A Proposed Increase in the Federal Income Tax Rates May

Multiple Choice

A proposed increase in the federal income tax rates may actually be viewed favorably by many mayors of cities because:

A) It will allow them to also raise their tax rates
B) It will cause the demand for municipal bonds to increase and their yields to increase
C) People will pay less attention to local taxes
D) It will cause the price of municipal bonds to increase and their yields to decrease