Financial deregulation and innovation in the United States has greatly ________ the variety of financial market instruments savers can choose from and has also ________ the dominance of banks among the financial intermediaries.

Question

Quizplus · Accepted Answer

Financial deregulation and innovation tend to increase the variety of financial instruments available to savers while reducing the dominance of banks among the financial intermediaries. This is because deregulation encourages the entry of new players in the financial market, who are likely to introduce new financial products with different features and advantages compared to traditional bank products. As a result, savers have more choices, and banks have to compete with other financial institutions to attract customers. Therefore, the correct answer is D, increased variety of financial instruments, and reduced dominance of banks.

Financial Deregulation and Innovation in the United States Has Greatly