When Inflation Rose in the Late 1970s

question 12

Multiple Choice

When inflation rose in the late 1970s,

• A) consumers moved money out of money market mutual funds because their returns did not keep pace with inflation.
• B) banks solidified their advantage over money markets by offering higher deposit rates.
• C) brokerage houses introduced highly popular money market mutual funds, which drew significant amounts of money out of bank deposits.
• D) consumers were unable to take advantage of higher rates in money markets because of the requirement of large transaction sizes.

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