Rising market interest rates in the 1960s and the 1970s,combined with regulated deposit rate ceilings,

Question

Quizplus · Accepted Answer

Option A is correct because rising interest rates made it difficult for mortgage-issuing institutions to obtain low-cost funds. However, deposit rate ceilings provided a source of cheap funds for these institutions, allowing them to compete with other lenders.

Option B is correct because the deposit rate ceiling led to depositors moving their funds out of depository institutions as they sought higher returns on their savings.

Option C is correct because financial institutions came up with innovative ways to avoid regulated deposit rate ceilings, such as creating new financial instruments that were not subject to the regulations.

Therefore, option D is the correct answer as all of the above options are relevant to the situation.

Rising Market Interest Rates in the 1960s and the 1970s,combined