Prior to 1980,the Fed set an interest rate ________ that is a maximum limit on the interest rate that could be paid on time deposits.
A)floor
B)ceiling
C)wall
D)window

Question

Quizplus · Accepted Answer

Prior to 1980, the Fed implemented a policy called Regulation Q which established a ceiling on the interest rate that banks could offer on time deposits (such as savings accounts and certificates of deposit). This was meant to prevent banks from engaging in excessive competition for deposits and to maintain stability in the banking system. Therefore, the correct choice is B) ceiling.

Prior to 1980,the Fed Set an Interest Rate ________ That