The interest income earned on most municipal bonds in the United States is tax exempt. Thus, for such municipalities
A) the level of public investment projects is lower than it would be otherwise.
B) municipal tax revenues are higher than they would be otherwise.
C) the user cost of cost capital is lower than it would be otherwise.
D) All of the above are correct.
C
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In response to the financial crisis in 2008, the Fed created which of the following policy tools?
A) quantitative easing B) the required reserve ratio C) the discount rate D) the federal funds rate E) open market operations
Which of the following is NOT an example of an opportunity cost?
A) By spending Thursday night studying for an economics exam, a student was unable to complete a homework assignment for calculus class. B) Because David used all of his vacation time to paint his house, he was unable to visit the Caribbean last year. C) Because Mary is now being paid a higher wage, she can afford to buy a new car even though she is moving into a bigger apartment. D) By choosing to attend college, Jean was not able to continue working as an electrician; as a result, she gave up more than $85,000 in earnings while she was in college.