When inflation rose in the late 1970s, consumers moved money out of money market
ID: 1119243 • Letter: W
Question
When inflation rose in the late 1970s,
consumers moved money out of money market mutual funds because their returns did not keep pace with inflation.
consumers were unable to take advantage of higher rates in money markets because of the requirement of large transaction sizes.
banks solidified their advantage over money markets by offering higher deposit rates.
brokerage houses introduced highly popular money market mutual funds, which drew significant amounts of money out of bank deposits.
A.consumers moved money out of money market mutual funds because their returns did not keep pace with inflation.
B.consumers were unable to take advantage of higher rates in money markets because of the requirement of large transaction sizes.
C.banks solidified their advantage over money markets by offering higher deposit rates.
D.brokerage houses introduced highly popular money market mutual funds, which drew significant amounts of money out of bank deposits.
Explanation / Answer
When inflation rose in the late 1970s, OPTION D
brokerage houses introduced highly popular money market mutual funds, which drew significant amounts of money out of bank deposits.
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