Regulation Q (the restriction on interest paid on deposits) was responsible for the rise in nominal interest rates in the 1970s.

Question

Quizplus · Accepted Answer

Regulation Q capped the interest rates that banks could offer on deposits, but the rise in nominal interest rates in the 1970s was primarily due to high inflation and the Federal Reserve's monetary policy efforts to combat that inflation, not directly because of Regulation Q.

Regulation Q (The Restriction on Interest Paid on Deposits) Was