Activity in money markets increased significantly in the late 1970s and early 1980s because of

Question

Quizplus · Accepted Answer

The combination of rising short-term interest rates and regulations that limited what banks could pay for deposits led to increased activity in money markets during the late 1970s and early 1980s. As banks were limited in what they could pay for deposits, investors turned towards the money markets to seek higher yields. Additionally, the rising short-term interest rates provided an incentive for investors to participate in money market activities.

Activity in Money Markets Increased Significantly in the Late 1970s