How Would You Expect the Mayors of Most U

Multiple Choice

How would you expect the mayors of most U.S. cities to respond to a proposed significant reduction in U.S. income taxes?

A) Favorably, since this will significantly increase the demand for municipal bonds
B) Unfavorably, the demand for municipal bonds will fall and their yields will increase
C) Favorably, the price of municipal bonds should increase and their yields fall
D) No reaction, this should have no impact on municipal bonds at all