In order to compete with changing market conditions in the 1980s,banks supported legislation to remove interest rate ceilings and to allow banks to pay interest on checking accounts. These actions
A)lowered transactions costs for banks.
B)raised the cost of acquiring funds for banks.
C)made banks less competitive in the financial markets.
D)raised the income banks received.

Question

Quizplus · Accepted Answer

By removing interest rate ceilings and allowing banks to pay interest on checking accounts, banks faced higher costs for acquiring funds since they now had to pay interest on accounts where they previously did not. This increased their operational costs.

In Order to Compete with Changing Market Conditions in the 1980s,banks