Rising inflationary pressure caused the U.S.to tighten its monetary policy at the end of the 1960s.As a result,market interest rates rose above the Regulation Q ceiling and American banks found it impossible to attract time deposits for re-lending.How did the banks get around this problem?
A) by setting their own interest rates and then using better business as compensation for government regulations
B) by borrowing funds from European branches,which faced no restriction on the interest they could pay on Eurodollar deposits
C) by pushing through new legislation that nullified Regulation Q
D) by creating subsidiary branches in foreign countries
E) by waiting to trade time deposits until Regulation Q no longer applied
Correct Answer:
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