Before the 1960s, over half of the sources of bank funds were obtained through checkable deposits that, by law, could not pay any interest. Banks did borrow from each other to meet their reserve needs, but this was not their primary source of funding. Therefore, option B is not a correct answer. Hence, the correct answer is A.

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Before the 1960s

Question 70

Multiple Choice

Before the 1960s,

A) over half of the sources of bank funds were obtained through checkable deposits that by law could not pay any interest.
B) banks mostly borrowed from other banks to meet their reserve needs.
C) both A and B occurred.
D) neither A nor B occurred.

Correct Answer: