The introduction of money market substitutes for basic checking accounts was fueled partially by:
A)The relatively high rates of inflation that existed in the late 1970s and early 1980s
B)The reluctance of many retailers to accept checks
C)The high number of bank failures that were occurring in the 1970s
D)The higher interest rates banks had to pay on checking accounts

Question

Quizplus · Accepted Answer

The introduction of money market substitutes for basic checking accounts was fueled partially by the relatively high rates of inflation that existed in the late 1970s and early 1980s. As inflation rates increased, the nominal interest rates on traditional checking accounts did not keep pace, which led to the creation of money market accounts that offered higher interest rates.

The Introduction of Money Market Substitutes for Basic Checking Accounts