The Obama administration increased the tax on the top income tax bracket from 35% to 39%. Supply and demand analysis predicts the impact of this change was a lower interest rate on municipal bonds and a higher interest rate on Treasury bonds, all else the same. Sketch a graphical explanation.

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The Obama administration increased the tax on the top income tax bracket from 35% to
39%. Supply and demand analysis predicts the impact of this change was a lower
interest rate on municipal bonds and a higher interest rate on Treasury bonds, all else the
same. Sketch a graphical explanation.
Transcribed Image Text:The Obama administration increased the tax on the top income tax bracket from 35% to 39%. Supply and demand analysis predicts the impact of this change was a lower interest rate on municipal bonds and a higher interest rate on Treasury bonds, all else the same. Sketch a graphical explanation.
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