenditure. D) Equilibrium GDP may rise or fall depending on the size of the increase in aggregate expenditure relative to the initial level of GDP.
Barriers to entry into a monopolistically competitive industry are virtually impossible to overcome
Indicate whether the statement is true or false