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please see picture. Do not copy online. Assume that the government remove the tax-free status of municipal bonds. Further assume that municipal bonds and treasury

please see picture. Do not copy online.

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Assume that the government remove the tax-free status of municipal bonds. Further assume that municipal bonds and treasury bills become perfect substitutes (a) Explain what would happen to municipal bonds interest rate? (b) Given your answer in part (a) what do you think will happen to interest rate on Treasury bonds

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