The banking industry in the U.S. has faced increased competition

Question

Quizplus · Accepted Answer

Money market mutual funds and the commercial paper market both compete with banks on both the asset and liability sides of their balance sheets. Money market mutual funds offer an alternative to deposit accounts for savers, which reduces the available funds for banks to loan out as assets. Meanwhile, the commercial paper market offers an alternative to bank loans for businesses looking for short-term financing, reducing banks' ability to generate interest income on their loans. Therefore, choices C and D are both correct.

The Banking Industry in the U