Interest-Rate Ceilings on Deposits

question 109

Multiple Choice

Interest-rate ceilings on deposits:

• A)meant banks were guaranteed "cheap money" from depositors.
• B)were imposed because without them,as was the case in the 1970s,banks couldn't be profitable.
• C)led to banks losing deposits whenever market rates went above the ceiling rates.
• D)are only effective when market rates are below the ceiling rates.
• E)were developed by money market mutual funds as a marketing device.

---

Definitions:

Budget Constraint

The limit on the consumption bundles that a consumer can afford given their income and the prices of goods and services.

Gardenburger

A brand of vegetarian burgers made from a variety of vegetables and grains.

Monthly Income

The total amount of earnings or revenue generated by an individual or entity in a month, typically from employment, business activities, or investments.

Budget Constraint

The limitations on the consumption bundles that a consumer can afford with a limited amount of income.