Prior to Depository Institution Deregulation and Control Act (DIDMCA)being passed,banks used ______________.This tended to distort the allocation of scarce resources.
A)free pricing
B)conditionally free pricing
C)flat-rate pricing
D)marginal cost pricing
E)nonprice competition

Question

Quizplus · Accepted Answer

Before the Depository Institution Deregulation and Monetary Control Act was passed, banks often engaged in nonprice competition due to regulations that limited their ability to compete on interest rates. This led to an inefficient allocation of resources, as banks would instead compete through other means such as offering gifts or better services to attract customers, rather than through more efficient pricing strategies.

Prior to Depository Institution Deregulation and Control Act (DIDMCA)being Passed,banks