The deregulation of thrift institutions in the 1970s and 1980s have made their deposits and thus their ability to finance mortgages ________ sensitive to movements in the market interest rate,thus ________ the monetary policy multiplier.
A)more,raising
B)more,lowering
C)less,raising
D)less,lowering

Question

Quizplus · Accepted Answer

Deregulation made thrift institutions more sensitive to interest rate changes, which means they now have less ability to finance mortgages. This results in a lowering of the monetary policy multiplier.

The Deregulation of Thrift Institutions in the 1970s and 1980s